Ethan Allen Comments on Business in Advance of its International Conference, Announces Earnings Release Date for Fiscal 2018 First Quarter Results
DANBURY, CT October 12, 2017 (GLOBE NEWSWIRE) -- Ethan Allen Interiors Inc. ("Ethan Allen" or "the Company") (NYSE:ETH) commented today, in advance of its International Conference, on its business and preliminary financial results for its fiscal 2018 first quarter, which ended on September 30, 2017.
"We are looking forward to celebrating our 85th anniversary next week during our international conference, which will be attended by more than 550 associates from our North American and international retail locations, and from our manufacturing and logistics operations. During the conference, we will be recognizing more than 230 of our top interior designers and discussing our business and current initiatives," said Farooq Kathwari, Chairman and CEO of Ethan Allen. "Although both our written and delivered sales were impacted by the hurricanes, we experienced good order growth during the first quarter of fiscal 2018."
The Company's preliminary results reflect that total written orders for the retail segment increased 1.7% for the quarter, which follows an 8.1% increase in the prior year first quarter. The Company estimates total written orders would have increased 2.5% without the disruption from the hurricanes. Wholesale segment orders were very strong this quarter due to the increased retail written orders, plus an additional $12.4 million of wholesale orders from the U.S State Department Packaged Home program.
The hurricanes disrupted several key markets in which the Company operates: 15 Design Centers in Florida, including 11 company-operated locations, plus five company-operated Design Centers in the coastal Carolinas were affected by Hurricane Irma; and 11 Design Centers in Texas, with five independently operated locations in the Houston market, were impacted by Hurricane Harvey. Design Centers and delivery centers were closed anywhere from a couple of days to more than a week, with an effect on both written orders and net delivered sales. Hurricane Harvey also disrupted the Company's wholesale logistics, as the temporary shutdown of railway shipping through Houston impacted shipments from the Company's upholstery plant in Mexico, and ocean freight arrivals were delayed into the Port of Houston.
Mr. Kathwari further commented, "Additionally, our written, delivered and profitability were affected by first run production of floor samples for Passport, a new product assortment launching in November. First run production and strong orders from the U.S. State Department also resulted in production and shipping delays." Mr. Kathwari added, "Going into the second quarter, our retail division backlog is up 11.6% and the wholesale backlog is up 61.6% from June 30, 2017. We are well positioned to clear up these high backlogs during the second quarter."
The Company expects to report consolidated net sales of $181.3 million for the first quarter, wholesale net sales of $111.6 million, and retail net sales of $141.6 million. The Company expects a gross margin of 55.3% for the first quarter, an adjusted operating margin of approximately 6.8%, and an adjusted EPS in the range of $0.27 to $0.28. The Company estimates that the hurricanes and first run production of new products disrupted consolidated net sales by approximately 7% to 8%, brought down gross margin from 56.0% to 55.3%, and reduced adjusted EPS by $0.14 to $0.15.
The Company will release its first quarter fiscal 2018 financial results after the market closes on Wednesday, October 25, 2017, and will host an analyst conference call to discuss the Company's business and financial highlights that afternoon at 5:00 PM ET. This call will be webcast from the "Events and Presentations" page at http://www.ethanallen.com/investors. To access the conference call, dial 844-822-0103 (or 614-999-9166 for international callers), and enter conference ID 50728592. For those unable to listen live, the call will be archived on the company's website for at least 60 days.
About Ethan Allen
Ethan Allen Interiors Inc. (NYSE: ETH) is a leading interior design company and manufacturer and retailer of quality home furnishings. The company offers complimentary interior design service to its clients and sells a full range of furniture products and decorative accessories through ethanallen.com and a network of approximately 300 Design Centers in the United States and abroad. Ethan Allen owns and operates nine manufacturing facilities including six manufacturing plants and one sawmill in the United States plus one plant each in Mexico and Honduras. Approximately seventy-five percent of its products are made in its North American plants. For more information on Ethan Allen's products and services, visit www.ethanallen.com.
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This press release and any related webcasts, conference calls, and other related discussions should also be read in conjunction with the Company's Annual Report on Form 10-K for the year ended June 30, 2017 (the "2017 Form 10-K") and other reports filed with the Securities and Exchange Commission.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which represent our management's beliefs and assumptions concerning future events based on information currently available to us relating to our future results. Such forward-looking statements are identified in this press release and in documents incorporated herein by reference by use of forward-looking words such as "anticipate", "believe", "plan", "estimate", "expect", "intend", "will", "may", "continue", "project", "target", "outlook", "forecast", "guidance", and similar expressions and the negatives of such forward-looking words. These forward-looking statements are subject to management decisions and various assumptions about future events, and are not guarantees of future performance. A number of risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements, including, but not limited to: changes in global or regional political or economic conditions, including changes in governmental and central bank policies; our ability to secure debt or other forms of financing; the effect of operating losses on our ability to pay cash dividends; changes in business conditions in the furniture industry, including changes in consumer spending patterns, tastes and demand for home furnishings; competition from overseas manufacturers and domestic retailers and competitive factors such as changes in products or marketing efforts of others; effects of our brand awareness and marketing programs, including changes in demand for our existing and new products; our ability to locate new design center sites and/or negotiate favorable lease terms for additional design centers or for the expansion of existing design centers; fluctuations in interest rates and the cost, availability and quality of raw materials; pricing pressures; the effects of labor strikes; weather conditions that may affect sales; volatility in fuel, utility, transportation and security costs; the potential effects of natural disasters affecting our suppliers or trading partners; the effects of terrorist attacks or conflicts or wars involving the United States or its allies or trading partners; and those matters discussed in "Item 1A - Risk Factors" of our 2017 Form 10-K and elsewhere in this press release and our SEC filings. Accordingly, actual circumstances and results could differ materially from those contemplated by the forward-looking statements.
Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Many of these factors are beyond our ability to control or predict. Our forward-looking statements speak only as of the date of this press release. Other than as required by law, we undertake no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.