More and more I come across young people who haven't heard certain sayings or slang from earlier eras. That's one reason I love to have friends of all different ages—we all have distinct culture/pop culture knowledge from our particular generation that we can share with one another!
This is one such old saying. It apparently originated in the south (U.S.), and it is a way of saying, "You're nice," "Thank you," or "You're sweet." Or, it follows a thank you. For example:
Me: Would you please hand me that pen?
You: Sure, here you go.
Me: Thanks! You're a peach.
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