Tonight, Ethan Allen (ETH) reported Q1 10 results that missed Wall Street estimates by a wide margin. ETH reported Q1 10 revenue of $136.2 million, missing top-line estimates by 10%. In addition, ETH reported a loss per share of $0.20 (excluding one-time charges), which was well below the consensus estimate of ($0.08). Given the Street was expecting FY 10 revenue and EPS of $602 million and $0.21, respectively, we believe estimates will coming down significantly in the coming days.
Based upon continued sequential deterioration in Q1 revenue, we are now projecting FY 10 revenue of $573 (versus $600 million previously). Gross margin has shown slight sequential improvement, so our new estimate assumes margin increases from 49.1% in Q1 to a full year margin of 51.0% (as cost savings kick in). On the operating expense line, we are assuming SG&A bottomed at $73.6 million per quarter. Annualizing this rate gives us operating expenses of $294.4 million. Leaving our net interest and tax estimates alone, we estimate the Company will report a loss of $6.2 million in FY 09 (translating to an EPS of negative $0.21).
Via Short Stock Ideas from Seeking Alpha:
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