On April 18, teen fashion retailer Claire's (NYSE:CLE) released its fourth-quarter earnings for the period ended Feb. 3.

  • Net sales for the quarter were up 14%, with same-store sales increasing 1% along the way.
  • Lower gross margin and higher SG&A expenses as a percentage of sales put a cramp in the company's style.
  • Earlier this year, Claire's agreed to be bought out by private equity firm Apollo Managment. Could competitors like Tween Brands (NYSE:TWB) and dELiA*s (NASDAQ:DLIA) be next? Check out what the Motley Fool CAPS community has to say.

(Figures in millions, except per-share data)

Income Statement Highlights

Q4 2007

Q4 2006

Change

Sales

$472.3

$414.7

13.9%

Net Profit

$86.5

$69.1

25.2%

EPS

$0.93

$0.69

34.8%

Diluted Shares

93.2

99.7

(6.5%)

Get back to basics with the income statement.

Margin Checkup

Q4 2007

Q4 2006

Change*

Gross Margin

55.3%

55.7%

(0.4)

Operating Margin

23.8%

25.0%

(1.2)

Net Margin

18.3%

16.7%

1.7

*Expressed in percentage points

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q4 2007

Q4 2006

Change

Cash + ST Invest.

$340.9

$431.1

(20.9%)

Inventory

$121.1

$113.4

6.8%

Liabilities

Q4 2007

Q4 2006

Change

Accounts Payable

$56.3

$50.2

12.1%

The balance sheet reflects the company's health.

Cash Flow Highlights

YTD 2007

YTD 2006

Change

Cash From Ops.

$232.3

$242.4

(4.2%)

Capital Expenditures

$95.2

$73.4

29.6%

Free Cash Flow

$137.1

$169.0

(18.9%)

Free cash flow is a Fool's best friend.

For more on teen retailers, check out:

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At the time of publication, retail editor David Meier did not own stock in any of the companies mentioned. Fool rules are here.