Ethan Allen Net Gains in Q4, Falls for Fiscal Year
DANBURY, Conn.-Although sales slipped, fourth-quarter net income for Ethan Allen Interiors increased 12.3 percent to $8.2 million. This brought the manufacturer/retailer's bottom line for the year to $32.5 million, down 34.6 percent from the previous fiscal year.
The year's net-profit results included income-tax expense of $17.7 million, compared to an income-tax benefit of $8.5 million last year.
Controls on operating expenses helped offset a slight decrease in net sales in the quarter, which ended on June 30. Selling, general and administrative expenses dropped 4.3 percent in dollars and 124 basis points as a percentage of sales, to 44.9 percent. Gross margin ticked up five basis points to 54 percent. Farooq Kathwari, Ethan Allen's chairman and CEO, said the strong profit performance owed to "major improvements in all areas but especially in the operations of the retail division."
Net sales slipped 1.7 percent to $182.3 million. Written orders from Ethan Allen's retail division were down 1.9 percent, including a 0.9 percent fall in comparable-design-center written orders. Kathwari said written and delivered sales felt the impact of significant reductions in clearance events, reduced international shipments and "timing of events," among other factors.
"Our many initiatives in fiscal 2013 positioned us for the opportunity to increase sales in fiscal 2014 and to continue improving our profitability," Kathwari said. "We are cautiously optimistic regarding our growth opportunities in fiscal 2014."