Surf's up, Fools!

Taking a ride in the barrel of a crowded youth-oriented retailer market can get pretty hairy. As Urban Outfitters (NASDAQ:URBN), Buckle (NYSE:BKE), and Pacific Sunwear (NASDAQ:PSUN) try to drop in on one another, making a wave may not be as easy as it looks. But that hasn't stopped Quiksilver (NYSE:ZQK) from ripping cool moves and hanging 10 for investors.

After hitting rock-bottom in 2000, Quiksilver's stock has caught some serious air, ramping up seven times from its $5 lows. Don't expect another wipeout of its shares anytime soon, since the latest results suggest that the company has enough mojo to pull off yet another gnarly year.

For the first quarter, Quiksilver's sales increased to $342.9 million, up 34% compared with the same period a year ago. The company experienced rapid growth across the board, as revenues from the Americas were higher by 29%, Europe by 25%, and the Asia-Pacific region by an astounding 92%.

Net income for the period pulled off another radical maneuver, increasing 55% year over year. First-quarter earnings per share came in at $0.23, vs. the $0.16 figure from a year ago -- a 44% improvement. Quiksilver's EPS increase trailed its net income growth, though, with a 6% share dilution weighing in.

Not everything was smooth sailing; operating margins hit some choppy waves. Profit margins for the quarter were 6.8%, a slide of 9.2%. That's bad news if the trend continues, since shrinking margins will put pressure on the company's cash flow statement, and weaker cash flow will cause further strain on a balance sheet that's far from squeaky clean -- $82.6 million in cash and equivalents are offset by long-term debt of $179.9 million.

Considering that Quiksilver is far from a deep value play, potential investors will want to monitor the company's margin situation going forward, since any further tightening could result in a wicked 180-degree movement in its stock. The company did raise its earnings guidance for the year to a new estimate of $1.62-$1.63 per share, but even with the revision, the stock is still trading at a steep 21 times current-year earnings.

If you've been chilling with Quiksilver, you're no doubt stoked about the nice returns you've seen over the past few years. But if you're sitting on the sidelines, bummed as you continue to wait for a deal, consider dipping in your toe. Just tread forward with caution, given the company's valuation, before you decide to dive in completely.

If you dig youth-oriented retailers, check out these articles on Quiksilver's competitors:

Fool contributor Jeremy MacNealy does not own shares in any of the companies mentioned.