To steal a turn of the tongue from The Simpsons' Mr. Burns:

"I know what I hate. And I don't hate this."

That sums up my feelings as a shareholder when I take a look at the latest earnings release from New York & Co. (NYSE:NWY). Yeah, I know, that's not saying much. And after enduring failure after failure from this Hidden Gems pick, you're probably right in thinking, "Dude, as long as no meteors drop onto the HQ, and the CEO doesn't get caught selling kittens for medical experiments, anything will look like a good quarter."

So here's how good or not good it was. Sales rose 4% despite a same-store sales drop of 4%. Earnings tanked by nearly half, to $0.11 a share. Cash provided by operations was pinched by an even greater percentage (nearly 2/3) and given the free love attitude toward capital expenditures, the year-to-date free cash flow rings up at a negative $26 million, a lot more red ink than the negative $10 million for the prior-year period.

So that's the bad. Unless you've been living on some desert island or Cleveland or something, with your fingers stuffed in your ears, you probably expected to see something like this. But there's also some cause for hope among the numbers. Inventory seems to have been well managed, as it grew by a slim 1.5%. And take a look at the net sales per average selling square foot. Up from $79 to $81. The balance sheet looks firmer, and finally, the trajectory of same store sales, while still negative, looks like it might just be nosing up.

And given New York & Co.'s price -- enterprise value is about 0.6 times revenues -- this underperformer still looks like a potential buy to me. A gut-wrencher, to be sure, but a definite turnaround prospect. And the more I invest in retail, the more I find myself doing better buying on the way cheap than piling onto cheaper-but-still-expensive stuff like Chico's FAS (NYSE:CHS). Coldwater Creek (NASDAQ:CWTR) or J. Crew Group (NYSE:JCG)? Forget about it. Too rich for my moola.

My hesitancy here is that I've done better with turnarounds like Ann Taylor (NYSE:ANN) or Guess? (NYSE:GES), where I was able to actually see material improvement before the stock price shot through the moon. New York & Co.'s stock is so skittery that I don't know if that will be possible. This one jumps on a whisper of good news. And it crashes just as quickly when hopes are dashed.

You know what would be cool? If we had some inkling of where insiders stood on the probability of a turnaround, as measured by their willingness to buy shares of their own firm. You know what else would be cool? If I got a pony for my birthday!

Instead, a lot of us have had to wonder whether we're on this year's retail Titanic. Officers and directors have been busy unlashing their own lifeboats while shouting up to us, "Hey, you just go ahead and enjoy the music and the refreshing footbath."

That means you're on your own with this one, folks. A bit of improvement here will put New York & Co. back into the game and likely drive the stock price right back up the chart. But buy here, and you're still buying into all the risk and unknowns. For my part, I'm still content to hold my stubs, but I reserve the right to judge that a foolish (little f) action sometime down the road.

New York & Co. is a Motley Fool Hidden Gems recommendation. To get a look at our analysts' latest thoughts on the company, as well as a peek at all past and current picks, a free trial is just a click away.

Seth Jayson knows how to serve up some fine waffles, eh? At the time of publication, he had shares of New York & Co. and Guess?, but no positions in any other company mentioned. View his stock holdings and Fool profile here. Fool rules are here.