Ethan Allen 4Q sales, profits dip
By Larry Thomas -- Furniture Today, August 5, 2007
Danbury, Conn. — Retailer-manufacturer Ethan Allen said sales dropped 5% in its fourth quarter, while net income slipped 8.5%.
The company said the declines were due largely to the continuing industry-wide slump, but noted its gross margins improved two percentage points, largely because retail sales made up a greater percentage of total sales.
Sales in the quarter ended June 30 totaled $258.5 million, compared with $272 million in the fourth quarter last year.
Net income came to $20.5 million, or 65 cents per share, compared with $22.4 million, or 66 cents per share, in last year's fourth quarter.
The company said comparable-store delivered sales from its Ethan Allen stores decreased 5.9% compared with the fourth quarter of last year.
"Despite a challenging economic environment and tough period-over-period comparisons ... our sales held up and gross margins improved," said Farooq Kathwari, chairman and CEO.
He told securities analysts that other factors responsible for the margin improvement included more efficient product sourcing, reduced overhead and steady raw materials costs.
He said the company noticed a slight improvement in retail business in June — comparable-store sales were up 1% from the same month last year — but said it is too early to tell if the momentum will continue.
He noted the company's four remaining domestic case goods plants recently resumed 40-hour work weeks after several months working 32-hour schedules.
New Ethan Allen TV ads will begin airing in the fall, he said.
| Ethan Allen | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 6/30 | 2007 | 2006 | Change |
| (a) Includes pretax restructuring and impairment charges of $13.4 million in the 2007 year and $4.2 million in the 2006 year. |
|||
| Sales | $258,531,000 | $272,002,000 | (5.0%) |
| Operating income | 32,273,000 | 36,851,000 | (12.4%) |
| Net income (a) | 20,484,000 | 22,394,000 | (8.5%) |
| Earnings per share | 0.65 | 0.66 | (1.5%) |
| Year ended 6/30 | 2007 | 2006 | Change |
| Sales | $1,005,312,000 | $1,066,390,000 | (5.7%) |
| Operating income | 124,561,000 | 146,913,000 | (15.2%) |
| Net income (a) | 69,227,000 | 85,682,000 | (19.2%) |
| Earnings per share | 2.15 | 2.51 | (14.3%) |
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