Ethan Allen sales rise 1% but profits jump 17%
Larry Thomas -- Furniture Today, January 23, 2014
DANBURY, Conn. — Ethan Allen said its sales edged up 1% in the quarter ended Dec. 31 as its retail division was hampered by factors ranging from the fall's government shutdown to an increase in back-ordered import products.
Net income, however, rose 17.4% due to lower interest expenses and a reduction in certain selling, general and administrative expenses.
The vertically integrated company said sales at its retail division fell 0.2%, despite a comparable-store sales increase of 3.4%. Retail division written orders fell 4%.
Net sales for the quarter - the second quarter of Ethan Allen's fiscal year - totaled $193.1 million. That compares with $191.3 million in the prior year's second fiscal quarter.
Net income was $11.6 million or 39 cents per share. That was up from $9.85 million or 34 cents per share in last year's second fiscal quarter.
"While we are pleased with the strong financial results in what is our seasonally slowest quarter, our greatest opportunity to leverage our vertically integrated structure is to increase our written sales," said Farooq Kathwari, chairman and CEO. "Written orders and deliveries were affected by several external and internal factors, including the government shutdown, challenging weather in many parts of the U.S., and an increase in back-ordered import products."
He noted that the quarter ended with a strong 14% increase in the retail backlog over the prior year.
"We remain cautiously optimistic about increasing our sales and profitability," Kathwari added. "We continue to aggressively implement marketing programs to improve our competitive differentiation."
For the six months ended Dec. 31 net sales totaled $374.8 million, a decrease of 1% from $378.7 million in the six months ended Dec. 31, 2012.
Six-month net income was $20.6 million or 70 cents per share. That was up 3.4% from $19.9 million or 68 cents per share in the first half of the previous fiscal year.
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