Ethan Allen's quarter falls short, shares tumble

Ethan Allen's profit and revenue fall short of expectations, shares sink after hours

Associated Press

DANBURY, Conn. (AP) -- Ethan Allen Interiors Inc. reported disappointing earnings and sales for its fiscal third quarter, hurt in part by a lower backlog of furniture orders linked to the fall-out from Hurricane Sandy. Shares fell by double-digits in the aftermarket session.

Ethan Allen's CEO and Chairman Farooq Kathwari said Tuesday that the third quarter is historically one of its slowest periods but also cited the shift of Easter and Passover into March from April, and lower shipments to its retailer in China, for the drop in quarterly sales. "While their sales of Ethan Allen products have grown nicely, they had accumulated inventory in anticipation of even higher sales and to support a greater number of design center openings," Kathwari said of the Chinese retailer.

He said Ethan Allen has major marketing initiatives under way and remains cautiously optimistic about its performance in its fiscal fourth quarter and next fiscal year. The company did not issue an earnings forecast.

The furniture retailer earned $4.4 million, or 15 cents per share, for the quarter that ended March 31. That compared with $27.5 million, or 94 cents per share, in the same quarter last year, which was mostly boosted by about $24 million in tax benefits. Excluding one-time expansion costs, a loss on the sale of a vacant property and other items, earnings rose to 21 cents per share from 14 cents per share. Total revenue fell more than 4 percent to $168.1 million from $175.9 million.

The quarter's results fell far short of market expectations. Analysts polled by FactSet were expecting the company to earn 27 cents per share on revenue of $179.9 million.

Shares of the Danbury, Conn., company fell nearly 14 percent to $27.50 in after-hours trading. Its stock had risen 93 cents, or 3 percent, to close regular trading at $31.86 before the report.

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