/Ethan Allen sales decline 6.7% in quarter; earnings down 13%

Ethan Allen sales decline 6.7% in quarter; earnings down 13%

DANBURY, Conn. — Ethan Allen’s sales declined 6.7% in its fiscal second quarter ended Dec. 31 and

earnings were 13% below the comparable period a year earlier, the company reported.

Still, Chairman and CEO Farooq Kathwari said management was pleased with the company’s performance in the latest quarter, which included operating earnings of 14.2% of sales “despute a soft home furnishings retail environment and challenging prior year comparisons.”

The company said its sales in the quarter amounted to $257.4 million and earnings were $22.8 million or 70 cents per share. For the six months ended Dec. 30, sales were $500.2 million, down 5.1% from a year earlier, and earnings were $31.2 million or 96 cents per share, down 27.9%.

Excluding the effect of restructuring and impairment charges in both periods, earnings in the latest six months were $39.8 million or $1.22 per share, down 13.3% from $45.9 million or $1.34 per share a year earlier.

In the latest quarter, delivered sales in the company’s retail division decreased 1.4% to $177.4 million, while wholesale sales decreased 11.7% to $165.7 million.

Kathwari said comparisons with the 2012 quarter were difficult because the prior-year results were favorably affected by stronger economic conditions and the company’s initiative to reduce lead times, which cut its order backlog and increased profitability.

Looking at this year’s prospects, he said, “We saw positive trends in comparable written sales during the month of December. We also recognize that the home furnishings retail environment, as a whole, remains uncertain. At this stage, due to the strong positioning of Ethan Allen at retail, we believe the current average of analyst estimates for the fiscal third quarter ended March 31, 2014 is within reach.”

Ethan Allen sells its product through a network of 307 stores in the United States and abroad, of which 149 are company-owned.