Ethan Allen Net Jumps 21.9 Percent in Q2
DANBURY, Conn.-Second-quarter net income for Ethan Allen Interiors rose by a healthy 21.9 percent to $9.8 million, as the company managed to record a solid quarter in spite of the effects of Hurricane Sandy.
Fueled by a 6.1 percent increase in net sales from the retail division, net sales for the company as a whole rose 4.4 percent to $191.3 million in the quarter, which ended on Dec. 31. Although sales made gains, the hurricane, which struck the Northeast in late October, did affect Ethan Allen's business. Farooq Kathwari, chairman and CEO, said the superstorm hit 28 of Ethan Allen's retail design centers and eight independent retail locations, and was a major factor in the company's deceleration in written orders, which increased by just 1.2 percent in the quarter.
However, the company did boost gross margin by 80 basis points to 54.4 percent. Selling, general and administrative expenses, while increasing 2.8 percent in dollars, were reduced by 71 basis points as a percentage of sales to 45.3 percent. The bottom line also benefited from a 3.3 percent drop in interest expense.
The second quarter also saw Ethan Allen continuing to expand internationally. The company opened design centers in Brussels and Montreal. Kathwari also noted that, in spite of the storm and the still-challenging economic environment, Ethan Allen was able to boost adjusted earnings per share by 30 percent.