Ethan Allen shares plummet on outlook

Ethan Allen sees wider than expected loss in its first quarter, shares tumble

• On 2:04 pm EDT, Monday October 26, 2009

DANBURY, Conn. (AP) -- Shares of home-furnishings retailer Ethan Allen Interiors Inc. fell 14 percent on Monday after the company said last week that it expects a wider loss in its first quarter than analysts had predicted.

For the period ended Sept. 30, the company said it expects a loss before items of between 21 cents and 23 cents per share. That is wider than a loss of 8 cents per share that analysts had expected, according toThomson Reuters.

Ethan Allen shares fell $2.36, or 14 percent, to $14.31 in early afternoon trading. It plans to provide more details on Thursday.

CEO Farooq Kathwari said in a statement that results were affected by costs for a consolidation of an upholstery factory and realignment of case goods manufacturing in the Northeast.

Ethan Allen's sales also fell shy of Wall Street expectations, of $150.4 million. Ethan Allen said net sales were $136.2 million, down from $205.8 million a year earlier.

Stifel Nicolaus & Co. analyst John Baugh said the results were disappointing, especially since Ethan Allen said in August that "revenue declines were substantially reduced" on a sequential basis.

The Danbury, Conn., company also said on Friday that it had refinanced a senior secured credit revolving facility, raising its available credit by $20 million, to $60 million. The company said it has no plans to use the facility other than for $12.5 million in outstanding letters of credit.

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