Ethan Allen (ETH) Tops Q1 EPS by 1c

Ethan Allen (NYSE: ETH) reported Q1 EPS of $0.35, $0.01 better than the analyst estimate of $0.34. Revenue for the quarter came in at $173.9 million versus the consensus estimate of $175.13 million.

Farooq Kathwari, Ethan Allen’s Chairman, President and CEO commented, “While we have continued to have strong earnings and cash generation, we believe we have a major opportunity to further increase our profitability by increasing our sales and leveraging our more efficient vertically integrated structure. We continue to strengthen our talent, marketing, retail network, products, manufacturing, logistics and technology, while also maintaining our focus on good governance and social responsibility.”

Mr. Kathwari continued, “During October, we launched a major initiative — the Ethan Allen Member Program. Those who enroll receive special members-only pricing, complimentary interior design service, free shipping and white glove in-home delivery, and in our U.S. design centers, access to special financing options. The membership program will benefit our clients, enable our team of about 1,500 North American interior designers and our vertically integrated operations to operate more efficiently with the opportunity to improve our operating margins. About 75% of our products are made in our North American workshops. The membership program was launched in October with a strong advertising campaign utilizing direct mail, television and digital mediums. We plan to continue with enhanced marketing as we move through our fiscal 2020 year under our new ‘We Make the American Home’ campaign designed to further amplify our design heritage and quintessential American brand identity.”

Mr. Kathwari further commented, “Today we also start our annual convention with interior designers and retail management from all over the world. They will get a first look at our upcoming introductions for spring 2020 including an upholstery brand aimed at younger customers and a modern take on farmhouse styles.”

“While our wholesale orders from China declined 38% mainly due to the imposition of tariffs by China, total wholesale orders excluding our China business increased 1%. Including the impact of decreased China orders, our total wholesale orders decreased 1.5% in the first quarter of fiscal 2020 compared with the same quarter last fiscal year. As expected, our contract business, driven by the GSA contract, had another strong quarter. We believe our new format of reporting wholesale orders booked through all channels provides a more holistic view of our business than our previous reporting approach focusing on the change in only the Company’s retail division written orders,” Mr. Kathwari concluded.

For earnings history and earnings-related data on Ethan Allen (ETH) click here.

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