Ethan Allen announces Q3 sales & earnings

22 Apr '08

5 min read

Excluding the impact of these charges in both periods, earnings per diluted share for the current year amounted to $1.67 on net income of $49.5 million, from $1.76 per share, on net income of $57.2 million in the prior year comparable period.

Farooq Kathwari, Chairman and CEO, commented, "Despite the challenges of a weak economy, we are pleased with the major progress we are making in positioning Ethan Allen as a provider of design solutions and service. Our results in the third quarter ended March 31, 2008, were impacted by a weaker economy and costs associated with the many initiatives we have implemented to strengthen our business."

Mr. Kathwari continued, "Sales in March particularly slowed down due to broader economic concerns raised by the extraordinary intervention of the Federal Reserve to stabilize financial institutions, and to some extent due to Easter falling in March this year. With a relatively calmer economic environment in April, and Easter behind us, the decline in sales so far has been considerably reduced."

Mr. Kathwari stated, "During the March quarter we continued to reposition our retail network. We opened four new relocated design centers, converted four into design studios, consolidated or closed seven design centers and two retail service centers, and substantially completed the implementation of Lifestyle presentations in nearly all of our 153 company-owned design centers.

During the quarter that will end June 30, 2008, we expect to consolidate the two remaining Design Centers located in New York City with the opening of the new flagship Design Center in Manhattan located at 3rd Avenue and 60th Street. The company expects to take a $3 to $4 million pretax restructuring charge or $1.9 to $2.5 million after tax, during the fourth quarter. We also expect to open five or six additional new design centers during the fourth quarter."

Mr. Kathwari continued, "As we stated in our April 10, 2008, press release, we have absorbed costs related to all of these initiatives, especially in the third quarter, and we should see benefits in our next fiscal year. Most of the major relocation of our design centers is expected to be completed this fiscal year, and we expect our capital expenditures for the next fiscal year to be reduced by about 30% to 50% from the current annual expenditure level of about $70 million."
Ethan Allen Interiors Inc

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