Ethan Allen Interiors Inc. (NYSE: ETH)
reported second-quarter adjusted EPS of 46 cents Monday, in-line with consensus estimates. The company is taking initiatives to
drive the top line, but it is up against a highly competitive market at home, and its international sales have slowed, according to
KeyBanc Capital Markets.
The Analyst
Analyst Bradley Thomas maintains a Sector Weight rating on Ethan Allen
Interiors.
The Thesis
Ethan Allen’s quarterly results reflect a decline in underlying trends, Thomas said in a Monday note.
While international sales softened, the State Department orders that were delivered during the quarter involved highly
competitive bids, the analyst said.
Comparative net sales grew 2.7 percent, but written comps declined by a meaningful 4.2 percent, Thomas said. The company’s
operating margin contracted 35 basis points to 8.33 percent, partly due to the competitive bids for the State Department
orders, he said.
The furniture retailer expressed optimism regarding top-line growth
going forward given its recently completed product refreshes, the analyst said. Ethan Allen has invested in its digital
capabilities and introduced new merchandise for a younger target audience, he said.
Ethan Allen is poised to benefit from recent Amazon.com, Inc. (NASDAQ: AMZN) and Walt Disney Co (NYSE: DIS) launches as well as from a ramp up in State Department orders, Thomas
mentioned. The analyst added that further traction needs to be seen “before getting more positive on the shares.”M<
Price Action
Ethan Allen shares were slipping 6.35 percent to $17.56 at the time of publication Tuesday.
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Latest Ratings for ETH
Date |
Firm |
Action |
From |
To |
Jan 2019 |
Dougherty |
Downgrades |
Buy |
Neutral |
Oct 2018 |
Raymond James |
Downgrades |
Strong Buy |
Outperform |
Jan 2018 |
Stifel Nicolaus |
Maintains |
Hold |
Hold |
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ETH
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