Inc. Ethan Allen Interiors reported sales of $214.5 million for its fiscal 2023 first quarter ended the third quarter of the previous year by 17.7% as of September 30.
Company management discussed future plans on the conference call held after the earnings announcement. “It’s only the beginning. Opportunity is born from crisis. We will focus on continued transitioning from a furniture store to an interior design destination,” said CEO, president, and chairman of Ethan Allen, Farooq Kathwari.
The company is concentrating on repositioning design centers in Manhattan, Chicago, San Jose, Northern Florida, and New Hampshire as well as updating current locations to be more effective as design locations. The company is also focused on adding technology to enable designers to work effectively with clients in design centers and remotely.
“Moving forward we are well-positioned to manage the challenging trends within the global economy,” said Kathwari. “As we commemorate 90 years of invention, our attention is on maintaining and strengthening our vertical integration. This includes advancing the technology used by our interior design network, launching pertinent products faster, growing our marketing, and keeping up our investment in North American manufacturing and logistics.”
Almost all of Ethan Allen’s upholstery, according to Kathwari, is produced here., with lead times of eight weeks or less. Case goods made to order in the U.S. are close to 10 to 12 weeks for delivery.
Ethan Allen intends to expand its product line-up and launch new products more quickly, according to Kathwari, who made the announcement during the conference call. The business has significantly increased its digital marketing efforts and plans to increase national TV advertising spending as part of its marketing investment strategy. The logistics, marketing, and manufacturing departments at Ethan Allen also place a high priority on technology investment.
Financial Highlights Include:
- Consolidated net sales growth of 17.7% to $214.5 million
- Retail net sales of $183.7 million increased 18.5%
- Wholesale net sales of $114.7 million increased 4.8%
- Written order trends
- Retail segment written orders increased 7.4% compared with the pre-pandemic first quarter of fiscal 2020; down 8.6% compared with the first quarter of fiscal 2022
- Wholesale segment written orders were 0.1% lower than the first quarter of fiscal 2020; declined 7.2% from a year ago
- Due to a shift in the sales mix, with the retail segment making up a larger portion, a favorable product mix, and product pricing actions taken working through delivered sales, the consolidated gross margin increased to 60.4%, up from 59.9% a year ago. and higher manufacturing productivity and efficiency
- Operating margin of 18.5%; and adjusted operating margin of 17.6% compared with 15.2% last year due to strong net sales growth, retail and wholesale gross margin expansion and controlling costs by leveraging cost reductions partially offset by higher delivery, freight and marketing costs; selling, general and administrative expenses decreased from 44.7% of net sales to 42.9%, reflecting the company’s operating leverage
- Inventory at the end of the quarter was $167.7 million, which was $8.8 million less than it was at June 30.
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Source: https://www.furnituretoday.com/financial/ethan-allen-sales-up-17-7-in-q1-showing-as-the-company-is-just-getting-started/
