All hail the spendthrift American shopper! Despite all manner of weather- and gasoline-related doom and gloom, well-placed clothiers continue to rake in big bucks from shoppers who seemingly don't have enough denim, knits, and other clothing paraphernalia. Sitting in a sweet spot of pricing and fashion, American Eagle Outfitters (NASDAQ:AEOS) has been one of the fat cats feasting on the mall rats.

Second-quarter results reflect just how sumptuous that feast has been. Sales were up nearly 30%, fueled by a 21% increase in same-store sales (which came on top of a 14% increase last year). Not only has American Eagle been moving more merchandise, it has also been doing so at full price -- gross margins were up by more than 300 basis points, and operating margins climbed nearly 400.

American Eagle was flush with both success and cash at quarter's end -- more than $625 million in cash sits on the balance sheet, and another $126 million has been invested in bonds. With inventory seemingly under control and minimal debt, the company looks to be in good shape.

That said, it's not without a few challenges. While same-store sales have been very strong, the comparisons are going to get increasingly difficult. What's more, some are beginning to question whether the fashion trends that have propelled the likes of American Eagle, Abercrombie & Fitch (NYSE:ANF), Urban Outfitters (NASDAQ:URBN), and Guess? (NYSE:GES) are due for a change.

Eventually that will happen. Retailers don't always guess right about the shifting sands of teenager tastes (see also: Hot Topic (NASDAQ:HOTT)), and sooner or later, American Eagle will stumble -- but that hasn't happened yet. What's more, the company is preparing to launch a second concept targeted at a slightly older demographic that should help it grow even more.

All in all, these shares really don't look that expensive -- either on a relative or absolute basis -- even though they've had a great run. Fools should certainly keep an eye on same-store sales, gross margins, and inventory turns, but for now at least, this eagle looks like it's still flying high.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).