Ethan Allen Sales Increase 5.5 percent in Fiscal Q4

July 27, 2018  by Laurie Northington in Business Strategy, Financial Reports, Industry   

Consolidated net sales of $205.6 million increased 5.5 percent in the fourth quarter. Gross margin of 54.1 percent is down from 55.6 percent.

Full fiscal year consolidated net sales were $766 million, up 0.4 percent from 2017. Gross margin, operating profit margin and adjusted operating profit margin were 54.2, 6.4 and 7.6 percent, respectively, in fiscal 2018 and 55, 6.5 and 8.5 percent in fiscal 2017.

"Fiscal 2018 has been a year of major changes and improvements," said Farooq Kathwari, chairman and CEO. "We strengthened our leadership in our vertically integrated business, undertook major product innovation, continued our retail transformation, and increased our spend in advertising, which reduced our EPS by about $0.09 over the third and fourth quarters. We made infrastructure and technology investments to provide operational excellence and an expanded digital presence, enabling us to integrate personal services with technology-all under the umbrella of a socially responsible approach to business."

Kathwari continued, "During the fiscal year we were pleased to be an awardee of the GSA contract; however, our gross margins were under pressure due to new products for this contract and the short time to deliver. In addition, raw material costs increased during the year, further impacting our gross margins. Fortunately, these disruptions stabilized during the fourth quarter. We ended the fiscal year with our backlogs well positioned, with the wholesale backlog increasing 19.3 percent compared to the prior year end and retail division backlog decreasing by 2.3 percent due to improvements in shipments. We are pleased with both our increase in sales and our earnings in the fourth quarter.  Although our retail division written orders were lower in the fourth quarter, we believe we are well positioned to grow our sales and earnings as we move forward."