Ethan Allen Announces Sales and Earnings For Second Quarter
Furniture World Magazine
Ethan Allen Interiors Inc. reported sales and earnings for the three and six months ended December 31, 2004.
Net delivered sales for the quarter ended December 31, 2004 increased 1.7% to $245.3 million from $241.2 million in the prior year quarter. Net delivered sales for the Company's Retail division increased 4.2% to $155.8 million, while Wholesale sales decreased 1.4% to $161.3 million during that same period. Comparable Ethan Allen store delivered sales increased 1.8% over the prior year quarter. During that same period, Retail division written sales increased 8.2% while comparable store written sales increased 5.7%.
For the six months ended December 31, 2004, net sales increased 2.5% to $475.6 million from $463.9 million in the prior year. Net delivered sales for the Company's Retail division increased 5.4% to $297.5 million, while Wholesale sales were relatively unchanged at $322.7 million. Year-to-date, comparable Ethan Allen store delivered sales increased 3.3% over the prior year period. During that same period, Retail division written sales increased 3.8% while comparable store written sales increased 1.8%.
Earnings per share amounted to $0.64 for the current quarter, unchanged from the prior year comparable period. Current quarter operating income totaled $36.8 million, or 15.0% of net sales, and net income amounted to $23.3 million. This compares to $39.1 million and $24.4 million, respectively, in the prior year quarter.
Farooq Kathwari, Chairman and CEO, commented: "During the quarter, we launched a program to increase the distribution of the Ethan Allen direct mail magazine. We distributed over 11 million magazines during the quarter, representing an increase of 33% over historical levels for the period, and resulting in additional costs of $1.1 million, or $0.02 per share. This decision had a positive impact on our business as reflected in the 5.7% increase in Retail division comparable store written sales."
Earnings per share for the current six month period totaled $1.15, representing an increase of 1.8% from prior year comparable period earnings per share of $1.13. Year to date operating income totaled $68.0 million, or 14.3% of net sales, and net income amounted to $42.2 million. This compares to $67.7 million and $43.3 million, respectively, in the prior year period.
During the six months ended December 31, 2004, Ethan Allen spent $38.4 million to repurchase 1.1 million shares of its stock in the open market. As of the end of the current quarter, the Company has a remaining authorization to repurchase an additional 2 million shares. In May 2004, the Company paid a $3.00 per share special dividend, and during the first quarter of the current fiscal year the Board increased the regular quarterly dividend by 50%, from $0.10 per share to $0.15 per share.
Mr. Kathwari commented: "We are gratified that our strong merchandising and marketing programs have enabled us to increase sales, maintain high levels of profitability, and continue to increase shareholder value through share repurchases and cash dividends."
Mr. Kathwari further stated: "Our growth strategy continues to be focused on providing solutions to make the decorating process easier for our customers. In the coming months, we will continue to increase the distribution of our "Furnishing Solutions by Ethan Allen" direct mail magazine which will feature the exciting introduction of new collections that update the casual side of our business and compliment the updates we've introduced during the past two years on the formal side of our business. By this spring, 70% of our product offerings will have been newly introduced within the past three years."
"We also continue to focus on rejuvenating our store network by adding new stores and relocating existing stores to better locations. Over the past five years, we've opened 66 new stores. During the quarter, we opened a new store in Palm Desert, California, and within the past few weeks we've relocated two stores in the Chicago area. Our objective is to develop stylish, quality products at great values, create stores that inspire our associates and our customers, and maintain a well-trained and motivated team to assist in providing decorating solutions to consumers."
Ethan Allen Interiors Inc. is a leading manufacturer and retailer of quality home furnishings. The Company sells a full range of furniture products and decorative accessories through an exclusive network of 313 retail stores in the United States and abroad, of which 124 are Company-owned. Ethan Allen has 12 manufacturing facilities, which include 2 sawmills, located throughout the United States.