Ethan Allen 3Q Earnings Off

Danbury, CT, April 24, 2007--Ethan Allen Interiors reported fiscal third-quarter net earnings that were off 13 percent, hurt by a drop in wholesale sales as the home furnishings market continues to feel the effects of the slowdown in residential housing.

Net earnings for the quarter dropped to $17.5 million, or 54 cents per share, from $20 million, or 59 cents per share, in the prior-year quarter.

Revenue fell 8 percent to $246.5 million, from $267.1 million last year.

Analysts polled by Thomson Financial expected earnings of 55 cents on revenue of $256.2 million.

Sales at the company's design centers fell 0.3 percent to $167.7 million, while sales at the wholesale division, which designs and makes furnishing and distributes them to independent and company-owned centers, fell 11 percent to $171.9 million.

Same-store sales at Ethan Allen design centers fell 8.6 percent compared to the prior year quarter. Such sales are considered a key gauge of retail industry performance, because they measure growth from existing stores rather than growth from expansion.

Farooq Kathwari, company chairman and chief executive, said softness within the home furnishings retail environment is continuing. He also noted that a stronger economy and a change in the company's delivery scheduling led to a 15.5 percent increase in sales during the prior-year period, "making for very challenging year-over-year comparisons."