NEW YORK (CNN/Money) - Sharper Image has been the darling of analysts and investors so far this year. But now there are signs that enthusiasm is waning for the specialty retailer of unique gadgets and gizmos.

Though some industry watchers credit the San Francisco-based company for bucking the overall retail downtrend, others say the real test has only just begun.

"September sales comparisons loom large. For several months I've cautioned people about it. Also, there's no emergence of must-have products from the company this year," said Gary Holdsworth, analyst with Wedbush Morgan Securities.

Sharper Image (SHRP: Research, Estimates) last month reported fiscal second-quarter sales at its stores open at least a year -- a key retail measure also known as same-store sales -- rose 15 percent. Total store sales for the period increased 27 percent over last year and the company boosted its guidance for the full year.

Revenue for the company's fiscal year 2003 rose 31 percent over the previous year.

Its stock is enjoying a bull run as well, up 51 percent so far this year. With a price/earnings ratio of 22 times this year's earnings, it's trading at a slight premium to specialty retail's P/E of 19.1.

Here's the issue: According to Perkins, sales comparisons to 2002 have become difficult for the retailer, although the numbers begin to ease toward the end of the year.

"Same-store sales in September 2002 jumped 37 percent," said Ken Perkins, research analyst with Thomson Financial. "Sales in October last year were up 23 percent, 15 percent in November. [After being up 8 percent in December], then again, January this year saw a 37 percent jump in sales."

Some investors appear to be spooked by the tough numbers. Short-interest activity in Sharper Image's stock is on the rise, at 12.2 percent of the total number of shares traded. That's the fourth-highest level in a year.

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"As the company begins to anniversary difficult sales comparisons and investors look to the holiday season, Sharper Image is on a lot of retail investors' radar screen," said Brian Tunick, analyst with J.P. Morgan.

Short sellers typically borrow stock and sell it, hoping to buy it back and profit if the stock declines.

Said Tunick, "Business will slow down. No one expects the company to maintain a strong momentum throughout the year. However, investors should look at the sales numbers on a two-year basis. In September 2001, sales dropped over 40 percent. So the company can still put up positive numbers in the third and fourth quarters."

Tunick has an "overweight" rating on the stock.

Sharper Image's Ionic Breeze Silent Air Purifier is listed on the company's Web site as a best-selling product this year, along with a few other gizmos such as the iJoy Robotic Massage Chair and the nose-hair Turbo-Groomer.

The company won't disclose sales figures for individual products but Jeff Forgan, the company's chief financial officer, said Ionic Breeze is a top seller.

"Our home and portable stereo systems, CD alarm clocks and desk-top fans have also sold well," said Forgan.

The Ionic Breeze GP Silent Air Purifier. (Source: Sharper Image)

Rob Wilson, analyst with Tiburon Research, estimates that the Ionic Breeze Air Purifier accounts for between 35 and 40 percent of the company's total sales. He says this makes Sharper Image's sales too dependent on just one product and vulnerable to a sales shortfall if copycat products flood the market.

Wilson has a "sell" rating on Sharper Image.

According to Wilson, privately held HoMedics Inc., maker of dental appliances, footbaths and relaxation products, is in partnership with Belmont, Mass.-based Kronos Advanced Technology (KNOS: Research, Estimates) to manufacture and distribute a range of air filtration products similar to the Ionic Breeze Air Purifier as early as next year.

HoMedics and Kronos did not return calls for comment.

"Sharper Image does have a high-quality product, but consumers might opt for the lesser-priced versions that are more widely available, like at a Wal-Mart or other mass merchandisers," said Wilson. Sharper Image's products are sold only through its 130 retail stores, its catalog and its Web site.

The iJoy Robotic Massage Chair, one of the top sellers for Sharper Image. (Source: Sharper Image)

Additionally, Consumer Reports magazine for the second time in two years delivered a negative test report on the Ionic Breeze product, criticizing the lack of speed and air volume. Analysts warn the bad publicity could turn consumers away from the product.

The company responded by suing Consumer Reports' parent, Consumers Union, this month, claiming the magazine published false and misleading statements about its Ionic Breeze Quadra air purifier.

Forgan, however, said the company isn't rattled by the competition.

"Honeywell, Panasonic, Hoover have had these [air filtration] products for years already," said Forgan. "We are very cognizant of the fact that similar products are sold by other marketers. We've shown we have momentum across our product lines. Our products have a broad appeal to different income groups."

Forgan declined to comment on the short-selling activity in Sharper Image's stock.  

-- Analysts quoted in the story do not personally own shares of Sharper Image. In some instances their firms do have an investment banking relationship with the company.