The Danbury, CT-based furniture maker and retailer, which operates 307 design centers in the US and overseas, said sales for its retail division declined by 1.4%, dropping to $177.4 million, while wholesale sales dropped fell 11.7% to $165.7 million. Same-store sales were also off 8.5% over the prior year's quarter, the company said.

Farooq Kathwari, Ethan Allen's chairman and chief executive office, blamed the quarterly decline on a soft home furnishings market and challenging prior-year comparisons. Despite positive trends in comparable sales during December, Kathwari said that the overall retail home furnishing market "remains uncertain" but said the company is "within reach" of earning expectations set by Wall Street for the third quarter. Analysts on average expect the company to earn 61 cents per share on sales of $267 million.

For the six month period ended Dec. 31, 2006, net sales were $500.2 million, a drop of more than $27 million over the $527.3 million in sales during the prior year's comparable period. Retail sales were up 1.5% to $343.4 million while wholesale sales plunged 12.2% to $321.3 million. Comparable sales for the last six months of 2006 declined by 5.3%, the company says.