AnnTaylor (NYSE: ANN), whose colleagues include Liz Claiborne (NYSE: LIZ) and Talbots (NYSE: TLB), reported Q2 earnings stats that beat the views of Wall Street. The retailer said it made $0.54 per share in the second quarter versus $0.51 per share earned in the similar period a year ago. These bottom-line results are on an adjusted basis. According to Reuters, analysts were looking for about $0.49 per share. So that's a nice $0.05 beat.

The bottom line may have surprised analysts, but other parts of the story didn't excite me. The top line decreased by almost 4%. Same-store sales took a big dive, declining pretty near 11%. Comps are an important metric for retailers, and a significant decrease like this one always makes investors cautious. Management cited low traffic levels as a driver of the dismal comps. Seems to me like someone at the chain needs to rethink the current marketing campaigns. The gross margin did improve, though, so at least there's that.

After reading through the earnings release, it became quite apparent to me that management is clearly worried about the economy going forward. They're right, I think the rest of the year may indeed be rough on the consumer. With such weak stats, I think it would be hard to make a case for buying AnnTaylor's stock. If you're a contrarian and think the company will consistently beat earnings from this point on, and you turn out to be right, then buying the stock now might make for a good trade. But I'd have to hear good reasons for such a bullish case. I think it's entirely possible that AnnTaylor's shares trend lower from here. No matter what, I won't be putting this retailer on my personal watch list. My advice to the company: get traffic through the door with more innovative promotional schemes.

Disclosure: I don't own any company mentioned; positions can change at any time.

A trip through any mall in the country shows that corporate America is not shy about satisfying the fashion tastes of younger women. There are, however, relatively few firms that cater to the busy professional woman in need of a coordinated wardrobe. One of them is headquartered on Times Square.

Ann Taylor Stores (NYSE: ANN) is a national specialty apparel retailer for the professional woman. The firm operates 887 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) and Liz Claiborne (NYSE: LIZ).

The firm pleased investors last week, when it reported solid Q2 results, reaffirmed guidance for FY08 earnings and authorized a new $300 million stock buyback program. Management also said that it will be launching a new store concept next month, aimed at what it calls the "modern boomer segment." The new approach will involve an attempt to tap into a demographic that has more disposable income, but fewer shopping options, than its younger counterparts.

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.

The landscape is filled with stores catering to ephemeral teen fashion tastes, but where does the busy professional woman go for help in building a reliable, coordinated wardrobe? There's a company based on Times Square that knows what to do.

AnnTaylor Stores Corp. (NYSE:ANN) is a national specialty apparel retailer for the professional woman. The firm operates 869 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.

The firm pleased investors last week, when it announced Q4 EPS of 31 cents and revenues of $610.5 million. Analysts had been expecting 29 cents and $605.6 million. Further, management guided FY08 EPS to $2.15-$2.25 ($2.11 consensus) and the Board of Directors authorized a $300 million share repurchase program.