You look tired there, Fool. Here, sit yourself down in this comfy armchair and take a load off your feet. No sense standing -- you've got three whole days to wait before Stanley Furniture (NASDAQ:STLY) releases its earnings results anyway. Pacing won't make it come any faster.

Wall Street Wisdom:

  • General consensus. Only six analysts track Stanley's fortunes, with two of them voting buy and the rest counseling hold.
  • Revenues. Analysts expect to see Stanley's sales flag, dropping a bit more than 5% to $83.2 million.
  • Earnings. Profits are likewise believed to have declined year over year in the fourth quarter; the consensus is that we should expect to see a 7% decline to $0.40 per share.

Margin watch:
Judging from Stanley's rolling margin results (the margins it has achieved in consecutive trailing-12-month periods), the anticipated profits decline will result entirely from the declining sales. Which is good news for Stanley shareholders -- it means that the company is generally holding the line on profitability. Gross margins, as you can see, are suffering a bit from loss of economies of scale and higher energy and raw materials costs, but operating and net margins have been largely unaffected.

Margins %

6/04

9/04

12/04

4/05

7/05

10/05

Gross

23.8

24.0

24.7

24.9

24.7

24.5

Op.

10.6

10.9

11.3

11.4

11.3

11.2

Net

6.3

6.5

6.8

6.9

6.9

6.9

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

Foolish lookout:
Stanley's management said all the right things in its earnings release three months ago. Monday, your job as Stanley shareholders is simply to make sure that management's deeds continue to match its words. Look for additional share buybacks, continued paying down of Stanley's $10 million in long-term debt, good inventory management that doesn't let finished goods levels rise while sales fall. Bonus points if you can spot CEO Jeffrey Scheffer hinting that Stanley continues to steal market share from rivals such as Ethan Allen (NYSE:ETH), Furniture Brands (NYSE:FBN), Haverty (NYSE:HVT), and Bassett (NASDAQ:BSET).

Stanley Furniture is a recommendation of Motley Fool Hidden Gems . Join Tom Gardner as he searches for high-growth stocks, and get Stocks 2006 free if you subscribe for one year.

Fool contributor Rich Smith does not own shares of any company named above.