Quality, style and excellent management have enabled this upscale chain to expand to more than 300 stores in the United States, Canada, Mexico and abroad. ETH owns 21 manufacturing facilities and three sawmills, a boon for quality control. Unlike many furniture retailers, who rely heavily on debt financing, ETH sports a balance sheet as clean as a puppy's tooth.
Interest expense is minimal.
As a result, ETH's profits fluctuate much less than you might expect from a business that deals in big-ticket items. In fact, ETH's earnings have risen every year since 1993. For FY 2001, which ends June 30, I'm projecting a record year for Ethan Allen. What really excites me about Ethan Allen, however, is the stock price. Management knows the stock is cheap.