What a difference a quarter makes for Volcom (NASDAQ:VLCM). The surf and skateboard attire provider just reported its third-quarter earnings, and investors sure are stoked, judging by the stock's jump today.

If you follow Volcom, you already know that the company warned of difficult times last quarter, and the stock wiped out (though it's since rebounded rather nicely). We can see that the third quarter was a challenging one in the earnings report. Although Volcom's sales increased 19.3% to $61 million, and operating income increased just a smidge, earnings per share decreased 10.6%, and margins dipped. (For more detail, see our related Fool by Numbers.) On a pro forma basis, though, earnings increased by 5%, due to a change in the company's tax status.

On the bright side, Volcom's cash store is up 29% to $84.6 million on a year-over-year basis, and inventories have only increased 10%. Compared to this time last year, free cash flow hasn't improved terribly much over the nine-month period, having dipped 4% to $12.4 million.

Investors already knew the third quarter was going to be a tough one -- Volcom's issues with its large customer Pacific Sunwear (NASDAQ:PSUN), which has had some recent wipeouts of its own, have been well-known, although some of us contended that Volcom's brand was just as strong as ever and extreme pessimism about the company was likely unfounded.

So let's get to the good stuff: Volcom increased 2006 guidance, now expecting earnings of $1.16 to $1.17 per share, and sales up 27% to $203 million to $204 million. According to user platoish's great post about the conference call on the Motley Fool Hidden Gems discussion board dedicated to Volcom, the company was able to improve its sales through Pacific Sunwear. It also distributes its wares through PacSun rival Zumiez (NASDAQ:ZUMZ) and has added some more distributors in the U.S., like Federated's (NYSE:FD) Macy's. It's also hard at work tackling Europe for added growth.

When Volcom got slammed in July, some investors kept their cool and took the opportunity to buy. In the September issue of Motley Fool Hidden Gems, Tom Gardner recommended Volcom to subscribers a second time -- and the stock's up 64% since that re-recommendation.

Personally, I find Volcom rather fascinating because it's not just trying to capitalize on a trend. One could argue that mega-corporations like Nike (NYSE:NKE) often try to do just that, but Volcom's part of the trend. "Youth Against Establishment" is Volcom's motto, and it sponsors board sports competitions and concerts, produces movies, and has a record label geared towards its youthful clientele. Through its expertise and involvement in the lifestyle, it seeks a genuine appeal that probably shouldn't be underestimated for its ability to generate loyalty for the brand.

Although Volcom's third quarter wasn't an easy one, it appears its management was able to make the best of a difficult situation and share even brighter prospects to come. Maverick though it may be, it seems that this interesting company is getting even more interesting.

Ollie off the following related Foolish coverage:

Volcom is a Motley Fool Hidden Gems recommendation, as is Zumiez. Pacific Sunwear has been recommended by Motley Fool Stock Advisor .

Alyce Lomax does not own shares of any of the companies mentioned. In CAPS, she is currently ranked 2,615 out of 11,634, and as of this writing, Volcom is her "all-time best" CAPS call. The Fool's disclosure policy is a rebel with a cause.