NEW YORK ( TheStreet) -- Why is everyone being so hard on J.Crew ( JCG)?

The retailer did everything right when it reported its fourth-quarter earnings after-market on Tuesday: J. Crew swung into profit, boosted by robust sales, and issued a full-year outlook that is poised to significantly top Wall Street's forecast.
J.Crew

Still, J.Crew's stock remained flat after the release, and is currently falling 4.4% to $44.87 in pre-market trading.

J.Crew is up 25% since February, and, granted, most of the optimism has already been priced into the stock. But the pullback could be an opportunistic buying opportunity, analyst Jennifer Black, of the firm bearing her name, wrote in a note.

But some believe J.Crew's stock is too high. Citigroup downgraded the company on Wednesday to hold from buy on valuation. **Analyst Kimberly Greenberger wrote in a note that she believes the company's first-quarter guidance is too conservative.**

During the quarter, J. Crew earned $40.4 million, or 61 cents a share, compared with a loss of $13.5 million, or 22 cents, in the year-ago period.

Revenue spiked 19% to $460.6 million, as same-store sales soared 17%, proving when you have the right merchandise, shoppers will want to buy.

Last year, J.Crew struggled with clearance merchandise. A decline in markdowns led to a 43.9% gross margin, compared with 27.6% in the fourth-quarter last year.

Looking ahead, J. Crew management expects first-quarter earnings in the range of 48 cents to 53 cents a share, and full-year between $2.20 and $2.30 a share. Wall Street is calling for earnings of 48 cents in the first quarter and $2.13 in 2010.

And there are still plenty of growth opportunities ahead. J.Crew will open 15 new stores this year, with even more expansion seen for 2011.

Its recent launch of its men's store could also add significant upside to the business over the long term, Black said.

In May J.Crew will begin featuring some of its merchandise on Net-a-porter.com, an international Internet retailer. This will provide the company with an entryway into international markets without the risk and capital commitments of building stores or its own online distribution network, analyst Richard Jaffe of Stifel Nicolaus wrote in a note.

J.Crew's success comes as other retailers in the contemporary space are dropping out of the game. American Eagle Outfitters ( AEO) announced on Tuesday that it will shutter its 28 Martin + Osa stores by the end of the year.

Similarly, Abercrombie & Fitch ( ANF) eliminated its Ruehl chain late last year, and Aeropostale ( ARO) failed with its Jimmy'Z unit. Gap's ( GPS) Banana Republic has also been struggling.

With almost no competition in the market, except for Urban Outfitter's ( URBN) Anthropologie, it looks like J.Crew should have even more advantages as the economy continues to rebound.

-- Reported by Jeanine Poggi in New York.

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