NEW YORK ( TheStreet) - Teen apparel retailers -- like their target demographic -- are fickle investments. One day they can be part of the popular clique, and just as easily be shunned as chronically un-cool the next day.

Stocks within the sector are swinging Friday morning, after several companies reported earnings this week.

For the most part teen retailer are seeing improving sales trends, but first-quarter forecasts remain a bit conservative. Read on to see how the teen retailers performed in the quarter -- and how they're performing today....


Aeropostale ( ARO) continues to be a standout in the sector, as fourth-quarter earnings soared 42%, the company announced on Thursday.

During the quarter, the company earned $96.6 million, or $1 a share, compared with $68.2 million, or 68 cents, in the year-ago period. Analysts expected the company to earn 95 cents a share.

Sales jumped 16% to $801.2 million from $690 million, as same-store sales increased 9%.

Looking ahead, Aeropostale expects first-quarter earnings in the range of 39 cents to 40 cents a share, higher than the 37 cents a share Wall Street is forecasting.

Unlike some of its competitors in the space, Aeropostale still has plenty of room to grow, in both its namesake stores and children's concept P.S. The company will add 30 new P.S. stores this year.

But investors have been hesitant to give credit to the company, as shares have been moving backwards based on the fear that tough comparisons will end Aeropostale's winning streak, Caris & Company analyst Dorothy Lakner wrote in a note.

While results may mitigate some of those fears, Lakner expects investors will remain on the sidelines until April same-store sales are released, as comparisons for the month are tough.

Still, shares of Aeropostale are climbing 5.0% to $28.42 in Friday morning trading.


Another lesser known company, Buckle ( BKE), is also emerging from the recession relatively unscathed.

On Thursday, Buckle, a premium denim retailer, said its fourth-quarter profit jumped 23% to $42.1 million, or 90 cents a share, compared with $34.3 million, or 74 cents, in the year-ago period. Analysts were expecting earnings of 84 cents a share for Buckle.

Sales rose 9% to $274.4 million, as shoppers appeared willing to pay for Buckle's premium quality denim and quality customer service.

"We believe these factors drove higher levels of full-price selling, leading to a significant increase in merchandise margins," Roth Capital Partners analyst Elizabeth Pierce wrote in a note.

While sales comparisons remain tough over the next few months, Pierce believes same-store sales will remain in the mid-single digit range during 2010.

As a result, Pierce upped her price target on the stock to $43 from $36.

American Eagle Outfitters

American Eagle Outfitters ( AEO) posted a positive fourth-quarter, although its earnings were overshadowed by its announcement that it is shuttering its flailing Martin + Osa chain.

The news has been a long time coming, as Martin + Osa has been a drag on American Eagle's business since its inception in 2006. In 2009, Martin + Osa recorded a loss of about $44 million.

All 28 Martin + Osa stores will close, as well as its online business -- moves that should be completed by American Eagle by the end of the year.

Removing Martin + Osa from the equation should be boost to the second half of the year for American Eagle.

While the Martin + Osa announcement was significant, the fourth quarter was nothing to be ignored on its own terms. American Eagle earned $59.3 million, or 29 cents a share, compared with $32.7 million, or 16 cents, in the year-ago period.

Excluding items, American Eagle actually earned 33 cents a share, in line with analysts' estimates.

American Eagle's sales jumped 7% to $972 million from $905.7 million, while its same-store sales rose 5%.

Looking ahead, the teen retailer predicts first-quarter earnings in the range of 15 cents to 17 cents a share. Wall Street is calling for 15 cents a share for American Eagle.

Shares of American Eagle are down 0.9% to $18.50 in Friday afternoon trading.

Hot Topic

Not everyone was, well, so hot. Hot Topic ( HOTT) saw it fourth-quarter profit nearly halved, as same-store sales continue to decline.

During the quarter, Hot Topic earned $8 million, or 18 cents a share, compared with $14.2 million, or 32 cents, in the prior year.

Hot Topic's sales tumbled 10% to $214.2 million and the company found itself with too much Twilight saga and colored denim merchandise, and was forced to resort to more heavy discounts.

The first quarter isn't expected to get much better, as the Goth-inspired retailer said it may post a wider-than-expected loss. Hot Topic foresees a loss between 2 cents and 5 cents a share, while analysts are looking for a loss of 2 cents a share.

Hot Topic will not sell the New Moon DVD, which will make comparisons even tougher.

The company is attempting to "level out the peaks and valleys of the business," by not relying too much on any one license, a la Twilight, Pierce wrote in a note. But this won't happen overnight. "That said, we believe this is exactly what needs to be done, and so while we have very little visibility at this point, we like the direction management is taking," she wrote.

On Friday, shares in Hot Topic are essentially flat, down 0.4% to $6.23.


Zumiez's ( ZUMZ) stock is wiping out after it, too, forecast a wider-than-expected loss in its first quarter.

The skate- and surf-inspired retailer predicts a loss of between 9 cents and 11 cents a share, significantly more than the 1 cent loss Wall Street expects.

As a result, shares are tanking 8.1% to $18.61 in Friday morning trading.

"Though lower first-quarter guidance may temper the recent run-up in the shares, the stronger outlook forecast for top-line growth this year makes us believe 2010 can still top our estimates," Lakner wrote in a note.

In the fourth quarter, Zumiez earned $8.8 million, or 30 cents a share, compared with $6.3 million, or 22 cents, last year. Analysts were looking for earnings of 27 cents a share for Zumiez.

Zumiez sales increased 5.5% to $132.4 million from $125.5 million, though same-store sales fell 1.7%.

Chen says that Zumiez is one of the few growth stories left in the specialty retail sector and deserves to trade at a premium.

The company is also up against easy same-store sales comparisons. With three months of positive comparable sales under its belt, analysts believe sales momentum will continue.

Pacific Sunwear of California

Pacific Sunwear of California ( PSUN) widened its fourth-quarter loss to $36 million, or 56 cents a share, from a loss of $27 million, or 42 cents, in the same quarter last year. This was significantly greater than the loss of 28 cents analysts predicted.

Pacific Sunwear's sales tumbled 17% to $293 million.

Like Hot Topic, PacSun is also expecting a bigger first-quarter loss than Wall Street. Pacific Sunwear management foresees a loss between 32 cents and 38 cents a share, while analysts forecast a much smaller loss of 14 cents a share.

Shares are plunging 15.8% to $4.84 in Friday morning trading.

"While we agree both store environment and merchandise assortment has begun to improve at PacSun, the junior's business continues to struggle," Needham analyst Christine Chen wrote in a note. "We would like to see more evidence that a margin recovery is underway, or stronger sales momentum, before we become more positive on the stock."

Chen says that liquidity is no longer a concern, since even with depressed sales PacSun has available credit and the ability to generate cash.

-- Reported by Jeanine Poggi in New York.

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