After looking at the second-quarter earnings release for Ethan Allen (NYSE:ETH), I have a hard time finding any faults. The company simply seems to have gotten its footing after a very trying period for the furniture industry, one that saw not only Ethan Allen but also Hooker Furniture (NASDAQ:HOFT), Pier 1 Imports (NYSE:PIR), and Bassett Furniture (NASDAQ:BSET) all take it on the chin repeatedly as low-cost imports and competition exacted their toll.

For the quarter, the company turned in sales 12.5% higher year over year, along with improved gross margins and operating margins. The solid sales performance and margin improvements, along with share repurchases, led to an increase in diluted earnings per share of 22.2%.

The balance sheet looks sound as well. Cash assets are up, which is normal after the holiday quarter, though in this case it is largely due to the company's taking on $200 million in new debt back in September. More importantly, however, year-over-year growth in the company's inventory tracks its sales growth, and its accounts receivable growth actually trails its sales growth -- and both scenarios point to healthy and high-quality earnings. The company does carry $203 million in debt, but its interest coverage ratio (earnings before interest and taxes/interest expense) and its free cash flow through the first six months appear more than adequate to support this level of debt.

The only thing I question in Ethan Allen's earnings announcement is the paragraph in which the company breaks with its usual policy of not giving guidance. The company states that it will achieve 8.5% earnings growth in its third quarter, and it thinks analysts' expectations for its fourth quarter are reasonable.

As much as this is nice to know, I don't think it's a smart move for Ethan Allen. It simply doesn't work well to provide guidance during good times and withhold it during the bad. And when it's all said and done, I'm always more happy to see companies abstain from the guidance game altogether.

For related Furniture Foolishness:

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Nathan Parmelee has no financial stake in any of the companies mentioned. The Motley Fool has an ironclad disclosure policy.