So Ann Taylor (NYSE:ANN) sure has turned on the charm, if third-quarter profits are any indication. On Wednesday, the women's clothing retailer reported a 22% increase in net income, with sales growth of 17%. Not too shabby.

There was a time when Ann Taylor was well known as an expensive apparel venue for professional women with upwardly mobile paychecks. However, its Ann Taylor Loft has hit another important niche, by providing moderate prices and more casual threads.

What a great move, considering some pretty strong trends over the last several years. First, many businesses ditched the suited-up dress codes of the past to allow for more casual attire. Then, with the economy in the doldrums, lower prices are downright hip.

Looks like that idea has worked like a charm, and has been well received. After all, the company's strong sales were hinged on the Loft concept. Ann Taylor rang up just shy of 2% comparable-stores sales growth; compare that to Loft, which increased 13%.

Another interesting angle to the story is that Ann Taylor fashions have been so right-on that customers had to have them. In other words, shoppers were willing to buy them outright, at full price, instead of waiting for red-lined price tag reductions later in the season. (I have been guilty of doing just this at Ann Taylor, even though I am usually an avid red-line hunter, and never once did I regret one of those purchases.)

And when shoppers are willing to pay full price, that's a clue to investors that a retailer's got its finger on the pulse of what its target customers are looking for, and that goes a long way. Right now, however, this is no Cinderella story; Ann Taylor shares are currently trading 117% higher than their 52-week low, and that might make some would-be investors about as comfortable as last year's spiked heels.

We already know about the mixed view for retail this fall, with high-profile names pulling off some fashionable hits and frumpy misses. If Ann Taylor can continue capitalizing on solid appeal and lure would-be holiday revelers into its stores for their party attire, it could put more stunning sales on the runway.

Is Ann Taylor ahead of competitors, or is it just getting ahead of itself, judging by its soaring stock price? Shop around ideas on the Fool's Retail discussion board.

Alyce Lomax welcomes your feedback at alomax@fool.com.