Call it a relief rally.

With Wall Street waiting with bated breath to see whether hometown hero New York & Company (NYSE:NWY) could hit its recently raised earnings guidance, news that the firm had in fact earned a penny more than it had predicted helped shoot the shares up 6% last week. Today, however, New York & Co. is starting to give back some of those gains as investors ponder the implications of its total sales continuing to come in lower than analysts had hoped to see, and its same-store sales possibly declining again.

The perpetual problem
As a Foolish writer, I face the usual delightful dilemma when covering New York & Co.'s results, in that my Foolish colleague on the dedicated Motley Fool Hidden Gems site, Jim Gillies, has already combed through the company's third-quarter report in detail, highlighted what's important, and laid it all out in black and white (and our signature green) for our subscribers. That leaves frustratingly little value for this Fool to add for readers of our site -- but never fear, I'll do my best. Meanwhile, subscribers to Hidden Gems should not stop with this article, but head right over to check out the Hidden Gems Daily report on New York & Co.

That "private service announcement" concluded, on with the show. About the only thing that Jim didn't cover in detail in his write-up was what New York & Co. had to say about the quarter that we're in the middle of right now. Specifically, the firm expects to see Q4 sales this year come in between 11% and 15% stronger than last year, and for same-store sales in particular to show improvement, coming in somewhere in the neighborhood of negative 1% to positive 2% -- or in other words, essentially flat.

Ordinarily, flat sales would be nothing to brag about, but in New York & Co.'s case, it would actually be an improvement. So far this year, same-store sales are down 4.4%. Just putting the kibosh on that downward trend would do wonders for total firmwide sales, as the firm continues to increase its store count (adding or remodeling a net 10 stores in the fourth quarter, after subtracting out closings) and rack up additional sales from its new stores.

Finally, thanks to the firm's continued focus on reducing "promotional activity," which has been helped by what Jim so eloquently described as a newfound devotion to selling "stuff people actually want," New York & Co. expects to net $0.37 to $0.46 per share this quarter, which would translate into anything from essentially flat profits to a 28% improvement. Here's hoping.

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Fool contributor Rich Smith does not own shares of any company named above. The Fool's disclosure policy never sleeps.