Is it just me, or did Farooq Kathwari have his tongue stuck really far into his cheek in this morning's third quarter earnings release when he said he felt the analyst estiminates for the company's June fourth quarter are "within reach"?What a boomer quarter they just reported!Sales up 15.5% to $267M. This was $20M or 8% above the analysts' consensus estimate, and a full $16M or 6.3% above the highest analyst estimate for the quarter of $251M.Gross profit? Up 21.6% from a year ago, to 50.5% of sales (vs. 47.8% a year ago).Increases in "...selected raw materials, fuel, utilities, and health insurance..." costs? Yes, like everyone else in the industry. As a result, operating profit for the quarter was up "only" 13.8% and the operating margin slipped to 12.5% from 12.7% a year earlier. A higher effective tax rate this year? Yes: 37.5%, down from 38.7% in fiscal 2005, so net income for the quarter was only up 11.5%.But what about the 2.1 million [net] shares the company repurchased vis-a-vis last year? Well, that resulted in the final diluted per share earnings for the quarter rising about 18% to $0.59, vs. the analysts' high and consensus estimate for the quarter of $0.57 and $0.56, respectively.So do I think the analysts' June quarter estimates ($257M in sales and $0.63 EPS) are 'within reach'? That would be a definite 'yes'.-----Note to Farooq: Either give yourself a heckuva big bonus, or take a nice vacation... you've definitely earned both in my view.
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