Ethan Allen Interiors Earnings Preview

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Ethan Allen Interiors (NYS: ETH) came in right in line with the Street's expectations last quarter, but investors are hoping that it will beat them this quarter. The company will unveil its latest earnings on Monday, Oct. 24. Ethan Allen Interiors is a manufacturer and retailer of quality home furnishings and accessories, offering a full complement of home decorating and design solutions through one of the country's largest home-furnishing retail networks.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Ethan Allen Interiors, with four of five analysts rating it hold. That rating hasn't budged in three months as analysts have remained unchanged in their opinion of the stock.
  • Revenue forecasts: On average, analysts predict $179.8 million in revenue this quarter. That would represent a rise of 9.1% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.18 per share. Estimates range from $0.15 to $0.23.

What our community says:
The majority of CAPS All-Stars see ETH as a good bet, with 55.9% awarding it an outperform rating. The community is divided on the stock, with 54.8% of Fools giving it an outperform rating and 45.2% an underperform rating. Fools have embraced Ethan Allen Interiors, though the message boards have been quiet lately, with only 76 posts in the past 30 days. Ethan Allen Interiors' bearish CAPS rating of two out of five stars falls short of the Fool community sentiment.

Management:
Revenue has now gone up for three straight quarters. The company raised its gross margin by 3.4 percentage points in the last quarter. Revenue rose 9% while cost of sales rose 1.7% to $83.8 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q4

Q3

Q2

Q1

Gross Margin

52.9%

51%

51.8%

50%

Operating Margin

6.4%

2.9%

6%

3.3%

Net Margin

4%

2.2%

8.5%

2.3%

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At the time this article was published

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