Don't you hate stocks that let their ticker symbols dispense their grades? For those keeping score at home, Abercrombie & Fitch (NYSE:ANF) really is worthy of both an A and an F.

It's easy to be blown away by last week's July sales report. Comps up a spectacular 22%? That's a passing grade. Yet that shiny apple becomes a dunce cap when one realizes that the results are stacked atop a 9% decline in July 2004, which followed an 11% slide in 2003. In other words, on a same-store sales basis, the Abercrombie & Fitch stores of 2002 outsold the same units three years later in July.

That's why shares of the specialty retailer fell on the news; analysts had been expecting a 28% spike in July comps. Wall Street wasn't greedy. It just wanted a better organic seller than it saw three years ago. It didn't get it.

The same reason Gap (NYSE:GPS) investors were rightly suspicious about the company's initial turnaround after three years of sluggish comps applies here.

A&F's comps didn't turn positive until September of last year. That's worth noting. Come next month, the sandbagging is over, and the company will have to earn its same-store sales gains. Yes, earnings have held up relatively well over the years despite the lumpy comps, but this is the fickle world of hip young adult fashion. Same-store sales are a critical gauge here, because popularity is everything -- even if the recent popularity is as deceptive as bathroom gossip.

Consider Aeropostale (NYSE:ARO). Last week the stock got crushed after it posted that July comps fell by 4.2%. However, a year earlier, same-store sales had risen by 13.8% after climbing by 19.3% in 2003.

Let's see here. Last month, Aeropostale saw its comps fall by 4.2%, just as A&F was coming through with a 22% uptick. Advantage A&F? Not if you go back a few years. Since July of 2002, A&F same-unit sales are off by 1%, while they're up 30% at Aeropostale.

A&F has been a real wild child, and that's not always a bad thing. From risqué magalogs to incestuous T-shirts, the chain has made some of Urban Outfitters' (NASDAQ:URBN) ridiculous gambles seem politically correct by comparison. Then again, upsetting West Virginians and favoring bouncy Aryans isn't necessarily a deal breaker for A&F. Urban Outfitters has gotten away with being naughty because the registers just keep ringing up sales. There has to be some form of irreverence in your marketing arsenal if you want to reach jaded teens, and I'm not going to mark A&F down just for that. However, A&F has a history of taking its efforts to craft a rebellious image too far. Do we really need interviews with porn stars in quarterly mailers aimed at kids? Shouldn't a clothing store's marketing material deal more with what folks are wearing than how much they aren't wearing?

Those questions may not matter much to you when approaching A&F as an investment. You're more in touch with the fundamentals. You want valuation metrics over the ethical ones. OK, let's touch on that. Shares of A&F have roughly tripled over the past three years. You already know that, going by the month of July, comps have dipped by 1%. Earnings over the past three years have grown by a cumulative 28%. Where's the disconnect? A&F has overshot its fundamentals.

Pull up a 10-year chart and you'll see that A&F, like way too many specialty retailers, has a way of zigging and zagging in and out favor. You can buy A&F for $60 today or wait and buy it for $40 later. It's your call.

You're not done. This is just one part of a four-part Duel! Don't miss Seth Jayson's bullish stance on A&F, Rick's rebuttal, or Seth's final word. When you're done, you're still not done. You can vote and let us know who you think won this Duel.

Longtime Fool contributor Rick Munarriz loves West Virginia. He does not own any of the shares mentioned in this argument. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.