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Ethan Allen Updates Comments On Summer Business Conditions

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In anticipation of being asked to comment on current business trends at a Goldman Sachs' Global Retailing Conference on September 7, 2006, Ethan Allen Interiors Inc. Chairman and CEO Farooq Kathwari stated, "As indicated in our July 27th earnings press release, sales did start slowing in July and have slowed further in August. This quarter we are being impacted by both lower consumer confidence and our initiative, started last July, to reduce the lead time in filling customer orders. As we previously indicated, the faster backlog turnover reduces the forward visibility of delivered sales, and we are subject to more volatility as demand levels fluctuate. "We are pleased that our June 30, 2006 fiscal year ended with record sales and strong profitability. More importantly, we have continued to take steps to differentiate Ethan Allen by focusing on providing decorating solutions. In that regard we have strong product programs in place; we have strengthened our design professional staff and retail management; and, we continue to relocate our Interior Design Centers. In mid September we will have over 800 of our associates attending our annual Retail Convention at which time we will be discussing our marketing initiatives for the next year and also unveiling new product introductions in our newly renovated Ethan Allen Interior Design Center in Danbury. We will be hosting an Investor Conference at our Danbury, Connecticut headquarters to share these exciting initiatives with the investment community on September 26th. The presentations will be available on our website at http://ethanallen.com/investors."

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