Ethan Allen Profit Up 13%

The locally based firm said profits climbed to $26.2 million, or 77 cents per share, in the second quarter ending Dec. 31, 2005, rising from $23.1 million, or 63 cents per share, from the same period a year earlier. Revenue for the quarter also rose 13% to $276 million from $245.3 million a year earlier. Analysts had expected Ethan Allen to report earnings of 64 cents per share on sales of $258.9 million,

The company said its "Mission Possible" plan to reduce delivery time to customers was responsible for much of the second quarter gains, adding that the plan allowed the firm to substantially reduce delivery and backlog times and increase shipments on orders that would have otherwise been delivered in the third quarter.

"We are very pleased with our results for the quarter," Farooq Kathwari, the company's chairman and chief executive officer said in a statement announcing the results. He said structural changes made to the company during the last three years, including initiatives to enhance product offerings and increased marketing efforts helped increase sales more than 12%, pushed up per share earnings by 22% and increased operating income 21%. Kathwari said the company also generated $20 million in operating cash during the period.

The company, which operates 313 retail stores in the United States and abroad, also offered a profit outlook for its third quarter which put per-share growth at 8% to 12% compared to last year's 50 cents per-share earnings. That estimate is 2 cents to 3 cents below the 59 cents expected by analysts for the period. Analysts also pegged Ethan Allen's fourth quarter earnings at 63 cents per share, an estimate that the company said was "within reach."