Ethan Allen Shares Slump After Results Prereleased

CHICAGO (AP) — Shares of home furnishings retailer Ethan Allen Interiors Inc. sank Wednesday, a day after the company released preliminary third-quarter results and halved its dividend, prompting at least one analyst to downgrade the stock.

Shares of the company were down 83 cents, or 6.5 percent, at $12.04 in late-morning trading after dipping as low as $10.66 earlier in the session.

Raymond James analyst Budd Bugatch cut his rating on the Danbury, Conn.-based company to "Market Perform" on Wednesday, down from "Outperform" and placed estimates under review after the "disappointing" results issued late Tuesday.

"Despite its excellent management, cohesive business model and highly recognizable brand, Ethan Allen's sales remain under severe (and increasing) pressure due to the difficult economy and the highly discretionary nature of its product," Bugatch wrote in a research note.

On Tuesday, Ethan Allen said it will likely lose between $17 million and $18 million for the third quarter, because of a massive sales drop attributed to the recession.

That amounts to a per-share loss between 59 cents and 63 cents. Excluding restructuring and impairment charges, Ethan Allen said it lost $12.5 million to $13.5 million, or between 43 cents and 47 cents a share, in the three-month period that ended in March.