Sharper Image's (NASDAQ:SHRP) fourth-quarter and 2004 earnings had a luster today. It's hardly surprising. With the holiday season's emphasis on luxury goods, and a smattering of affordable new products, it appears the upscale retailer's gotten some traction with shoppers.

The company's earnings came in 11% higher at $22.8 million, or $1.40 per share, compared to $16.9 million, or $1.26 per share in the same quarter last year. This figure met the high end of analysts' estimates, which was adjusted when Sharper Image guided higher in February. Same-store sales increased 17% while total sales were up 29%.

For the year, Sharper Image's earnings increased 36% to $1.65 per share, while total revenues increased 26%.

Not so long ago, good times were building. In December, Sharper Image showed it was cashing in on the luxury trends as well as its addition of some lower-priced, more practical products, which probably attracted a whole new demographic.

That tactic has worked like a charm. Sharper Image used to seem like the kind of joint that epitomized the excesses of the Internet bubble. Then the pendulum swung -- during the recession, everybody clutched their wallets more closely. (Case in point: Sharper Image's same-store sales suffered a precipitous drop around that time, with same-store sales up 29% in 2000, then down 16% in 2001.)

However, it looks like Sharper Image is evolving into the kind of place where both frivolous spendthrifts and Average Joes and Josephines can get some kind of gadget to make life a little more fun, a little more convenient, or a little more relaxing. Admittedly, retailers like Sharper Image and rivals like Brookstone (NASDAQ:BKST) rely a lot on consumer confidence, but for now, trends seem to be going that way.

Meanwhile, Sharper Image plans growth. It sees increasing its store presence by 15% to 20% this year, adding 22 to 30 new locations where one can buy a whole array of fun stuff, including the ultrasound jewelry cleaner, the always-fun Roomba floor vacuum, or the Turbo-Groomer 5.0 (that's a nose- and ear-hair trimmer, in case you were wondering).

Investors bid Sharper Image shares down today. Given the good showing, the tepid reception seems surprising. Maybe investors were expecting a lot more when the company raised its guidance in February, when the stock hit a new 52-week high. As long as Sharper Image can continue to expand its demographic and its store base, and provide a line of hit products, things look pretty sharp for it.

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Alyce Lomax does not own shares of any companies mentioned. Her image could be a lot sharper.