Ann Taylor Stores: Help for the fashion conscious professional woman

Despite the flood of women's fashion stores across the country, there are relatively few that cater to the busy professional in need of a coordinated wardrobe. One of them is headquartered on Times Square.

Ann Taylor Stores (NYSE: ANN) is a national specialty women's apparel retailer. The firm operates 878 stores across the United States, targeting fashion conscious customers with clothes designed exclusively for its own outlets. Most signature Ann Taylor stores are located in malls and upscale retail centers. The chain's Ann Taylor Loft stores offer their own label of mid-priced apparel and Ann Taylor Factory stores offer clearance merchandise. The company also operates a pair of Web sites. Competitors include Jones Apparel Group (NYSE: JNY), Limited Brands (NYSE: LTD) and Liz Claiborne (NYSE: LIZ).

The firm pleased investors last week, when it reported Q1 EPS of 46 cents, a result in-line with the average Street estimate. Revenues of $580.3 million had been previously announced. Management also guided FY08 EPS to $2.15-$2.25, versus consensus of $2.17. The CEO noted that the company had become more efficient, having made significant progress in the areas of sourcing and systems. The ANN share price popped through 30-day, 50-day and 200-day moving average resistance on the news and has since begun to define a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Brokers recommend the issue with two "strong buys," four "buys," ten "holds" and two "sells." Analysts expect a 15% average annual growth rate, through the next five years. The ANN P/E ratio (20.40), PEG ratio (1.36), Price to Sales ratio (1.08) and Price to Book ratio (2.75) compare favorably with industry, sector and S&P 500 averages.

Institutional investors hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $32.25 and $45.15. A stop-loss of $33.75 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.