The Danbury, CT-based retailer said revenue also was up 12% to $272 million for the period ending June 39, up from $242.3 million in the same period last year. Sales jumped 21.8 % to $184.4 million, while wholesale sales increased 3.6 % to $178 million.

The company, which operates 306 interior design centers in the United States and abroad and 11 manufacturing facility, added five stores to its lineup during the quarter in a $4.2 million buying spree that got it two stores in both Massachusetts and Las Vegas and one in Charleston, SC.

Ethan Allen Chairman Farooq Kathwari said customer service and product selection had become important factors to consumers as gas prices and interest rates continued their upward spiral. In response to those changing economics, Ethan Allen implemented a series of initiatives last year, including the relocation of underperforming stores, quicker home delivery and increased pricing and advertising, which have helped improve the numbers

Kathwari said despite the strong performance, traffic has remained flat and written business has slowed in recent months from prior quarterly levels but the company remains on track to achieve its goal of $1 billion in sales annually.

"We remain cautiously aware of the state of the economy and the threat of further increases in interest rates and fuel prices which could have an adverse impact on consumer spending and profitability," he said. "Still, with the strategies we've recently implemented, we believe we have the opportunity to continue to grow our business."

Ethan Allen, , said it expects to see continued improvement in fiscal 2007 with per share earnings expected to grow between 10% and 12% while sales are anticipated to grow between 5% and 7%.