ANN NYSE-ANN

TIMELINESS SAFETY TECHNICAL

RECENT PRICE
High: Low: 19.9 6.7 17.5 9.4 22.1 12.8 27.2 11.4
LEGENDS 8.5 x Cash Flow p sh . . . . Relative Price Strength 3-for-2 split 5/02 3-for-2 split 5/04 Options: Yes Shaded areas indicate recessions

Median: 20.0 P/E RATIO RATIO YLD 26.71 P/E 14.8(Trailing: 18.5) RELATIVE 0.92 DIVD
31.4 20.0 34.8 20.4 45.2 32.0 39.9 25.1 29.2 3.7 17.5 2.4 28.2 11.6 32.5 21.0

Nil

VALUE LINE
Target Price Range 2014 2015 2016
80 60 50 40 30 25 20 15 10 7.5

2 3 5

Raised 6/3/11 Raised 8/18/00 Lowered 7/8/11

BETA 1.25 (1.00 = Market)

Annl Total Price Gain Return High 60 (+125%) 22% Low 40 (+50%) 10% Insider Decisions
to Buy Options to Sell S 0 1 2 O 0 0 1 N 0 0 0 D 0 0 0 J 0 0 0 F 0 0 0 M 0 4 6 A 1 2 2 M 0 2 3

2014-16 PROJECTIONS

3-for-2

Institutional Decisions
3Q2010 88 to Buy to Sell 94 Hlds(000) 61132 4Q2010 97 98 59009 1Q2011 42 158 31114

% TOT. RETURN 6/11

Percent shares traded 75 50 25
THIS STOCK VL ARITH.* INDEX

1 yr. 3 yr. 5 yr.

60.4 8.9 -39.8

35.8 51.3 50.6

AnnTaylor began in 1954 as a single store 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 operated by the Liebeskind family in New 19.66 20.51 23.33 26.24 28.60 33.77 39.36 38.33 31.11 35.78 42.40 46.10 Haven, Conn. Changed ownership three 1.42 1.90 2.24 2.12 2.55 3.59 3.84 2.16 2.08 3.12 3.80 4.30 times between 77 and 86. In February 89, .60 1.15 1.42 .99 1.26 1.98 1.83 .02 .31 1.30 1.80 2.20 Merrill Lynch and a management group ac----------Nil Nil quired the company from Campeau for $431 9.26 10.61 12.20 13.12 14.27 15.13 13.79 7.27 7.10 7.65 8.00 9.80 mill., financed mainly by co.-issued debt. 66.10 67.32 68.07 70.63 72.49 69.37 60.88 57.26 58.77 55.35 52.00 51.00 IPO came on 5/16/91; 14,485,400 shares 22.4 14.8 14.0 25.9 21.2 19.2 18.0 NMF 33.7 15.8 Bold figures are Value Line were sold at $11.61 each in deal led by Mer- 1.15 .81 .80 1.37 1.13 1.04 .96 NMF 2.24 1.01 estimates rill Lynch and Robertson, Stephens. ----------CAPITAL STRUCTURE as of 4/30/11 Total Debt None Leases, Uncapitalized Annual rentals $177.3 mill. Pension Assets-1/11 $29.8 mill. Oblig. $31.3 mill. Preferred Stock None Common Stock 52,053,197 shs. as of 5/16/11 MARKET CAP: $1.4 billion (Mid Cap) CURRENT POSITION 2009 2010 ($MILL.) Cash Assets 210.1 226.6 Receivables 19.3 17.5 Inventory (Avg Cost) 169.1 193.6 Other 106.4 112.2 Current Assets 504.9 549.9 Accts Payable 77.0 97.3 Debt Due --Other 198.4 184.6 Current Liab. 275.4 281.9 ANNUAL RATES Past of change (per sh) 10 Yrs. Sales 7.5% Cash Flow 4.5% Earnings -4.0% Dividends -Book Value -1.0%
Fiscal Year Begins

VALUE LINE PUB. LLC

14-16
55.75 5.75 3.00 Nil 15.65 48.00 16.5 1.10 Nil 2675 62.0% 14.0% 985 150 40.0% 5.6% 525 Nil 750 20.0% 20.0% 20.0% Nil

Sales per sh A Cash Flowper sh Earnings per sh ABE Divds Decld per sh Book Value per sh C Common Shs Outstg Avg Annl P/E Ratio Relative P/E Ratio Avg Annl Divd Yield

4/30/11 104.3 28.1 223.6 110.9 466.9 100.7 -175.5 276.2

1299.6 1381.0 1587.7 1853.6 2073.1 2342.9 2396.5 2194.6 53.5% 57.6% 57.8% 55.4% 55.5% 58.2% 57.1% 53.6% 10.1% 13.2% 14.1% 10.6% 11.6% 14.1% 12.7% 5.6% 538 584 648 738 824 869 929 935 39.4 80.2 100.9 71.0 91.3 143.0 116.7 1.2 45.0% 39.0% 40.0% 40.3% 40.8% 40.1% 39.6% 29.8% 3.0% 5.8% 6.4% 3.8% 4.4% 6.1% 4.9% .1% 189.3 304.1 415.8 343.5 418.6 391.2 195.0 118.0 118.3 121.7 125.2 -----612.1 714.4 830.6 926.7 1034.5 1049.9 839.5 416.5 5.7% 9.9% 10.8% 7.8% 8.8% 13.6% 13.9% .3% 6.4% 11.2% 12.2% 7.7% 8.8% 13.6% 13.9% .3% 6.4% 11.2% 12.2% 7.7% 8.8% 13.6% 13.9% .3% --------BUSINESS: ANN (formerly AnnTaylor Stores) is a retailer of womens apparel, shoes, etc. sold under the Ann Taylor and LOFT brands. Both brands offer a wide range of career and casual seperates, dresses, tops, weekend wear, shoes, and accessories, coordinated as part of a strategy to provide modern styles that are extremely versatile. The company operates 896 retail stores in 46

1828.5 1980.2 60.1% 60.6% 7.2% 11.2% 907 896 17.8 76.9 30.4% 38.4% 1.0% 3.9% 229.5 268.0 --417.2 423.4 4.3% 18.2% 4.3% 18.2% 4.3% 18.2% ---

2205 61.0% 12.0% 945 100 40.0% 4.5% 250 Nil 415 24.0% 24.0% 24.0% Nil

2350 61.5% 13.0% 960 115 40.0% 4.9% 315 Nil 500 23.0% 23.0% 23.0% Nil

Sales ($mill) A Gross Margin Operating Margin Number of Stores Net Profit ($mill) Income Tax Rate Net Profit Margin Working Capl ($mill) Long-Term Debt ($mill) Shr. Equity ($mill) Return on Total Capl Return on Shr. Equity Retained to Com Eq All Divds to Net Prof

states, Washington, D.C., and Puerto Rico, and employs about 19,400 (4/11 Form 10-K). T. Rowe Price Associates owns 10.4% of common stock; Adage Capital Partners, 8.5%; BlackRock, 8.2%; officers & directors, 6.7% (4/11 Proxy). President and CEO: Kay Krill. Incorporated: DE. Address: 7 Times Square, New York, NY 10036. Telephone: 212-541-3300. Internet: www.anntaylor.com.

Past Estd 08-10 5 Yrs. to 14-16 6.0% 7.5% 1.0% 15.0% -15.0% 33.0% -Nil -11.0% 14.0%

2008 2009 2010 2011 2012

Fiscal Year Begins

2008 2009 2010 2011 2012

Calendar

Full QUARTERLY SALES ($ mill.) A Fiscal Apr.Per Jul.Per Oct.Per Jan.Per Year 591.7 592.3 527.2 483.4 2194.6 426.8 470.2 462.4 469.1 1828.5 476.2 483.4 505.3 515.3 1980.2 523.6 546.4 555 580 2205 560 580 590 620 2350 Full EARNINGS PER SHARE AB Fiscal Apr.Per Jul.Per Oct.Per Jan.Per Year .47 .54 - d1.03 .02 d.04 .06 .20 .05 .31 .38 .32 .42 .19 1.30 .51 .45 .55 .29 1.80 .60 .55 .65 .40 2.20 QUARTERLY DIVIDENDS PAID Full Mar.31 Jun.30 Sep.30 Dec.31 Year

2007 2008 2009 2010 2011

NO CASH DIVIDENDS BEING PAID

ANNs fashions appear to be back in vogue. The womens apparel retailer posted first-quarter (fiscal year ends January 28, 2012) earnings of $0.51 a share, 34% better than the year before. Sales advanced 10%, to $523.6 million, on 8% comparable-sales growth. Meanwhile, the companys e-commerce business continues to shine, with Ann Taylor Web sales growing 47%, and Loft comps increasing 32%. We see no reason for top-line trends to slow, given the easy comparisons likely for the remainder of the year. The cost structure ought to allow a better portion of the aforementioned gains to make their way to the bottom line. Management has been paring its store base, shutting the doors of underperforming locations for roughly three years. The downsizing effort has produced a much more friendly cost structure and remodelings have taken center stage. This will probably help to drive customer traffic and increase productivity when the economy shows signs of a sustainable recovery. The stock is ranked 2 (Above Average) for Timeliness. The favorable earnings outlook for the next six to 12 months

should support good price performance over that time. The stock is actually down 15% since our May review and presents a good buying opportunity in our opinion. Moreover, the current price tag also fails to account for a healthy portion of the gains we envision out to mid-decade. That said, interested parties will want to keep an eye on the retailers shelves ... Merchandise inventory swelled 15% in the most recent period, suggesting that greater discounts may be in the works. This would, in turn, pressure margins and eat away at profitability. . . . as well as the companys cash reserve. ANNs cash pile was cut in half last year. As a result, managements aggressive share-repurchase campaign will probably have to be put on the back burner for the time being. Although we look for healthy cash flow generation to help rebuild the coffers, a fashion miscue, or another economic downturn, could take a toll on the companys plans to begin expanding its presence via store expansion and threaten to prove our projections too generous. Andre J. Costanza August 5, 2011
Companys Financial Strength Stocks Price Stability Price Growth Persistence Earnings Predictability B+ 15 40 10

(A) Fiscal years end on the Saturday nearest January 31st of the following calendar year. Quarterly figures may not sum to annual totals due to rounding.

(B) Diluted earnings. Excludes nonrecurring charges: 99, 1; 00, 9; 01, 15; 04, 11; 05, 13; 08, $5.87; 09, 64; 10, 6. Next earnings report due late Aug.

(C) Wrote off intangibles in 2008. (D) In millions, adjusted for splits. (E) Earnings prior to 02 include annual amortization of goodwill.

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