Furniture Companies
Shares of Furniture Companies Decline After Ethan Allen Follows Trend, Reduces Outlook
Shares of home furniture makers declined Monday, after Ethan Allen Interiors Inc. followed two rivals in cutting its quarterly revenue forecast, citing an industry-wide slowdown in demand.
Ethan Allen Interiors Inc. said it a slowdown in sales for big ticket items and ongoing restructuring will dampen sales in its first quarter ending Sept. 30. The company forecast quarterly sales of $240 million to $245 million, down from its prior view of $264 million to $269 million in sales, and missing Wall Street’s target of $263.8 million, according to Thomson Financial.
Shares of the company tumbled $2.14, or 5.8 percent, to $34.58 in midday trading on the New York Stock Exchange. Over the past 52 weeks, the stock has traded between $28.50 and $45.43.
Raymond James analyst Budd Bugatch in a client note reaffirmed a “Strong Buy” rating on Ethan Allen shares but lowered his target price to $45 from $50. He acknowledged a slowdown in residential furniture sales, but said the Federal Reserve’s decision to hold interest rates steady last week keeps him somewhat positive on prospects.
In addition, Bugatch believes concerns over slower summer sales are already reflected in Ethan Allen’s share price.
Shares of rival Stanley Furniture Co. bucked the trend to rise 20 cents to $21.35 on the Nasdaq, two weeks after its own slashed third-quarter and full-year forecast caused shares to decline 4 percent.
At that time, Stanley blamed weaker-than-expected sales, and said the slowdown is expected to last through 2006.
Shares of Furniture Brands International Inc., which on Sept 6 cut its third-quarter profit forecast, lost 12 cents to $19.07 on the Big Board. The company’s brands include Broyhill, Lane and Thomsaville.
Hooker Furniture Corp. shares declined 4 cents to $14.70 on the Nasdaq. The company in June announced plans to close a plant because of declining U.S. demand for its furniture. Hooker at that time said demand has been shifting toward cheaper imports.
