When I stopped by the Washington, D.C., outlet of Urban Outfitters (NASDAQ:URBN) during peak holiday shopping season this past December, I wondered whether I was going to be crushed by the mob of young hipsters who continually filtered in and out of the store. The rest of the day, I kept seeing young people meandering along the streets of Georgetown with their Urban Outfitters shopping bags in tow. It's no wonder that Urban Outfitters lived up to expectations today, reporting torrid fourth-quarter results.

Fourth-quarter earnings at Urban Outfitters rocketed ahead 72% to $31.7 million, or $0.38 per diluted share. Net sales increased 43% to $251.6 million. Meanwhile, same-store sales leapt 13%. Urban Outfitters runs not only its namesake stores but also the Anthropologie and Free People shops; same-store sales increased 10% at Urban Outfitters and a very impressive 17% and 58% at Anthropologie and Free People, respectively.

Reminiscent of another hot retailer, Chico's (NYSE:CHS), Urban Outfitters is a stock that investors have paid a premium for, with a steep P/E ratio that generally dwells in the 40s. (In addition, Urban Outfitters' share price has marched ever higher over the past year.) However, given the stock's history of sizzling profits and sales, you can easily argue that the money's been well spent.

That's because there are several aspects that hint at quality. Urban Outfitters has a nice stockpile of cash, so it can fund its expansion without debt. (Expansion through debt is a mistake that Motley Fool Stock Advisor pick Gap (NYSE:GPS) paid for several years ago.) Urban Outfitters' cash and investments have increased 79%, while free cash flow doubled to $74.9 million compared with this time last year.

A few months ago, Urban Outfitters gave investors the chills by warning that growth may slow this year. That's not shocking when you consider that the company had a great 2004, and it means the company faces some tough comparisons now that 2005 is under way. However, Urban Outfitters has a great track record of appealing to kids and young adults, and so far, it seems to be doing quite well at expanding its appeal to more-mature markets with Anthropologie.

Of course, investing is about looking ahead. Given that Urban Outfitters seems to stay hot and still has a lot of room to grow, today's numbers still point to a pretty hip investment.

I've taken a look at Urban Outfitters a few times before. For a refresher, see:

Or, catch up with Fool community members who are actively discussing Urban Outfitters' earnings and outlook at the moment on our Urban Outfitters discussion board.

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Alyce Lomax does not own shares of any of the companies mentioned.