Ethan Allen Net Balloons in Third Quarter
DANBURY, Conn.-Third-quarter net income for Ethan Allen Interiors rose 683 percent to $27.5 million.
The bottom line for the quarter, which ended on March 31, included non-cash tax benefits from the reversal of deferred tax asset valuation allowances and other tax reserves. Without these tax benefits, Ethan Allen's profit was $4 million, up 100 percent from the third quarter of last year.
Net sales for the manufacturer/retailer rose 8 percent, to $175.9 million, including an increase of 12.3 percent in sales from the retail division and comparable sales growth from design centers of 9.4 percent.
Gross margin rose 260 basis points to 53.6 percent. Operating expenses jumped 10.4 percent in dollars and 108 basis points as a percentage of sales to 49.2 percent. According to Farooq Kathwari, Ethan Allen's chairman and CEO, the expense rise reflected the company's investments in acquiring interior design associates and management for the retail division.
"While increase our expenses, this investment provides an opportunity to grow our sales by enhancing our competitive advantage of providing complimentary interior design services," Kathwari said.