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.
The ANN share price popped through 30-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 four “strong buys”, five “buys”, eight “holds” and one “sell”. Analysts expect an 18% growth rate, through the next year. The ANN P/E ratio (16.29), PEG ratio (1.07), Price to Sales ratio (0.85), Price to Book ratio (2.19), Price to Cash Flow ratio (8.17) and Price to Free Cash Flow ratio (20.39) 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 $27.05 and $45.15.
