Ethan Allen 2Q sales, profits drop; improvements seen ahead
By Clint Engel -- Furniture Today, January 20, 2002
DANBURY, Conn. — Ethan Allen Interiors posted declines in fiscal second-quarter sales and profits, but said it was pleased with the results given the tough economic environment and its success in cutting inventories and expenses.
The company expects steady improvements in sales and earnings through the rest of the year.
The manufacturer and retailer of upscale home furnishings reported net sales of $222.9 million for the quarter ended Dec. 31, down 4.2% from the same period a year ago.
Retail sales at 93 company-owned stores were up 7.5% to $116.9 million from $108.7 million in the second quarter last year, when it had 84 company-owned stores.
Same-store sales at Ethan Allen-owned stores decreased 6.4%.
Net income for the quarter was down 8.3% to $21.2 million.
"While sales were lower compared to last year, and considering that production in our manufacturing plants was reduced, we believe we achieved strong operating results during this period," said Farooq Kathwari, chairman and chief executive officer.
"Inventories and receivables significantly decreased and operating expenses in the quarter were also lower."
Kathwari said the company has seen a steady improvement in consumer confidence since October, when results were still affected by the Sept. 11 attacks.
He said consumer confidence should continue to improve and "our business will see a steady increase in both sales and earnings."
Ethan Allen projects earnings in the range of 53 cents to 59 cents per diluted share in the third quarter and 54 cents to 60 cents in the fourth quarter.
In the quarter just ended, Ethan Allen opened four stores — one each in greater Tampa, Fla., and Chattanooga, Tenn., and relocated units in the Philadelphia and Kansas City markets.
On Dec. 31, Ethan Allen had a network of 314 stores, including the 93 company-owed stores. It has since acquired three more units.
| Quarter ended 12/31 | 2001 | 2000 | Change |
|---|---|---|---|
| Sales | $222,857,000 | $232,667,000 | (4.2%) |
| Operating income | 33,206,000 | 36,871,000 | (9.9%) |
| Net income | 21,195,000 | 23,107,000 | (8.3%) |
| Earnings per share | 0.53 | 0.58 | (8.6%) |
| 6 months ended 12/31 | 2001 | 2000 | Change |
| Sales | $429,582,000 | $443,898,000 | (3.2%) |
| Operating income | 59,741,000 | 70,173,000 | (14.9%) |
| Net income | 37,926,000 | 43,807,000 | (13.4%) |
| Earnings per share | 0.95 | 1.09 | (12.8%) |
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