Teen apparel retailer Aeropostale (NYSE:ARO) is off to a fantastic start in 2004. Last night, the company reported solid fiscal Q4 (ended Jan. 31) financial results, underscoring its ability to perform amid stiff competition in a hot sector.

Net revenues for the year increased more than 33% to $735 million. Much of that can be attributed to the opening of 95 new stores. Aeropostale now has 462 stores in 41 states, up from 25 states a year ago. Same-store sales also improved 6.6%. Gross and operating margins widened, leading to a nearly 60% pop in net income. (Net profit grew slightly more if a compensation charge taken a year ago is subtracted from 2002 profits.)

Inventory, meanwhile, grew just slightly slower than sales. The company didn't provide a cash flow statement in its earnings release, but Aeropostale's cash balance was significantly higher at the end of 2003 than it was a year ago, as well as at the end of Q3.

Aeropostale management seems intent on maintaining investor interest in its stock. Last night, they added two more reasons to take note: a 3-for-2 stock split, scheduled to take effect April 12, and an accelerated stock buyback program. The first shouldn't interest Fools much, while the second may prove a good use of cash. (In the end, it's largely an investor's decision, but reducing the share count to boost EPS isn't reason enough to buy shares, particularly if they've risen significantly.)

At any rate, Aeropostale is another example of a teen retailer delivering strong results in a lucrative sector. Recent results from Urban Outfitters (NASDAQ:URBN) and Pacific Sunwear (NASDAQ:PSUN) show the teen retail market is healthy and hopping.

Considering Aeropostale's operating performance in 2003, investors shouldn't need much reason to stand behind the company. Indeed, they've been well-rewarded for their faith in recent periods: the shares have raced ahead of the S&P 500 over the last 12 months.

Talk about this fast-growing retailer on our Aeropostale discussion board.

Dave Marino-Nachison doesn't own any of the companies in this story. He can be reached via email.