Back to top

Image: Bigstock

Ethan Allen (ETH) to Report Q3 Earnings: What's in Store?

Read MoreHide Full Article

Ethan Allen Interiors Inc. (ETH - Free Report) is scheduled to report third quarter of fiscal 2021 results on Apr 29, after the closing bell.

In the last reported quarter, the company’s top and bottom lines matched the Zacks Consensus Estimate but improved 2.4% and 155.6% year over year, respectively. Its earnings surpassed the consensus mark in three of the trailing six quarters.

Trend in Estimate Revision

The Zacks Consensus Estimate for Ethan Allen’s fiscal third-quarter earnings is pegged at 58 cents per share, implying significant growth of 2,800% on a year-over-year basis. The consensus estimate for revenues is $177 million, indicating an 18.2% year-over-year increase.

Ethan Allen Interiors Inc. Price and EPS Surprise

Ethan Allen Interiors Inc. Price and EPS Surprise

Ethan Allen Interiors Inc. price-eps-surprise | Ethan Allen Interiors Inc. Quote

Factors to Note

Ethan Allen’s interior designing business is likely to generate improved results for the fiscal third quarter backed by favourable market conditions post the easing of COVID-19 disruptions. The company has been witnessing strong pace of written orders. Also, its manufacturing facilities have been ramping up production to meet demand after temporary plant closures in fourth quarter of fiscal 2020.

Notably, its self-operated design centers and North American retail network have witnessed significant growth in recent times. Also, the e-commerce business is expected to have provided some support to the top line. Moreover, a resilient housing market scenario, and solid repair & remodeling activities are expected to have benefited the company’s performance in the fiscal third quarter.

However, Ethan Allen believes that it will take the next few quarters to catch up to the increase in customer demand.

A Glimpse of Fiscal Third-Quarter Preliminary Results

During the fiscal third quarter, the company recorded a 51.8% year-over-year increase in written orders in the retail division, including ecommerce. The same metric grew 39% in the Wholesale segment. Excluding General Services Administration and other government orders, wholesale segment orders grew 48.3% from the prior-year quarter. Net delivered sales of $177 million also increased 18.2% year over year.

Its projects adjusted earnings within 56-58 cents per share, indicating a massive improvement from 2 cents a year ago. The potential growth in the bottom line is expected to have been primarily backed by solid cost-containment measures.

Zacks Projections

The Zacks Consensus Estimate for Retail segment sales is pegged at $131 million, implying an improvement of 12.9% from the year-ago period. The same for Wholesale segment sales is pegged at $108 million, suggesting 16.1% year-over-year growth.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Ethan Allen this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, it sports a Zacks Rank #1 and an Earnings ESP of 0.00%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some companies in the Zacks Retail - Home Furnishings industry, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Williams-Sonoma, Inc. (WSM - Free Report) has an Earnings ESP of +2.89% and sports a Zacks Rank #1.

Dillard's, Inc. (DDS - Free Report) has an Earnings ESP of +6.49% and sports a Zacks Rank #1.

Lowe's Companies, Inc. (LOW - Free Report) has an Earnings ESP of +2.25% and a Zacks Rank #2.

Time to Invest in Legal Marijuana

If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.

After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%.

You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.

Today, Download Marijuana Moneymakers FREE >>