Women's clothing retailer bebe stores (NASDAQ:BEBE) reported remarkable results for its fiscal third quarter and predicted continued success into its fourth quarter. It earned $5.5 million compared with $142,000 (no, that's not a typo) just one year ago.

The company credited the year-over-year increase of 2,000% to improved gross margins (up to 46.3% from 42.1% last year) and strong (more like Herculean) spring sales. It should also credit the overall strength of the retail sector. Despite the reported lack of consumer confidence, shoppers appear to be spending freely.

Same-store sales jumped 16.7% from a year ago for the trendy retailer. Total third-quarter sales were up 21.6% to $83.6 million. It appears to have recovered from its struggles of recent years and is looking to keep the party going. For the fiscal year ending in June, estimates indicate an increase in earnings of 52.7%.

It also received good news in the courts this month. A California judge lifted a temporary restraining order against its new CEO, Greg Scott. The company's rival and Scott's former employer, Wet Seal (NASDAQ:WTSLA), sought the restraining order. After Scott abandoned Wet Seal's Arden B division for bebe, several other employees reportedly followed him. Interestingly, Scott was actually returning to bebe, where he had served as vice president of merchandise from 1996 to 2000 before going to Wet Seal.

One negative for the company appears to be its somewhat hefty price tag. Its stock has increased by about 130% over the past year and is trading at 29 times forward earnings, which may help explain its nearly 5% drop despite its record-setting results.

Though it may be a bit pricey, bebe should prove to be a solid long-term performer, thanks to its improving margins and solid management team.

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Fool contributor Mike Cianciolo welcomes feedback and doesn't own any of the companies mentioned in this article.