We have trackedOakley (NYSE:OO) throughout the year as it thumped out strong sales. Strong growth helped to move its stock up 50% to highs of more than $19. However, after the release of third-quarter results this week, its shares began plummeting in after-hours trading. With gains from the year quickly evaporating, let's take a closer look to see whether this purveyor of high-tech sunglasses and other trendy apparel has indeed lost its cool.

Revenues for Q3 climbed 15.6% to a record $173.4 million. Domestic sales increased 20.1%, while international operations contributed 11% growth. That's impressive, but brighter still are Oakley's U.S. O Store operations, for which revenues jumped 46.3%. With 44 stores currently in operation, Oakley will undoubtedly find its U.S. O outlets to be a productive area of future growth.

The quarter also heralded the release of Oakley's much-anticipated, Bluetooth-enabled RAZRWIRE line of shades, developed jointly with Motorola (NYSE:MOT). But it was new styles like Bottlecap and Gascan that were the primary sales drivers.

Oakley did feel its gross margins tighten by 3.6 percentage points to their current level of 53.5%. Higher closeout sales were to blame, but the downturn was countered by improvement on an operational level. Despite lower gross margins, operating margins still managed to increase to 13% from 11.7% in the comparable period a year ago. As a result, net income climbed to $15 million, for a 31.6% increase.

With all of this double-digit growth, why are investors running for the exits? Oakley's declining backlog is a concern. It attributed the 15.4% backlog decrease in part to a new product launch last year and also to a shift in the timing of holiday orders. But it also added that higher eyewear orders would be offset by lower apparel orders.

It appears that the company expects a slower sales environment in 2006 beginning sooner rather than later. Despite the holiday launch of Thump 2 -- a digital-music-enabled eyewear product geared to take advantage of the MP3 madness sustained by Apple's (NASDAQ:AAPL) iPod -- Oakley is seeing trends that suggest it will come in at the low end of its estimated 10% to 15% revenue growth in the fourth quarter.

If a slower sales environment didn't cause investors to lose their appetite for Oakley's shares, then the fact that it didn't buy any of its own stock in the third quarter -- despite an authorized $14.4 million buyback purchase that was in place at the time -- was enough to get investors selling. If the stock isn't attractive enough for Oakley itself, should investors be buying? Right now, the sentiment is "no."

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Fool contributor Jeremy MacNealy does not own shares of any companies mentioned.