DANBURY, Conn.-Improved margins and reduced interest expense boosted Ethan Allen Interiors to a mammoth 48.7 percent gain in net income in its first quarter, to $10.1 million.
The company’s gross margin rose 269 basis points to finish the quarter, which ended on Sept. 30, at 55.6 percent. Interest expense was slimmed by 6.5 percent. These items combined to fortify the bottom line after a slight 1.4 percent increase in net sales, to $187.4 million.
They also offset increases in operating expenses, which rose 2.4 percent in dollars and 48 basis points as a percentage of sales to 46 percent.
Farooq Kathwari, Ethan Allen chairman and CEO, said the company’s written business orders in its retail division grew 9.1 percent in the quarter, including an 8.2 percent gain in comparable design-center orders. “While economic conditions continue to be challenging, we remain cautiously optimistic about our future prospects,” Kathwari said.