Ethan Allen Interiors Earnings Preview

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After beating estimates last quarter by $0.07, Ethan Allen Interiors (NYS: ETH) has set the standard for itself. The company will unveil its latest earnings on Tuesday. 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 five of six analysts rating it hold. While analysts still rate the stock a hold, they are a little more optimistic about it compared to three months ago.
  • Revenue forecasts: On average, analysts predict $191.4 million in revenue this quarter. That would represent a rise of 10.4% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.27 per share. Estimates range from $0.22 to $0.31.

What our community says:
The majority of CAPS All-Stars see Ethan Allen as a good bet, with 56.8% assigning it an outperform rating. The community is divided on the stock with 54.2% Fools giving it an outperform rating and 45.8% an underperform rating. Fools are bullish on 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 boosted its gross margin by three percentage points in the last quarter. Revenue rose 12.2% while cost of sales rose 5.5% to $87 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

Q1

Q4

Q3

Q2

Gross Margin

52.9%

52.9%

51%

51.8%

Operating Margin

7.4%

6.4%

2.9%

6.0%

Net Margin

3.7%

4.0%

2.2%

8.5%

For all our Ethan Allen Interiors-specific analysis, including earnings and beyond, add Ethan Allen Interiors to My Watchlist.

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Earnings estimates provided by Zacks.

At the time this article was published

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