Ethan Allen Interiors Earnings: Here’s Why Investors are Not Happy Now

Ethan Allen Interiors Inc. (NYSE:ETH) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 12.99%.

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Ethan Allen Interiors Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 50% to $0.21 in the quarter versus EPS of $0.14 in the year-earlier quarter.

Revenue: Decreased 4.41% to $168.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Ethan Allen Interiors Inc. reported adjusted EPS income of $0.21 per share. By that measure, the company missed the mean analyst estimate of $0.27. It missed the average revenue estimate of $180.17 million.

Quoting Management: Farooq Kathwari, Chairman and CEO commented, “While our third quarter is historically our seasonally slowest delivered sales quarter, our written and delivered sales growth rates this quarter were affected by several factors including: high prior year prototype product sales, adverse timing of the Easter and Passover holidays falling within the current year quarter, and entering the quarter with lower backlogs due to Hurricane Sandy. This quarter, we also had lower shipments to our retailer in China. 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.”

Key Stats (on next page)…

Revenue decreased 12.1% from $191.25 million in the previous quarter. EPS decreased 46.15% from $0.39 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.41 to a profit $0.42. For the current year, the average estimate has moved up from a profit of $1.44 to a profit of $1.45 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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