Net sales and gross profits for both the fourth quarter and fiscal year were down at Ethan Allen Interiors Inc., although Chairman and CEO Farooq Kathwari predicted brighter days ahead.
Net sales at the Danbury company for the three months ended June 30 were $194.9 million, a 5.2 percent decrease from the $205.7 million posted in the comparable prior year period. Gross profit for the quarter was $108.4 million compared with $115.8 million, and gross margin was 55.6 percent compared with 56.3 percent in the comparable prior year period. The primary reason for the lower gross profit was the sales decrease, the company said.
Net income for the quarter was $11.7 million, versus $16.8 million in the prior year comparable period. Adjusted net income was $11.6 million, down from $16 million.
Net sales for the fiscal year ended June 30 were $763.4 million, a decrease of 3.9 percent from the previous year’s $794.2 million.
Gross profit for the fiscal year ended June 30 was $419.7 million, compared with $442.2 million the previous fiscal year, while the gross margin was 55 percent compared with the previous fiscal year’s 55.7 percent. The reduction in net sales reduced gross profit, along with a $6.4 million third-quarter charge for write-down of inventory. Retail sales accounted for 79.1 percent of sales in the current year compared with 78.9 percent in the prior year.
“Fiscal 2017 was a ‘year of action’ where we completed many initiatives and also launched major new initiatives,” remarked Kathwari. “As we enter fiscal 2018 we are well positioned to grow with refreshed and relevant product offerings, a strong North American manufacturing, logistics and retail network, investments in technology, increased advertising and expanded marketing channels.”
Kathwari added that retail written orders in the fourth quarter were up 1.9 percent over the prior year, especially in May and June. “So far in July, written orders have continued a strong positive trend and we remain cautiously optimistic,” he said.
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