From Home Furnishing Business
Ethan Allen Projects Lower Sales, Earnings for Fiscal Year
2017 by Larry Thomas in Economic News, Financial Reports, Industry
Ethan Allen (NYSE: ETH) said it expects to report lower sales and earnings per share for the fiscal year that ended June 30, as operating costs rose due to heavy advertising spending and other initiatives.
The company said sales in the final quarter of the year were hurt by an especially weak month of April, and tough comparative numbers from the previous year.
In a preliminary financial report issued late Monday, the furniture manufacturer and retailer said it expects to report sales of $763.4 million for the fiscal, down about 4% from the previous fiscal year.
Adjusted earnings per share for the year are expected to be $1.44 to $1.45, down from $1.92 per share in the previous fiscal year. Fourth quarter earnings per share are projected at 41 cents to 42 cents, down from 57 cents per share in last year’s fourth fiscal quarter.
"During our fourth quarter, retail written orders in April decreased 7.1% and then progressively increased by 7% in May and 6.9% in June, resulting in a 1.9% increase for the quarter compared to the same period in the prior year,” said Farooq Kathwari, chairman, president and CEO.
He said increased operating costs were due to, among other things, a 27.5% jump in national advertising in the fourth quarter, investments in new Design Centers around the country, investments in technology, the launch of the Ethan Allen | Disney magical home program and the recent launch of the Ethan Allen design studio on Amazon.
"While these many initiatives, coupled with a substantial expansion of our advertising, have resulted in increased operating expenses compared to the prior year, they are now substantially completed,” Kathwari said. “We are well positioned for our fiscal 2018 and remain cautiously optimistic."
Ethan Allen will release complete financial results for the fourth quarter and fiscal year on July 26.