1. Consumer Discretionary Joshua Anderson Kunal Arora Branyan Booth Joseph Chandraraj

2. Agenda Sector Recommendation Recap Stock Selected Overview Financial Analysis Valuation Analysis Stock Recommendation

3. (07/31/09) S&P 500 WeightSIM Weight+/- Consumer Discretionary9.11%7.19%-1.92% Consumer Staples11.81%11.65%-0.16% Energy12.04%10.74%-1.31% Financials13.86%8.93%-4.93% Health Care13.73%13.30%-0.43% Industrials9.98%12.37%2.39% Information Technology18.72%20.41%1.69% Materials3.40%4.98%1.58% Telecommunication Services3.41%3.39%-0.02% Utilities3.94%3.61%-0.34% Cash0.00%3.38% Sector Allocation Overview

4. SIM Current Stock Holdings Security Mkt Price (07/31/09) Mkt Value (07/31/09) Unrealized Gain/Loss Price Target*Upside* %age Portfolio (07/31/09) %age Sector (07/31/09) Aéropostale36.40$150,150$998$38.054.53%0.87%12.09% Best Buy37.37$300,642($86,982)$44.0017.74%1.74%24.20% Comcast14.86$389,332($41,341)$19.0528.20%2.25%31.34% GameStop21.89$139,002($21,751)$29.1132.98%0.80%11.19% McDonalds55.08$263,282$2,116 $57.04 3.55%1.52%21.19% Total7.18%100.00% * Price Target: DCF analysis except Comcast from Yahoo Finance

5. Sector Recommendation – Recap ViewReason BusinessSlightly PositiveMature, Low growth but global expansion can open new opportunities EconomicNegativeDisposable Income Consumer Spending Saving Rate Unemployment FinancialNegativeRevenue growth Margins ValuationNegativeOver valued high P/E ratios Recommendation: Hold the Underweight Position at 150bps

6. Stock Screening Consumer Discretionary Universe – 822 –Price-to-Forward Earnings Below S&P 500 –EBITDA margins above industry and sector –Net debt to Assets below 50% Stock Screening Results - 44 –Review of Fundamentals In Depth Analysis – 4 –Coach, Gymboree, Hasbro, GameStop

7. DCF Valuations CompanyCurrent Price (08/04/09) Target PriceUpside Coach$29.31$34.4417.5% Gymboree$39.87$42.145.7% Hasbro$26.37$19.65(25.6%) GameStop$24.42$29.1119.2% Aéropostale$36.21$38.055.1% McDonalds$55.01$57.043.7%

8. Aéropostale in the SIM portfolio ARO outperformed the sector for most of the quarter ARO steadily reducing cash conversion cycle High revenue growth, competitive margins No long-term debt, average lease shorter

9. Aéropostale Now Lots of Press for increasing same-store sales for June P/S a little high, Forward P/E a little low, all others right on target Margins and Cash Flow/Share as high as ever Share buybacks increasingly important to meeting consensus forecasts

10. Aéropostale’s Future Averaged 17% revenue growth over the last 5 years. How quickly will it fall? Will PS from Aéropostale cannibalize Aéropostale’s sales or generate synergies between the brands? Has Aéropostale’s management learned from the failed Jimmy’Z experiment?

11. Coach Overview Designs & markets gifts for men & women, founded in 1941 Primary products: handbags, footwear, wearables, business cases, sunwear, watches, travel bags, and fragrance. Sells via company-operated stores, internet, catalog, and indirect channels, such as department stores 324 retail stores & 106 factory stores in North America; 155 locations in Japan. 2009 Revenue $3.23 billion (2% increase from ‘08)

12. Coach –Valuations (DCF) DCF Valuation: -Current Price: $29.28; Target Price: $34.44; Upside: 17.6% Key Assumptions: - 3 year revenue growth: 14% - 5 year historical growth rate: 21% - Estimated long term growth rate 15% - China sales up in double digits, plan to open 15 stores this year and 50 stores over next 5 years - New Men’s store in Japan -Terminal growth rate: 4.5% -Discount rate: 11%

13. Coach - Absolute Valuation (7/31/09 Price 29.59)HighLowMedianCurrent Target Multiple Target E,B,CF per share Target Price P/FE30.07.922.915.319.1$1.22$23.30 P/B14.13.110.35.98.1$4.75$38.51 P/S8.21.56.52.84.65$8.63$40.15 P/CF36.55.825.812.018.9$1.22$22.99 Average Target Price: $31.24

14. Coach - P/FE Relative to S&P500 Median 1.47

15. Coach - P/FE Relative to Sector Median 1.21

16. Coach – P/S Ratio (Absolute) Median 5.3

17. Coach Recommendations ViewReason BusinessPositive - Strong market position and brand - Robust Financial Performance - Strong product portfolio FinancialPositive -Revenue, EPS, are going up relative to consumer Discretionary ValuationPositive - Target Price $33.80 (80/20 weight to DCF), 15.5% upside and 1% div yield Recommendation: Buy

18. Action Recommendation – Within Sector Current Weight In SIM Portfolio Proposed Weight In SIM Portfolio Proposed Change Aéropostale 0.87%0%(0.87%) Best Buy 1.74% 0% Comcast 2.25% 0% GameStop 0.80%1.10%0.30% McDonalds 1.52%1.22%(0.30%) Coach 0%0.87%

19. Questions?