Ethan Allen Interiors, Inc. isn't feeling the optimism in 2017. This Zacks Rank #5 (Strong Sell) recently warned on its fiscal second quarter results.
Ethan Allen operates 300 Design Centers in the United States and abroad that sell home furnishings. It also operates 9 manufacturing facilities including 6 manufacturing plans and 1 sawmill in the United States and one plant each in Mexico and Honduras.
About 70% of its products are made in its North American plants.
A Challenging Retail Environment
On Jan 11, Ethan Allen commented on its results for the fiscal second quarter.
It described the second quarter retail environment, which ended Dec 31, as "challenging".
Written retail orders fell 3.6% compared to a record increase of 15.3% in the year ago quarter. Delivered sales fell 6.2% as well.
As a result, its adjusted operating income is projected to be about 8.8% of sales compared to 12.2% of sales in the prior year's quarter.
Earnings per share are also expected in the range of $0.38 to $0.39.
That was well under the Zacks Consensus Estimate of $0.59. It made $0.55 in the year ago quarter.
Estimates Cut for the Quarter, Fiscal 2017 and Fiscal 2018
As a result, the analysts cut estimates across the board.
Given the new guidance, the second quarter estimates were cut to $0.38, which is the low end of the company's new guidance.
Full year fiscal 2017 was also dut to $1.92 from $2.05. That means flat earnings growth compared with last year.
But even fiscal 2018 estimates were cut. The Zacks Consensus Estimate is now $2.20, down from $2.33 just 7 days ago.
Ethan Allen said they are freshening their offerings and increasing their marketing in both digital and traditional mediums in the third quarter.
Shares Sink
Not surprisingly, the shares sold off on the news.
But are they a bargain?
Ethan Allen is still trading with a forward P/E of 16.6. And it's not even at its 52-week low.
If you really must buy a home furnishing company right now, check out Pier 1 Imports Inc. . It's the only company in this group to have a Zacks Rank of #1 (Strong Buy).
Long-Term Buys You Won't See in the News
To end on a positive note, you're invited to see the best long-term trades Zacks Research is uncovering today. These moves have double and triple-digit profit potential and are rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>
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Bear of the Day: Ethan Allen (ETH)
Ethan Allen Interiors, Inc. isn't feeling the optimism in 2017. This Zacks Rank #5 (Strong Sell) recently warned on its fiscal second quarter results.
Ethan Allen operates 300 Design Centers in the United States and abroad that sell home furnishings. It also operates 9 manufacturing facilities including 6 manufacturing plans and 1 sawmill in the United States and one plant each in Mexico and Honduras.
About 70% of its products are made in its North American plants.
A Challenging Retail Environment
On Jan 11, Ethan Allen commented on its results for the fiscal second quarter.
It described the second quarter retail environment, which ended Dec 31, as "challenging".
Written retail orders fell 3.6% compared to a record increase of 15.3% in the year ago quarter. Delivered sales fell 6.2% as well.
As a result, its adjusted operating income is projected to be about 8.8% of sales compared to 12.2% of sales in the prior year's quarter.
Earnings per share are also expected in the range of $0.38 to $0.39.
That was well under the Zacks Consensus Estimate of $0.59. It made $0.55 in the year ago quarter.
Estimates Cut for the Quarter, Fiscal 2017 and Fiscal 2018
As a result, the analysts cut estimates across the board.
Given the new guidance, the second quarter estimates were cut to $0.38, which is the low end of the company's new guidance.
Full year fiscal 2017 was also dut to $1.92 from $2.05. That means flat earnings growth compared with last year.
But even fiscal 2018 estimates were cut. The Zacks Consensus Estimate is now $2.20, down from $2.33 just 7 days ago.
Ethan Allen said they are freshening their offerings and increasing their marketing in both digital and traditional mediums in the third quarter.
Shares Sink
Not surprisingly, the shares sold off on the news.
But are they a bargain?
Ethan Allen is still trading with a forward P/E of 16.6. And it's not even at its 52-week low.
If you really must buy a home furnishing company right now, check out Pier 1 Imports Inc. . It's the only company in this group to have a Zacks Rank of #1 (Strong Buy).
Long-Term Buys You Won't See in the News
To end on a positive note, you're invited to see the best long-term trades Zacks Research is uncovering today. These moves have double and triple-digit profit potential and are rarely available to the public. Starting now, you can look inside our stocks under $10, home run and value stock portfolios, plus more. Want a peek at this private information? Click here >>