Ethan Allen sees orders climb 25% in first two months of 2010

New marketing programs driving more traffic to design centers

Furniture Today Staff -- Furniture Today, March 3, 2010

DANBURY, Conn. — Ethan Allen said Tuesday that its written orders for the two months ended Feb. 28 were up about 25% from the same period a year earlier.

Farooq Kathwari, chairman and CEO, made the comment in advance of the company's presentation at the Raymond James Annual Institutional Investor Conference in Orlando, Fla., on March 9. The presentation will be webcast and can be seen on the Ethan Allen Web site at ethanallen.com.

"We are pleased that our marketing programs that focus on projecting our value proposition of style, quality, and design services together with significant savings are driving traffic to our design centers. This increase in traffic is resulting in higher written orders than we have seen in some time. It is important to keep in mind that for the most part, orders taken in this period will be delivered and reported as sales in our fourth fiscal quarter ending June 30," he said in a statement.

In its most recent quarter, the fiscal second quarter ended Dec. 31, the retailer and manufacturer posted a $3.3 million loss, resulting in large part from consolidation and restructuring initiatives in its case goods and upholstery plants. Sales for the quarter were $143.3 million, with net sales for retail operations declining 27.2% to $107.1 million and wholesale net sales down 22.3% to $84.5 million.

In his statement, Kathwari said that "improvements in written orders (are) the first step toward improved delivered sales and profitability. We continue to work through the challenges of consolidating our manufacturing operations while converting our wooden product offerings to custom and more recently the significant ramping up of domestic production capacity.

"We are very pleased with the recent significant increase in written sales, however macro- economic conditions continue to be challenging. While optimistic about the potential financial results for our fourth fiscal quarter ending June 30, 2010, we remain cautious given the many operational challenges being managed."

 

In trading Wednesday, Ethan Allen's stock price jumped 25% to close at just over $20, near its 52-week high.

 

Other furniture manufacturing stocks also rose Wednesday, with Furniture Brands International up about 15%, Hooker Furniture up 7%, Stanley, Flexsteel and Bassett each up about 4%, Chromcraft Revington up about 3% and La-Z-Boy gaining just under 2%.