GO
Loading...

Ethan Allen Sees Third Quarter Profit Below Analysts' Forecasts

Reuters
Tuesday, 27 Mar 2007 | 10:03 AM ET

Furniture maker and retailer Ethan Allen Interiorsforecast quarterly earnings below analysts' expectations on Monday, citing a challenging economic environment for home furnishings retail.

The company said it expects earnings of 53 cents to 56 cents a share for its third quarter ended March 31, compared with 59 cents in the prior-year quarter.

Analysts, on average, expect 59 cents a share, excluding exceptional items, according to Reuters Estimates.

Ethan Allen said in a statement its sales rose 15.5% in the year-earlier quarter, making comparisons difficult.

Furniture makers have pared profit forecasts, cut jobs and announced plant closures as slowing home sales and higher year-over-year borrowing costs led consumers to pull back from big-ticket purchases over the past year.

Earlier this month, Furniture Brands International , whose brands include Thomasville and Broyhill, cut its outlook for the current quarter, saying sales could fall nearly 15%.

At the High Point Market home furnishings show, which opened on Monday in North Carolina, other furniture executives said they expect sales to improve eventually as the U.S. housing market strengthens, but not in the near term.

"The market is challenging right now," Kurt Darrow, chief executive of La-Z-Boy, told Reuters. "The consumer has to feel very good about her prospects for the future, about employment, about income, about interest rates ... because we definitely have a product that is postpone-able."

La-Z-Boy said this month it would cut 500 jobs as it closes two upholstery plants and consolidates other facilities in a restructuring expected to save $11 million in costs per year.

"This will make us more cost-effective and competitive," Darrow said.

In December, Stanley Furnituresaid it would cut 200 of 450 jobs at its plant in Robbinsville, North Carolina, one of its four U.S. wood furniture plants.

Chairman and CEO Jeff Scheffer said Stanley chose to cut jobs in Robbinsville, a tight labor market, to align its production with demand.

"As business comes back, we would expect to resume hiring," Scheffer added in an interview at his company's High Point showroom.

  Price   Change %Change
ETH
---
FBNIQ
---
LZB
---
STLY
---

Featured

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video