Ethan Allen 2Q sales up 1.7%, profits dip 4.6%
Janice Chamberlain -- Furniture Today, January 24, 2005
DANBURY, Conn. -- Retailer and manufacturer Ethan Allen posted sales of $245.3 million in its second quarter, a 1.7% increase over sales of $241.2 million in the comparable 2003 period. Net income in the quarter ended Dec. 31 declined 4.6% to $23.3 million from $24.4 million in the year-earlier period.
The vertically integrated company said delivered sales in its retail division were up 4.2% to $155.8 million, while wholesale sales decreased 1.4% to $161.3 million. Same-store sales were up 1.8% and retail division written sales increased 8.2% in the latest quarter. Same-store written orders were up 5.7%.In a conference call with analysts, Chairman and CEO Farooq Kathwari said the overall gross margin in the latest quarter was 48.7%, up slightly from the 48.2% posted a year ago. He said the wholesale operating margin for the quarter was 16.6% and the retail operating margin was 4%, compared with 18.5% and 4%, respectively, for the year-earlier period.“During the quarter, we launched a program to increase the distribution of the Ethan Allen direct-mail magazine,” Kathwari said. “We distributed over 11 million magazines during the quarter, representing an increase of 33% over historical levels for the period, and resulting in additional costs of $1.1 million.”Boosting the magazine’s distribution had a positive affect on Ethan Allen’s business, reflected by the 5.7% increase in retail division same-store sales, he said.For the six months ended Dec. 31, sales increased 2.5% to $475.6 million from $463.9 million a year ago. Net earnings were $42.2 million, down 2.6% from prior-year profits of $43.3 million. Retail division delivered sales increased 5.4% to $297.5 million, while wholesale sales were relatively unchanged at $322.7 million.
Year to date, same-store written sales were up 3.8%.In the six months, Ethan Allen spent $38.4 million to repurchase 1.1 million shares of its stock, and has a remaining authorization to buy an additional 2 million shares.“We are gratified that our strong merchandising and marketing programs have enabled us to increase sales, maintain high levels of profitability and continue to increase shareholder value through share repurchases and cash dividends,” Kathwari said.“Our growth strategy continues to be focused on providing solutions to make the decorating process easier for our customers,” he said. “In the coming months, we will continue to increase the distribution of our Furnishing Solutions by Ethan Allen direct-mail magazine, which will feature ... new collections that update the casual side of our business and complement the updates we’ve introduced during the past two years on the formal side of our business. By this spring, 70% of our product offerings will have been introduced in the past three years.”In the conference call, Kathwari reiterated company guidance for its year ending June 2005: a 5% increase in sales and an 8% rise in earnings.In the past five years, Ethan Allen has opened 66 new stores, and plans to open seven or eight in the second half of its current fiscal year, and 15 in the next 12 months.
-
Ethan Allen 2Q sales up 1.7%, profits dip 4.6%
Feb 6, 2005
Featured Company
-
FurnitureCore.com
FurnitureCore.com is a dynamic web application aimed at the furniture industry. Retailers and manufacturers alike will find our deep reserve of tools to be exactly what their furniture business needs.www.furniturecore.com... more
VIEW ALL GALLERIES
