Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shareholders in Ethan Allen Interiors (NYSE: ETH) awoke to a bed in disarray this morning, their shares a bedraggled heap, seemingly worth 12.5% less than they'd fetched the evening before. After downing a cup of joe, though, and rubbing the sleep from their eyes, shareholders may see that the damage is not as bad as it looks.

So what: A quick glance at Yahoo! Finance reveals that no one in the mainstream media is much interested in this story, so let me fill you in: Ethan Allen reported earnings after market close last night, and the news really wasn't all that bad. Sales grew more than 10% in comparison to last year's fiscal third quarter. Profits came to $0.12 per share, a nice surprise after last year's $0.03 loss.

Now what: Honestly, after reviewing the numbers I'm not sure what has investors so upset (aside from the stock price drop itself). So far this year, Ethan Allen has booked $0.76 per share in profit and has already earned more than the $0.60 analysts predicted it would earn over the course of the entire year. It's collected nearly $35 million in free cash flow, too (58% better than its GAAP-income statement would lead you to believe). Seems to me, the company's doing just fine -- and if you choose to defy the sell-off and buy the stock at today's new-and-improved, lower price, you should do just fine, too.

Is Rich right? Is Ethan Allen really cheaper than anyone suspects? Add it to your watchlist, and find out.

Fool contributor Rich Smith does not own (or short) shares of Ethan Allen. Yet. The Motley Fool has a disclosure policy.

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