By
Tolu Ajiboye
December 31st, 2023
Ethan Allen Interiors (ETH) shares rose by 0.90% on Monday and surged further by 13.44% reaching the $17.73 level.
Furniture maker Ethan Allen Interiors Inc (NYSE: ETH) saw its shares close higher on Monday following the release of the preliminary financial results from the retailer. According to the company’s release on Monday, the company said that its retail sales saw a 10.8% year on year growth.
ETH shares which have been plunged down by about 18% this year due to the COVID-19 are now resurging as Farooq Kathwari, Ethan Allen’s Chairman and CEO said that the company’s performance is gradually returning back to the pre-COVID-19 levels. The CEO also noted that the impressive performance from the firm in its Q1 ended September 30 is perhaps as a result of the company’s strong business ideals.
Ethan Allen reported a consolidated net sales of $151.1 million to complement the earlier noted growth in retail sales. The company’s performance in its wholesale segment declined by about 0.4%. The company attributed this dip to the timing of the GSA and other government-imposed restrictions as necessitated by the COVID-19 pandemic.
Ethan Allen shareholders will also take home a profit as against general expectations of a dip in earnings per share. The adjusted diluted Earnings Per Share settles in the range of $0.34 to $0.36 and the firm hit a gross margin of 56.8%.
The profitability of Ethan Allen (ETH) somewhat sent a strong buy signal making investors go all-out bullish on its shares. ETH shares rose by 0.90% on Monday and surged further by 13.44% as at the time of writing and the value of the shares comes at $17.73 in the pre-market.
ETH Shares Model Other Company’s Performance
The growth in the shares of Ethan Allen models other company’s performance at the time of announcement of a profitable earning as seen in the case of Nike Inc (NYSE: NKE). Ethan Allen’s growth in its Q1 2020 however comes with several impressive highlights, including clearing off all outstanding debts to the tune of $50 million and ending the quarter with enough liquidity to aid operational needs for the coming quarters.
Just like the earlier cited retailer Nike, Ethan Allen said that the company produces almost 75% of what they sell giving them more hold on the profitability and also let the company control inventory to compliment sales.
Kathwari said:
“Our unique vertical structure, whereby we produce about 75% of what we sell, mostly on a custom made-to-order basis in our own North American manufacturing plants, allows us to maintain stronger service levels with greater control over inventory.”
With the company’s outfit in the past quarter despite the COVID-19, the retailer might just have positioned itself to erode the 18% down plunge it has seen in its shares before the end of the year.
Despite these earnings overview, Ethan Allen also said that it will be releasing its financial and operating results for the fiscal 2021 first quarter ended September 30, 2020, after the close of the market on Thursday, October 29, 2020.