It's been 2 years since Ethan Allen Interiors Inc. (ETH - Snapshot Report) was a Zacks Rank #1 (Strong Buy). The furniture retailer recently easily beat the Zacks Consensus in the fiscal first quarter and analysts have been raising full year estimates.

Furniture is back!

Ethan Allen is an upscale home furnishing retailer. It operates 300 design centers in the United States and overseas. It also owns 8 manufacturing facilities, including 5 in the United States, along with a sawmill, and one each in Mexico and Honduras.

Second Big Beat in a Row

On Oct 21, Ethan Allen reported its fiscal first quarter results and blew by the Zacks Consensus Estimate for the second quarter in a row. Earnings were $0.44 versus the consensus of $0.35.

Sales rose 5% to $190.7 million compared to the first quarter last year. Retail net sales rose 2.3% while wholesale saw even better numbers, with sales rising 10.1%.

Gross margin rose 60 basis points to 55% year over year.

It's shipped 80% of its fall collection which will have over 600 new items.

A lot of time and energy has gone into the company's new web site. It finally launched on Oct 15. Internet shopping is now the norm. While it may seem counter intuitive that shoppers would buy furniture online, Williams-Sonoma now sees 51% of its total revenue from online purchases.

The company had tightened advertising spending but will now ramp it up into the second half of fiscal 2015, which is the beginning of next calendar year.

The company said it remains "cautiously optimistic."

Double Digit Earnings Growth Expected

Analysts are also optimistic that the recovery in housing, and the consumer's wallet, is continuing. 5 estimates were raised for both fiscal 2015 and fiscal 2016 in the last 30 days.

Earnings are expected to jump 17.6% in fiscal 2015 and another 19.2% in 2016.

That gives Ethan Allen a forward P/E of 16.3. That's cheaper than the average of the S&P 500, which is trading at 17.8x.

Shares Jump

Shares had been stagnant for most of the year but got a boost from this solid earnings report.

Ethan Allen has some attractive fundamentals including a price-to-book ratio of just 2.2.

For investors looking at the furniture retailers as a way to play the housing recovery and the return of the consumer, Ethan Allen is one to keep on your short list.

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