Ethan Allen(US:ETD)2022-04-29 00:10Financial Data and Key Metrics Changes - Sales reached $197.7 million, an increase of 11.7% from the previous year quarter [7] - Gross margins improved to 60.4% from 57.3% in the previous year quarter [7] - Adjusted operating income rose to $31.3 million, a 59.9% increase [7] - Adjusted EPS increased by 60.3% to $0.93 from the previous year quarter [7] - Operating margin increased from 10.7% to 16.5% [12] Business Line Data and Key Metrics Changes - Retail orders decreased by 3% compared to a strong prior year but were up 18.2% compared to pre-pandemic fiscal 2019 [9] - Wholesale segment orders were down 0.2% year-over-year but up 8.4% compared to the third quarter of 2019 [9] - Order backlogs were approximately 25% higher than a year ago [10] Market Data and Key Metrics Changes - The company experienced strong demand despite ongoing supply chain disruptions affecting imports and raw material availability [8] - Delivery lead times remained higher than historical averages due to COVID-19 absenteeism and raw material constraints [10] Company Strategy and Development Direction - Focus on talent development and promoting key associates across various divisions [18] - Emphasis on improving service capabilities and reducing delivery times, with upholstery products now shipping in 7 to 9 weeks [19] - Continued investment in technology and manufacturing to enhance production efficiency [21][24] - Expansion of retail design centers with a focus on smaller sizes and excellent locations [25] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious consumer sentiment but believes the company is well-positioned in terms of quality, pricing, and service [29] - Backlogs are at decent levels, and production has increased, allowing for improved shipments and deliveries [30] - Anticipated gross margins to return to approximately 58% in the near term due to input costs [31][32] Other Important Information - The company ended the quarter with cash and investments of $104.6 million and no debt [13] - Capital expenditures were $5.3 million, primarily for manufacturing expansion and technology investments [14] - The Board declared a quarterly cash dividend of $0.32 per share, a 10% increase from the previous dividend [15] Q&A Session Summary Question: Business cadence and recent performance - Management acknowledged a cautious consumer sentiment but expects to maintain momentum despite a potential slowdown [29] Question: Current backlog and revenue opportunities - Backlogs are up 22% to 23% compared to the previous year, and management is focused on reducing backlog while improving delivery times [30] Question: Cost inflation and price increases - Management indicated that imported products have seen price increases of 20% to 25%, while North American products have increased by 10% to 12% [35][36] Question: Marketing efficiency and spending - Marketing expenditures were reduced to 2.3% of sales, with a focus on digital mediums to improve efficiency [43][44] Question: New product introductions - The company introduced a new flooring product, which has been well received, and is seen as an addition to existing product lines [46]