Apparently there is still money to be made in acting like MacGyver and crafting a four-piece place setting from paper clips, rubber bands, and drinking straws. Martha Stewart, eat your heart out.

Arts and crafts retailer A.C. Moore Arts & Crafts (NASDAQ:ACMR) said it felt confident it would beat analyst's first-quarter estimates of $0.03 a share, despite same-store sales falling 1.6% in the quarter from the same period in 2004 -- when same-store sales were up 9.4% from the first quarter of 2003.

The prediction is based on sales from its southern stores -- the company is based on the East Coast, with 96 stores stretching from New England to Alabama -- where revenues were not hurt by fickle weather patterns, as they were in the northeast. In the south, the company enjoyed strong sales growth that exceeded expectations. Still, the company had made $0.06 a share last year.

It's an industry that enjoys a lot of competition, but if women -- the primary target demographic -- can't get out to buy the company's fabric and floral decorations, comps will be hurt. Competitor Jo-Ann Stores (NYSE:JAS) also reported a decline in same store sales due to the harsh weather. Even so, industry leader Michael's (NYSE:MIK), at nine times the size of A.C. Moore, was able to report a rise in same-store sales of 2.7%, on top of a strong 6.7% increase a year ago.

For 2004, A.C. Moore benefited from sales growth of 15%, to nearly $500 million, though earnings dipped 1%; it experienced higher costs and pre-opening expenses as it opened more stores. The company has expanded from 17 stores almost 10 years ago, and it plans to open more at a rate of 15% to 20% per year over the next two years. Even with that growth the retailer is still able to average sales of $256 a square foot, which is tops in the industry, though down from an average $271 per square foot a few years ago.

Concentrated on the East Coast and with no immediate plans to engage in any type of Manifest Destiny expansion westward, the company clearly has an avenue it can pursue for future growth. Right now A.C. Moore is content to build out the eastern seaboard, and feels it can easily double the number of existing stores there without diluting sales.

Though the smallest bauble on the industry chain, the retailer has enjoyed better sales growth than that of its counterparts, and investors have bid up the shares as a result. The stock is up 40% over its 52-week lows, even as it sits 10% off its highs. It had been up this morning in pre-market trading about 8% on an analyst upgrade, but actually opened $0.10 lower. With a P/E ratio that is one-and-a-half times greater than Michael's, its earnings are 12 times less. And owner's earnings -- that is, free cash flow -- are steadily declining on a normalized basis. It sports an eye-popping enterprise value-to-owner's earnings ratio of 175, while Michael's is enjoying free cash flow that is steadily increasing and an annualized EV/OE ratio of just 12.

Certainly investors are excited about the growth prospects for the company, but A.C. Moore looks very expensive now, and share prices might be just as flimsy as a lace doily.

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Fool contributor Rich Duprey has a car that operates only because of the heroic efforts of his mechanic, who, coincidentally, is named MacGuyer. He does not own any of the stocks mentioned in the article.