Ethan Allen (ETH) Tops Q1 EPS by 2c
Ethan Allen (NYSE: ETH) reported Q1 EPS of $0.37, $0.02 better than the analyst estimate of $0.35. Revenue for the quarter came in at $151.1 million versus the consensus estimate of $151.1 million.
Farooq Kathwari, Ethan Allen’s Chairman, President and CEO commented, “We are gratified that despite many challenges due to the COVID-19 pandemic, we performed very well. The COVID-19 crisis has challenged our operations, but our teams remained focused on serving our clients and keeping our workplaces safe during the first quarter of fiscal 2021. Our fundamentals continue to be strong, with retail written orders and backlogs reporting double-digit growth, both within our design centers and from e-commerce. Production levels throughout our manufacturing increased steadily during the first quarter and by the end of the second quarter we expect to return back to pre-COVID-19 pandemic levels, which should reduce our high undelivered order backlogs and provide us an opportunity to increase operating margin. Our unique vertical structure, whereby we produce about 75% of what we sell, mostly on a custom made-to-order basis in our own North American manufacturing plants, allows us to maintain stronger service levels with greater control over inventory. We continued our marketing efforts and growth with our relevant offerings as well as our complimentary personal interior design service combined with technology and in-home white-glove delivery.”
Mr. Kathwari continued, “Retail segment written orders were up 10.8% over the prior year, including 11.8% growth in September. Our retail written orders in October also continue to be very strong compared to the previous year, increasing over 50% month-to-date. We continue to see increased demand for our products in our design centers and online. The previous year October retail written orders were impacted by the introduction of the membership program. We will continue to focus on our advantages, including a strong retail network, our vertical structure and increasing the use of technology in all aspects of our enterprise, while also maintaining our focus on strong governance and social responsibility.”
“Given the positive trends in cash flows, we repaid the remaining $50.0 million in outstanding debt, previously borrowed under our credit facility, and ended the quarter with $62.0 million of cash. We are cautiously optimistic as we head into the fall and winter months, based on current demand trends, but recognize the pandemic is still upon us and much uncertainty exists on a variety of fronts. We remain agile in managing the business day to day, focusing on providing great personal service to our customers while operating in a safe manner. We are proud to have delivered strong cash results in this first quarter, with $42.2 million in cash from operations and a strong balance sheet which enables us to navigate this uncertain time,” Mr. Kathwari concluded.
For earnings history and earnings-related data on Ethan Allen (ETH) click here.