As the parent of any teen fashionista will tell you, keeping them in the latest styles can tempt bankruptcy. It’s hard on retailers too because they have to anticipate what’s going to be hot from one season to the next. One miscalculation and they’re in for a rough quarter, so some retailers wisely have shifted away from the fickle teen market to focus on the more-stable tastes of 20- and 30-somethings.

Express (NYSE: EXPR) is reaping the rewards of such a strategy. The company’s shares have gained better than 4% since we added it to the portfolio in early March.

As recently as last year, the retailer was routinely slashing prices to move merchandise after its customers learned to wait for sales before shopping. But when David Kornberg was made CEO in January 2015, after holding various roles at the company since 1999, he said, “enough.” Although Express still has sales, they’re much less frequent, and the markdowns aren’t nearly as dramatic.

When you walk into an Express store today, you’ll still see some teens, but you’ll find the typical customer is now a young professional. And even though you’ll find some flashy out-on-the-town clothes and plenty of casualwear, the stores’ fashions also tend to skew more toward dressier, office-appropriate clothing for woman and men.

Express also has been bringing brand ambassadors onboard—young celebrities and athletes—to help promote its brands. You’ll find pictures of ambassadors wearing Express gear peppered across social media and in company ads, all designed to make the brand appear to be the height of fashion. Ambassadors emeritus include Steph Curry of the Golden State Warriors and Kate Upton, a model and actress perhaps best known for gracing the pages of the Sports Illustrated swimsuit editions.

The current ambassador is Kris Bryant, third baseman for the Chicago Cubs. Ranked as the number one prospect by Baseball America before the 2015 season, Bryant won the Dick Howser Trophy and the Golden Spikes Award as the best amateur baseball player in 2013. He’s also easy on the eyes, with the kind of rugged good looks that could lead him to a successful modeling career if his Major League aspirations don’t pan out. That means he can effectively promote Express to both men and women, or as the old Hollywood adage about male movie stars goes: “Men want to be him; women want to be with him.”

It’s Working

The turnaround strategy is gaining traction. When Express reported earnings back in March, Kornberg said that shoppers were “responding favorably to our spring product.”

After steadily falling for the better part of four years, inventory turnover at Express also has been ticking up as clothes have been selling faster. Same-store sales rose 6% last year, while operating margins widened by 2.5%. That drove a 79% increase in the company’s earnings per share for 2015.

While we don’t think this year’s growth will be quite so dramatic, we do expect last year’s momentum to carry through into 2016. Based on company guidance, earnings are expected to rise from 22 cents in the first quarter of 2015 to between 25 cents and 28 cents in the first quarter of this year. Earnings for full-year 2016 are expected to fall between $1.56 and $1.71, as compared to $1.45 last year.

Room to Grow

That’s impressive growth for a company that had seen earnings fall for three years running. It could also be a conservative estimate: Management has bumped the guidance twice in the last six months, and Wall Street analysts have followed suit. Over the past three months the average estimate for full-year earnings from analysts has risen from $1.65 to $1.69, so they expect a year-over-year earnings bump of better than 22%.

That’s a good indication that there’s still plenty of growth left for Express, and we think the market will reward the company’s investors. Right now, the shares trade at just 13.5 times trailing earnings and just 11 times the company’s projected earnings. The industry on average trades at 25.9 times trailing earnings, so we expect Express’s multiple to widen as its turnaround continues.

We also like that Express has effectively retired its debt, redeeming its last outstanding senior notes that were due in 2018 in the fourth quarter of last year. The company also repurchased about 3.8 million shares of its common stock in the quarter, yet still has $187 million in cash on its balance sheet. That gives the company a great deal of flexibility because, odds are, its designers will have an occasional miss—a fact of life in fashion retailing.

A solid balance sheet virtually ensures that the company stays in fashion with investors, so buy Express under our $40 target price.