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Ethan Allen Interiors Inc. (ETD - Free Report) is defying expectations as consumers continue to buy furniture. This Zacks Rank #1 (Strong Buy) is dirt cheap, with a single digit P/E.
Ethan Allens Interiors is a home furnishings retailer which sells a full range of home furnishings through a retail network of design centers across the United States and abroad as well as online at ethanallen.com. It's been in business for 90 years.
The company owns 10 manufacturing facilities in the United States, Mexico and Honduras, including one sawmill, one rough mill and a lumberyard. Approximately 75% of its products are made, or assembled, in those North American facilities.
Another Beat in the Fiscal First Quarter 2023
On Oct 26, Ethan Allen reported its fiscal first quarter 2023 results and beat the Zacks Consensus, reporting $1.11 versus the Consensus of just $0.79.
It was the 13th consecutive earnings beat in a row. Ethan Allen has only missed once in the last 5 years and it was in 2019, before the coronavirus pandemic hit.
Sales rose 17.7% to $214.5 million thanks to a higher backlog of orders.
Retail net sales were up 18.5% to $183.7 million while wholesale net sales rose 4.8% to $114.7 million.
The orders cooled off from the pandemic mania of last year, with retail written orders falling 8.6% compared with last year and wholesale declining 7.2%. But compared with the first quarter of fiscal 2020, the last pre-pandemic first quarter, written orders were up 7.4% and wholesale were down 0.1%.
Many are watching the inventory levels at retailers. Ethan Allen's inventories net decreased to $167.7 million as of Sep 30, 2022, compared with $176.5 million as of June 30, 2022 as the company restored its operating inventory levels to more historical norms as backlog declines.
Special Dividend and No Debt
Ethan Allen is proud of its dedication to its shareholders. It saw strong operating cash flow of $38.4 million during the quarter and returned $20.9 million to shareholders through cash dividends.
It not only paid its standard quarterly dividend, which is currently yielding 4.5%, it also paid a $0.50 special dividend in Aug 2022.
Ethan Allen also had no debt outstanding as of Sep 30, 2022.
Analysts Raise Full Year Estimates
Despite an uncertain economic environment, and fear of a recession, which will certainly hit furniture retailers, the analysts had apparently gotten too bearish on Ethan Allen.
2 estimates were raised for both fiscal 2023 and 2024 in the last 30 days. None were cut.
The Fiscal 2023 Zacks Consensus Estimate has jumped to $3.54 from $2.95 in the last 30 days. However, that's an earnings decline from last year of 9.9% as Ethan Allen made $3.93.
But analysts also raised fiscal 2024 to $3.00 from $2.70 in the last month.
While furniture orders may finally be slowing, the analysts were just too pessimistic.
Shares Stage a Mini-Rally
Ethan Allen shares are actually higher on the year, up 9.2%, but that's only thanks to the latest 1-month rally, which saw shares up 28.7%.
The Street has not favored Ethan Allen despite its big dividend. Shares are up just 0.4% over the last 5 years compared to the S&P 500 up 50.8% over the same time period.
Image Source: Zacks Investment Research
Shares are still cheap, with a forward P/E of 8.
For investors looking for a retailer with no debt, a dividend, and where the shares are cheap, Ethan Allen should be on the short list.
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Bull of the Day: Ethan Allen (ETD)
Ethan Allen Interiors Inc. (ETD - Free Report) is defying expectations as consumers continue to buy furniture. This Zacks Rank #1 (Strong Buy) is dirt cheap, with a single digit P/E.
Ethan Allens Interiors is a home furnishings retailer which sells a full range of home furnishings through a retail network of design centers across the United States and abroad as well as online at ethanallen.com. It's been in business for 90 years.
The company owns 10 manufacturing facilities in the United States, Mexico and Honduras, including one sawmill, one rough mill and a lumberyard. Approximately 75% of its products are made, or assembled, in those North American facilities.
Another Beat in the Fiscal First Quarter 2023
On Oct 26, Ethan Allen reported its fiscal first quarter 2023 results and beat the Zacks Consensus, reporting $1.11 versus the Consensus of just $0.79.
It was the 13th consecutive earnings beat in a row. Ethan Allen has only missed once in the last 5 years and it was in 2019, before the coronavirus pandemic hit.
Sales rose 17.7% to $214.5 million thanks to a higher backlog of orders.
Retail net sales were up 18.5% to $183.7 million while wholesale net sales rose 4.8% to $114.7 million.
The orders cooled off from the pandemic mania of last year, with retail written orders falling 8.6% compared with last year and wholesale declining 7.2%. But compared with the first quarter of fiscal 2020, the last pre-pandemic first quarter, written orders were up 7.4% and wholesale were down 0.1%.
Many are watching the inventory levels at retailers. Ethan Allen's inventories net decreased to $167.7 million as of Sep 30, 2022, compared with $176.5 million as of June 30, 2022 as the company restored its operating inventory levels to more historical norms as backlog declines.
Special Dividend and No Debt
Ethan Allen is proud of its dedication to its shareholders. It saw strong operating cash flow of $38.4 million during the quarter and returned $20.9 million to shareholders through cash dividends.
It not only paid its standard quarterly dividend, which is currently yielding 4.5%, it also paid a $0.50 special dividend in Aug 2022.
Ethan Allen also had no debt outstanding as of Sep 30, 2022.
Analysts Raise Full Year Estimates
Despite an uncertain economic environment, and fear of a recession, which will certainly hit furniture retailers, the analysts had apparently gotten too bearish on Ethan Allen.
2 estimates were raised for both fiscal 2023 and 2024 in the last 30 days. None were cut.
The Fiscal 2023 Zacks Consensus Estimate has jumped to $3.54 from $2.95 in the last 30 days. However, that's an earnings decline from last year of 9.9% as Ethan Allen made $3.93.
But analysts also raised fiscal 2024 to $3.00 from $2.70 in the last month.
While furniture orders may finally be slowing, the analysts were just too pessimistic.
Shares Stage a Mini-Rally
Ethan Allen shares are actually higher on the year, up 9.2%, but that's only thanks to the latest 1-month rally, which saw shares up 28.7%.
The Street has not favored Ethan Allen despite its big dividend. Shares are up just 0.4% over the last 5 years compared to the S&P 500 up 50.8% over the same time period.
Image Source: Zacks Investment Research
Shares are still cheap, with a forward P/E of 8.
For investors looking for a retailer with no debt, a dividend, and where the shares are cheap, Ethan Allen should be on the short list.