We do a fair bit of sewing in our house, so every time we make a run for supplies, I wonder about the fate of our usual fabric purveyor, the local Jo-Ann Store (NYSE:JAS). To judge by the parked-car disparity with the neighboring competitor-to-all Wal-Mart (NYSE:WMT), which has about 100 autos for each one of Jo-Ann's, things might look pretty grim.

But the firm's recent numbers show a company that continues to strive toward greater profitability. For fiscal 2004, net sales rose 3% to $1.7 billion, while comps were up 3.6%. Earnings dropped 11% to $1.86 per share. However, that figure doesn't tell the whole tale. In a year of restructuring and reorganization, Jo-Ann took some heavy charges for store closings and renovation, prepayment of debt, merging its class A and B stock, and -- golf clap, please -- expensing stock options.

It looks like the year's difficult work is starting to pay off with small increases in sales and profitability. In the recent fourth quarter, earnings rose 6% over the same period last year, to $1.22 per stub. Revenues climbed 5.1% to $552.6 million, while comps were up 4.5%. The improvement is encouraging, though Jo-Ann is clearly not seeing the retail renaissance that's juicing the results at big boxes such as Wal-Mart and Target (NYSE:TGT), as well as high-end department stores.

Plus, Jo-Ann isn't the only game in town. Smaller peer Hancock Fabrics (NYSE:HKF) competes for customers in the needle-and-thread world, and crafty performerMichaels Stores (NYSE:MIK), which posted a recent 25% jump in earnings, gobbles up a good share of our glue 'n glitter budget. And, of course, Sam Walton's big blue monsters are nipping at everyone's heels.

Current guidance from Jo-Ann Stores looks for earnings around $2.20 per share for next year. That's ahead of analyst estimates, and would put Jo-Ann at a forward P/E near 13 at today's prices. That looks high to me, given the firm's sub-10% growth outlook.

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Fool contributor Seth Jayson can't stitch a straight line, but that doesn't stop him from trying. He doesn't have a stake in any company mentioned above. View his Fool profile here.