Ethan Allen Interiors posts Q2 sales drop

Overview

• Interior design firm's fiscal Q2 net sales declined yr/yr, missing analyst expectations

• Adjusted EPS for fiscal Q2 beat analyst expectations

• Company announced regular quarterly cash dividend of $0.39 per share

Outlook

• Company remains cautiously optimistic about navigating the current operating environment

• Company highlights advantages of North American manufacturing and refreshed retail centers

• Ethan Allen does not provide specific financial guidance for the current quarter or full year

Result Drivers

• GROSS MARGINS - Co maintained strong gross margins of 60.9% despite sales decline, aided by cost control and operational efficiencies

• MARKETING SPEND - Co increased marketing spend by 25.2% to $4.9 mln, impacting operating margins

• ORDER DECLINE - Retail and wholesale written orders decreased 17.9% and 19.3%, respectively, due to macroeconomic challenges

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the home furnishings peer group is "hold"

• Wall Street's median 12-month price target for Ethan Allen Interiors Inc is $28.00, about 15.2% above its January 27 closing price of $24.30

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 15 three months ago

Press Release: ID:nGNX2TNj58

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