Ethan Allen sales down 7.7%
By Larry Thomas -- Furniture Today, April 30, 2007
Danbury, Conn. — Continuing softness at retail led to a 7.7% decline in sales in the most recent quarter at Ethan Allen.
The manufacturer and retailer also reported a 12.5% decline in net income in the third quarter of its fiscal year, ended March 31.
Sales amounted to $246.5 million and net income was $17.5 million.
"While we recognize that the home furnishings retail environment remains uncertain, some positive trends have emerged in recent weeks," said Farooq Kathwari, chairman and CEO. "In addition, we continue to believe that our strategic initiatives provide us with stronger positioning as conditions improve."
In the most recent quarter, net delivered sales at the company's retail division decreased 0.3% to $167.7 million, while wholesale sales fell 10.6% to $171.9 million.
During a conference call with securities analysts, Kathwari said the higher proportion of retail sales and better manufacturing efficiencies helped the company keep its gross margin above 50% and operating margin above 11% in the quarter.
He said the company's case goods factories operated on a 32-hour work week for most of the quarter but should resume a 40-hour schedule in May.
For the first nine months of its fiscal year, Ethan Allen had sales of $746.8 million, a 6% decline from the previous year.
Nine-month net income totaled $48.7 million, a 23% decline from the previous year.
| Ethan Allen | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 3/31 | 2007 | 2006 | Change |
| (a) Includes restructuring and impairment charges of $13.4 million in the 2007 nine months and $4.2 million in the 2006 nine months, and a restructuring and impairment credit of $180,000 in the 2007 quarter. (b) Based on average shares outstanding of 32.4 million in the 2007 quarter, 32.5 million in the 2007 nine months, 34 million in the 2006 quarter and 34.2 million in the 2006 nine months. | |||
| Sales | $246,539,000 | $267,071,000 | (7.7%) |
| Operating income | 27,907,000 | 33,339,000 | (16.3%) |
| Net income (a) | 17,499,000 | 19,994,000 | (12.5%) |
| Earnings per share (b) | 0.54 | 0.59 | (8.5%) |
| 9 months ended 3/31 | 2007 | 2006 | Change |
| Sales | $746,781,000 | $794,388,000 | (6.0%) |
| Operating income | 92,288,000 | 110,062,000 | (16.1%) |
| Net income (a) | 48,743,000 | 63,288,000 | (23.0%) |
| Earnings per share (b) | 1.50 | 1.85 | (18.9%) |
