Charlotte Russe Holding (NASDAQ:CHIC) apparently disappointed some investors quite badly, judging by the stock's movements in response to its third-quarter earnings news. However, could it be that this huge price cut makes teen retailer and fast-fashionista Charlotte Russe a rare retail bargain?

Net income at Charlotte Russe nearly doubled in the third quarter to $10.1 million. Technically, earnings dropped to $0.40 per share for the third quarter, compared with $0.42 per share this time last year. But that's not the whole story, because the company divested its Rampage unit, so earnings from continuing operations were actually $0.40 per share compared with $0.24 per share last year -- and that's pretty impressive. Charlotte Russe's sales increased by 12.2% to $180.3 million, but comps increased a mere 1.3%.

It's never a surprise when investors run for the exits when a company reports earnings and discloses that its next quarter is going to be challenging. That's what Charlotte Russe is doing. The company expects that comps will be flat in the fourth quarter and that earnings from continuing operations will be $0.34 to $0.37 per share. Analysts had expected earnings of $0.49 per share for the fourth quarter -- quite a noteworthy discrepancy.

When stocks get smacked around the way Charlotte Russe's did yesterday, that doesn't necessarily translate into great bargains, even at reduced prices. Panera's (NASDAQ:PNRA) quarterly results on Wednesday proved that. Likewise, Gap (NYSE:GPS) is another clothing retailer that has had trouble getting its turnaround on track, and despite its ongoing problems over the last couple years, I've never been convinced that it had fallen to tempting bargain territory.

Yet I'm also fascinated that Charlotte Russe is now trading at just 10 times trailing earnings. As I already mentioned, Gap's been having issues for quite some time, and its price-to-earnings ratio is 20. Hot Topic (NASDAQ:HOTT) also has several years of lackluster results under its belt, and it's trading at a whopping 31 times earnings. Meanwhile, Charlotte Russe actually has cash on the balance sheet -- which increased by 34% to $87.5 million on a year-over-year basis -- and no debt. It's still growing, and it's opening 50 new stores this year; it currently has 408.

Part of the thesis here, of course, is that Charlotte Russe is simply suffering from a temporary setback and will quickly get things back on track. Look back to January; investors reacted violently to its quarterly results then, too. Although analysts expect Charlotte Russe to deliver double-digit earnings growth over the next couple of years, if the company's merchandise isn't resonating with teens -- or if consumer spending simply dries up, a common fear right now -- it certainly might spell longer-term trouble for this company. However, given the likelihood that this is just a temporary setback for a company whose stock has dropped 27% year to date, Charlotte Russe may just be a tantalizing idea for investors to consider.  

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Alyce Lomax does not own shares of any of the companies mentioned. The Fool's disclosure policy has six pairs of oversized sunglasses.