Comparable Ethan Allen store delivered sales increased 1.8% over the prior-year quarter, while comp-store written sales increased 5.7%. Net delivered sales for the company's retail division increased 4.2% to $155.8 million during the second quarter, and retail division written sales increased 8.2% during the same period.

Farooq Kathwari, chairman, president and CEO of the company, partly attributed Ethan Allen's current strengths to an updated product selection. "Our products are stylish… and 70% have been changed in the last three years," he said during Wednesday's earnings conference call. "After redesigning the formal site, we're now starting to market the casual and contemporary lifestyle products. We are introducing our New Impressions and Horizons programs, followed by another strong program called Tango (ph) in the fourth quarter."The second quarter was notable for the company in that it stepped up its marketing significantly. "During the second quarter, we started to increase our marketing and advertising expenditures," Kathwari said. "We increased the distribution of our direct mail by 33%, reaching 11 million households; and in the third quarter, we are increasing by 40% of our direct mail to reach about 13 million households. In the fourth quarter, we plan to take our direct-mail magazines down to previous levels and start national television advertising to market our new Casual Contemporary lifestyle products."

During 2004, Ethan Allen opened 10 new stores, and in its second fiscal quarter, opened a store in Palm Desert, CA, closed three small stores, and ended the quarter with 313 stores, of which 124 are company-operated. In the second half of this fiscal year, according to Kathwari, the company plans to open seven or eight new stores, and in the next 12 months about 15 new stores. The company, unusual for a retailer, also has 12 manufacturing facilities, which include two sawmills, located throughout the United States.