Ethan Allen Interiors Inc. (NYSE:ETH) Q1 2019 Earnings Conference Call Transcript

Oct 24, 2018 • 05:00 pm ET

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Ethan Allen Interiors Inc. (NYSE:ETH) Q1 2019 Earnings Conference Call Transcript

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Q & A
Executive
Farooq Kathwari

had an impact on lowering the sales and also lowering the margins. But Corey, I mean, is this public information? What can we give?

Executive
Corey Whitely

Yeah. We don't give it out or won't get in the habit of giving it out every quarter because, Budd, it does fluctuate. But we had about $6 million in sales in the quarter.

Executive
Farooq Kathwari

You're talking of this quarter or are you talking about last year, Budd?

Analyst
Budd Bugatch

I'm talking about -- I was talking about the current quarter, Farooq, trying to understand what it is. And that competitor is now gone, right? The equipment was auctioned off last week, is that true or not?

Executive
Farooq Kathwari

Well, it was -- they sold off their name. They sold off other things. I do not know if they sold this contract or not or whether they can even sell it, most likely not. So I think that as we move forward, the chances are that -- we have four more years with this contract. That's the good news. So we have an opportunity of doing well. One of the reasons we did a very aggressively bit on it even though we didn't make much money -- we did make money, but was the fact that we wanted our products in all the diplomatic homes internationally. And that had a very positive impact because people like what we do. And they're happy that we were able to provide the Ethan Allen products and programs. So I think it looks very positive, Budd.

Analyst
Budd Bugatch

And also in the release, you gave some cautionary language about international revenues. I take it that must be China because that's where the bulk of your international stores are located. Could you give us some flavor of what's happening over there?

Executive
Farooq Kathwari

Well, there are a number of factors. First is, they are very positive about the Ethan Allen programs. They're projecting them very, very strongly. And they are, in fact, in the process of repositioning the offerings in most of their flagship stores, reflecting our newer products because, as you know, it's interesting -- I mentioned we've changed 70% of our product line. Two years back, in China, the markets were somewhat interested in more what you might say formal and traditional. Now they are much more interested in our new product lines, which are somewhat more, you might say, more towards the classic but with a modern attitude. So they are very, very eager and aggressively going to reposition the design centers.

Having said this, they've also been cautious on this whole issue of tariffs. So that has been an issue. Although from our perspective because of the fact that we make most of our products in North America, they will be less impacted. So I think overall is positive, some impact, they were cautious, they held up some orders. But as I see it, Budd, the chances are we're going to be all right and keep on building our very good business in China and in