Aeropostale (ARO) shares rose more than 4% as investors applauded earnings growth and guidance.

The teen retailer said profit rose 44% to 99 cents a share, up from 67 cents a share a year prior and topping analyst estimates for 95 cents a share. The earnings growth came as the top line swelled 16% to $802.1 million, with a 9% increase in same-store sales.

The company continued its highly successful strategy of optimizing key classifications while driving traffic with fresh and new promotions, and management commented that studies show that they continue to gain recognition and preference in the minds of consumers, wrote Sterne Agee analyst Margaret Whitfield.

Looking ahead, Aeropostale projected first-quarter earnings of 39 cents to 40 cents a share, which was better than the 37 cents a share Wall Street analysts were expecting on average. It earned a slew of positive analyst movements, including an upgrade from Piper Jaffray and, and inspired Jefferies, Sterne Agee and others to lift their price target and estimates.

The bottom line: While we have been concerned about ARO's fundamental outlook given difficult [sales comparisons], management provided us with improved confidence that sales and margins are more sustainable near peak levels, wrote Jefferies analyst Randal Konik. Opportunities for select ticket increases, a strong promotional cadence, and ringing out more efficiencies across the corporation should help drive sales and keep margins more stable.

Pacific Sunwear of California Down

While Aeropostale was on the uptick, Pacific Sunwear of California (PSUN) shares were plummeting Friday on a widened loss and a weaker than expected outlook.

Factoring out one time charges, the teen retailer said it lost 26 cents a share, which was slightly better than the 29 cents a share analysts expected on the same basis. Sales dropped 17% to $293 million, but also topped expectations for roughly $277 million.

Investors were disturbed, however, that the company projected an adjusted loss of 32 cents to 38 cents a share for the present quarter, far underperforming analysts expectations for a loss of 15 cents a share.

After a recent run-up, shares were pressured by that guidance, signs of slowing trends in the current quarter, and what Wedbush analyst Betty Chen describes as significant weakness in Pacific Sun s juniors business. Chen added that new brand, allocation and marketing initiatives could take time to translate into accelerated sales.

The bottom line: While we are cautiously optimistic on new CEO Gary Schoenfeld s strategic outline to return the company to its core heritage and are beginning to notice modest changes in-stores, we believe modifications to the junior s business could disappoint investors and therefore anticipate downside risk to shares from current levels, writes Chen.