Cramer: There is hope for Coach

It's not all doom and gloom for luxury goods maker Coach, CNBC's Jim Cramer said Tuesday.

"The new products work," Cramer said on "Squawk on the Street." "This is a sign of hope."

Shares of Coach got a lift Tuesday after the company reported fiscal fourth quarter earnings that beat expectations despite an eighth-consecutive quarterly sales decline. The stock was up about 2.7 percent in late morning trading.

The company also said it expects to see positive comparable store sales in North America by the end of the fiscal year. Coach reported that comps were down 19 percent, beating Cramer's estimate of down 20 percent.

Read More Coach profit and sales fall, but beats expectations

Cramer said Coach is just one of several companies in the luxury retail space that are facing tough times— including Ralph Lauren, Kate Spade, Michael Kors and Fossil.

"I think this group is so hard, so tricky. People who want to be in those stocks have to have the conviction that they really like the product," he said.

Coach also reported slightly tighter inventories and higher margins. "Even though it wasn't that much it still made me feel like Coach could be, I don't want to say it's back, because, boy. that group is so hard."

Shares of Coach are down 16 percent year to date.