GO
Loading...

A Play on Retail—and Housing

Thursday, 29 Jul 2010 | 7:26 PM ET

A company like Ethan Allen Interiors, seller of high-end furniture and home accessories, wouldn’t boost its guidance if the housing and retail markets weren’t turning. But that’s just what the company did on July 20.

  • Cramer's Top 6 Comeback Stocks for 2010
Retail's Rebound?
Cramer gets a read on retail to see how this sector is faring, with Farooq Kathwari, Ethan Allen chairman/president/CEO.

Despite banks like Wells Fargo telling us that there is pent up demand for the homes they own, as well as an improvement in pricing, the press has balked at talk of a recovery. The Fourth Estate also seems to disregard the lowest mortgage rates since the 1950s, and it has all but declared consumer confidence D.O.A. because of high unemployment.

Still, Ethan Allen upped the outlook for its fiscal fourth quarter, which it will report on Aug. 5, to 14 cents to 16 cents per share, higher than the 13 cents that Wall Street is expecting. Also, sales should rise 18% and booked orders jump 23% compared to the year before.

Given that, Cramer thinks this could be buying opportunity in ETH. The stock has fallen to about $15 from its high of the year, $25.19 on April 26, a trend sparked by an earnings miss reported on April 28. But while the share price is down, Cramer said, the company’s prospects are looking up. And maybe they will take the stock back up with them.

That’s why he wanted to check in with Chairman and CEO Farooq Kathwari. What’s in store for the rest of the year? 2011? Watch the video to find out.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com

  Price   Change %Change
ETH
---
WFC
---

Contact Mad Money

  • Showtimes

    Monday - Friday 6p ET
  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

Mad Money Features

  • Grab the latest CNBC gear from the NBCUniversal Store!

  • Get a behind-the-scenes look at how Cramer formulates his investment advice. "Inside the Madness" is a column, which features e-mails and more with Cramer and his researcher Nicole Urken.

  • You’ve always wanted to hit the “Hallelujah!” button. Here’s your chance.