From Home Furnishing Business
Ethan Allen Sales Rise 1.5%, But Profits Fall in Latest Quarter
Ethan Allen (ETH) said sales in its first fiscal quarter rose 1.5%, but profits fell 12% due to increased marketing expenses, new retail store openings and costs associated with the launch of its Ethan Allen/Disney line.
Net sales for the quarter ended Sept. 30 were $193.3 million, up from $190.4 million in the same quarter last year. Sales in its retail division were up 4.3%, including a comparable store sales increase of 5.7%, while sales in the wholesale segment fell 4.9%.
Retail written sales, which include merchandise sold but not delivered, rose 8.1%.
Net income totaled $11.5 million or 41 cents per share, down from $13.1 million or 46 cents per share in the comparable quarter.
"We are pleased with our results, including an 8.1% written sales increase, and with the fact that we have maintained a strong adjusted operating margin of 9.8% despite making added investments in a number of areas, such as marketing, new Design Center openings, and the launch of new product programs, including Ethan Allen | Disney,” said Farooq Kathwari, chairman and CEO.
“Our many initiatives will continue to position us as a known and desired brand. We remain cautiously optimistic,” he added.
Ethan Allen ended the quarter with about 300 company-owned and independent retail stores, which the company calls Design Centers. The company also operates six factories and one sawmill in the United States, as well as one factory each in Mexico and Honduras. About 75% of its products are made in its North American plants.