On Nov. 16, Claire's Stores (NYSE:CLE) released third-quarter earnings for the period ended Oct. 28.

  • Margins declined across the board, as customer demand shifted toward lower-priced accessories and jewelry products, all of which carry lower margins.
  • Working capital growth (inventory and accounts payable) were on track with sales growth, allowing the company to maintain its healthy balance sheet.
  • 50 of 53 investors in our CAPS community think Claire's will outperform the S&P 500. Got an opinion? Bring it to CAPS!

(Figures in thousands, except per-share data)

Income Statement Highlights

Q3 2006

Q3 2005

Change

Sales

$347,593

$327,259

6.2%

Net Profit

$36,627

$38,127

(3.9%)

EPS

$0.39

$0.38

2.6%

Diluted Shares

94,605

99,534

(5%)



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

52.39%

53.69%

(1.30)

Operating Margin

14.10%

15.48%

(1.38)

Net Margin

10.54%

11.65%

(1.11)

*Expressed in percentage points

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$244,551

$359,757

(32%)

Accounts Rec.

$0

$0

N/A

Inventory

$158,853

$147,354

7.8%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$77,880

$74,849

4%

Long-Term Debt

$0

$0

N/A



Learn the ways of the balance sheet.

Cash Flow Highlights

The cash flow statement is an accessory every investor can use. You should know that, Claire's.

Find out why Fools always follow the money.

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Want to weigh in on Claire's or any other teen outfitters? Check out CAPS, The Motley Fool's new stock-picking service, and let your voice be heard.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication,Nathan Parmelee had no positions in any of the companies mentioned. Fool rules are here.