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Ethan Allen (ETH) to Report Q4 Earnings: What to Expect

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Ethan Allen Interiors Inc. is slated to report fourth-quarter fiscal 2021 (ended Jun 30, 2021) results on Aug 9, after the closing bell.

In the last reported quarter, the company’s earnings matched the Zacks Consensus Estimate but improved 29 times from the prior-year figure of 2 cents per share. Its earnings surpassed the consensus mark in three of the trailing six quarters. Revenues for the fiscal third quarter marginally lagged the consensus mark but rose 18.2% year over year. The upside was backed by solid offerings, strong network of retail design centers and focus on technology-based interior design services.

Trend in Estimate Revision

The Zacks Consensus Estimate for Ethan Allen’s fiscal fourth-quarter earnings is pegged at 74 cents per share, implying significant growth of 593.3% on a year-over-year basis. The consensus estimate for revenues is $178.3 million, indicating a 94.7% 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 come up with improved results for the fiscal fourth quarter backed by favourable market conditions, strong brand presence and robust demand. The company has been witnessing a strong pace of written orders in both Retail and Wholesale segments. Also, its manufacturing facilities have been ramping up production to meet high order backlogs.

Additionally, its self-operated design centers and North American retail network have been witnessing significant growth in recent times. Also, focus on technology-based interior design services is expected to have boosted the top line. Further, a resilient housing market scenario, solid repair & remodeling activities, strong logistics network as well as retail home delivery centers are expected to have benefited the company’s fiscal fourth-quarter performance.

Yet, Ethan Allen has been witnessing raw material shortages and increased shipping cost. Also, macroeconomic uncertainty and supply chain disruption are likely to put pressure on fiscal fourth-quarter results.

A Glimpse of Q4 Preliminary Results

The company recorded a 105% year-over-year increase in written orders in the retail division, marking a record high order backlog at quarter-end. Orders grew 82.3% in the Wholesale segment. Excluding General Services Administration or GSA and other government orders, the segment orders increased 87% from the prior year. Net sales of $178.3 million increased an impressive 94.7% year over year. Net sales in the Wholesale segment totaled $106.4 million, which increased 106.2% from the prior-year quarter. Retail net sales of $150.7 million rose 113% from the year-ago quarter.

Company Projections

Its projects adjusted earnings within 72-74 cents per share, indicating a massive improvement from a loss of 15 cents in the prior year. The potential growth in the bottom line is expected to have been primarily backed by solid demand for its product offerings and design services as well as cost-containment measures.

Meanwhile, the company expects cash on hand of $104.6 million and no debt outstanding for the fiscal fourth quarter.

Zacks Projections

The Zacks Consensus Estimate for Retail segment sales is pegged at $151 million, implying an improvement of 112.7% from the year-ago period. The same for Wholesale segment sales is pegged at $106 million, suggesting 103.8% 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 carries a Zacks Rank #2 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-Wholesale sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Chuy's Holdings, Inc. (CHUY - Free Report) has an Earnings ESP of +3.99% and a Zacks Rank #3.

Brinker International, Inc. (EAT - Free Report) has an Earnings ESP of +8.54% and a Zacks Rank #2.

Ruth's Hospitality Group, Inc. (RUTH - Free Report) has an Earnings ESP of +33.33% and a Zacks Rank #2.

In-Depth Zacks Research for the Tickers Above

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Brinker International, Inc. (EAT) - free report >>

Ruth's Hospitality Group, Inc. (RUTH) - free report >>

Chuy's Holdings, Inc. (CHUY) - free report >>