Ethan Allen Interiors Inc. took another hit in its third quarter that ended March 31. The company had consolidated net sales of $180.5 million representing a 5.3 percent drop from the previous year when consolidated net sales increased by 10 percent.
Operating income for the most recent period was $3.9 million, compared with $16 million; adjusted operating income of $10.3 million compared to $15.5 million in the previous year when adjusted operating income increased 55 percent.
Retail net sales at the Danbury furniture maker were lower by 6.7 percent from an increase of 17.5 percent in the previous year period and comparable store sales were lower by 8.2 percent from an increase of 18.6 percent in the previous year period.
Ethan Allen also suffered significant losses in its second quarter, reported in February.
Company Chairman and CEO Farooq Kathwari blamed the results in part on “the uncertain political environment and customer expectations of higher discounting,” noting that Ethan Allen increased advertising by 21 percent during the quarter and plans to increase by the same amount in its fourth quarter.
“During this quarter, we also made a decision to reduce clearance and discontinued inventory at both our wholesale and retail segments through donation within the next three months, resulting in a pre-tax charge of $6.4 million in the quarter,” he said.
Looking ahead, Kathwari said, “We are also strengthening our distribution channels including collaboration with Amazon to be launched this summer, the recent launch of Ethan Allen/Disney offerings on disneystore.com, the U.S. State Department contract, additional important contract initiatives and increased business opportunity with our collaboration in China, where we are launching Ethan Allen/Disney this summer.”
