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Ethan Allen Reports Positive Fiscal 2025 Third Quarter Results Despite Challenging Environment

1. Ethan Allen reported Q3 2025 sales of $142.7 million. 2. Gross margin for Q3 2025 was 61.2%, slightly down from last year. 3. Company has $183 million in cash with no debt. 4. Ethan Allen announced an 8.3% increase in cash dividends. 5. Written orders declined 11.2% in wholesale and 13.0% in retail.

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FAQ

Why Neutral?

Despite strong cash position and dividends, declining sales indicate underlying challenges. Historical trends show companies face short-term volatility when order backlogs decrease significantly.

How important is it?

The company's performance, cash flow, and dividends indicate stability; however, declining orders may concern investors.

Why Short Term?

Current economic challenges such as interest rates and consumer confidence may lead to immediate impacts on sales. The trends in written orders point to potential short-term difficulties.

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DANBURY, CT, May 05, 2025 (GLOBE NEWSWIRE) -- Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE: ETD), a leading interior design destination, today reported its results for the fiscal 2025 third quarter ended March 31, 2025. Farooq Kathwari, Ethan Allen’s Chairman, President and CEO commented, “Our vertically integrated enterprise, including our interior design retail network, relevant product offerings and ability to manufacture about 75% of our furniture in our own North American facilities, has provided us a strategic advantage.” “We are pleased with our third quarter results, which produced a strong gross margin, positive operating cash flow and total cash and investments of $183.0 million with no outstanding debt. These results reflect our ability to operate in an industry faced with reciprocal and retaliatory tariffs, uncertainty in the economy, elevated interest rates and a challenging housing market, that together, have impacted consumer confidence and interest in the home,” continued Mr. Kathwari. “For the quarter ended March 31, 2025, we reported consolidated net sales of $142.7 million, gross margin of 61.2%, adjusted operating income of $11.3 million, adjusted operating margin of 8.0% and adjusted diluted EPS of $0.38. We generated $10.2 million in cash from operations, which helped us grow our total cash and investments by $1.9 million from a year ago. We continued our history of returning capital to shareholders by paying a regular quarterly cash dividend of $10.0 million during the third quarter and are pleased to announce that today our Board approved a regular quarterly cash dividend of $0.39 per share, payable on May 29, 2025.” Mr. Kathwari further commented, “we continue to strengthen various areas of our enterprise, including our talent, product offerings, marketing, retail network, manufacturing, logistics, technology and social responsibility. We are thankful for the continued hard work and support of our 3,294 talented and dedicated associates, who have greatly benefited from ongoing investments in technology, and helped us lower headcount by 35.7% since 2019. We look forward to continued progress and remain cautiously optimistic.” Founded in 1932, Ethan Allen owns and operates U.S. manufacturing plants in Vermont and North Carolina while operating an upholstery plant in Mexico and a case goods plant in Honduras. Centering business operations closer to its customer has helped Ethan Allen become a leading interior design destination while earning recognition for its exceptional quality and service, having twice been named America’s #1 Premium Furniture Retailer by Newsweek. “To provide additional perspective on our current strong position, a brief overview of our history. Ethan Allen was founded 93 years ago in the Green Mountains of Vermont. The Company went private in 1989 with significant debt and in 1993 went public on the New York Stock Exchange. Since that time, we have paid cash dividends totaling $711.3 million and repurchased $625.1 million of our common stock. In addition, by leveraging ongoing investments in technology, we have reduced our headcount from 5,120 as of March 31, 2019 to 3,294 today,” concluded Mr. Kathwari. FISCAL 2025 THIRD QUARTER HIGHLIGHTS* Consolidated net sales of $142.7 million; prior year $146.4 million Wholesale net sales of $99.0 million; prior year $89.8 millionRetail net sales of $117.6 million; prior year $122.6 million Written orders Wholesale segment written orders declined 11.2%Retail segment written orders decreased 13.0% Consolidated gross margin of 61.2%; prior year 61.3%Operating margin of 7.7%; adjusted operating margin of 8.0% compared with 10.0% last yearAdvertising expenses were equal to 3.4% of consolidated net sales, consistent with the prior yearDiluted EPS of $0.37; adjusted diluted EPS of $0.38 compared with $0.48 last yearGenerated $10.2 million of cash from operating activities; prior year $23.7 millionPaid cash dividends totaling $10.0 million or $0.39 per share, up 8.3% from a year agoEnded the quarter with $183.0 million in total cash and investments with no outstanding debtInventory carrying levels totaled $150.4 million at March 31, 2025, up $8.3 million since June 30, 2024 Ended the quarter with 3,294 employees, down 4.5% from a year ago and 35.7% less than March 2019Operated 174 Ethan Allen retail design centers in North America at March 31, 2025, including 143 Company-operated and 31 independently owned and operated locations; the Company also has design centers outside of North AmericaOpened new retail design centers in Middleton, Wisconsin and Toronto, Canada during the quarter that showcase the Company’s home furnishings while combining complimentary interior design services with technologyFor the sixth consecutive year, Ethan Allen’s upholstery operations in Silao, Mexico was recognized as “Empresa Socialmente Responsible” (Environmentally and Socially Responsible) * See reconciliation of GAAP to adjusted key financial measures in the back of this release. Comparisons are to the fiscal 2024 third quarter. KEY FINANCIAL MEASURES* (Unaudited)(In thousands, except per share data) Three months endedNine months ended March 31, March 31,   2025  2024   2025  2024  Net sales$142,695 $146,421  $454,292 $477,589  Gross profit$87,356 $89,824  $276,062 $290,601  Gross margin 61.2% 61.3%  60.8% 60.8% GAAP operating income$10,997 $15,325  $46,719 $55,364  Adjusted operating income*$11,347 $14,571  $47,307 $55,867  GAAP operating margin 7.7% 10.5%  10.3% 11.6% Adjusted operating margin* 8.0% 10.0%  10.4% 11.7% GAAP net income$9,605 $12,953  $39,328 $45,303  Adjusted net income*$9,865 $12,390  $39,765 $45,679  GAAP diluted EPS$0.37 $0.50  $1.53 $1.77  Adjusted diluted EPS*$0.38 $0.48  $1.55 $1.78  Cash flows from operating activities$10,180 $23,664  $36,879 $53,954   * See reconciliation of GAAP to adjusted key financial measures in the back of this release. BALANCE SHEET and CASH FLOW Cash and investments totaled $183.0 million at March 31, 2025, compared with $195.8 million at June 30, 2024 and $181.1 million a year ago. The decrease during the first nine months of fiscal 2025 was due to $40.1 million in cash dividends paid and capital expenditures of $9.4 million partially offset by $36.9 million in cash generated from operating activities. Cash from operating activities totaled $36.9 million during fiscal 2025, a decrease from $54.0 million in the prior year period due to lower net income and changes in working capital. Changes in working capital reflect an increase in inventory within the retail segment combined with the timing of software technology payments. Cash dividends paid during fiscal 2025 totaled $40.1 million, which included a special cash dividend of $10.2 million, or $0.40 per share, and regular quarterly cash dividends totaling $29.9 million, or $0.39 per share, an 8.3% increase from last year’s regular quarterly dividend. Inventories, net totaled $150.4 million at March 31, 2025, an increase of $8.3 million since June 30, 2024. The introduction of new products and the opening of new design centers led to higher inventory levels within the Company’s retail segment. Customer deposits from undelivered written orders totaled $79.3 million at March 31, 2025, up from $73.5 million at June 30, 2024 due to timing of incoming orders. Wholesale backlog was $54.6 million at March 31, 2025, a decline of $3.1 million during the quarter, which helped reduce the number of weeks of backlog. No debt outstanding at March 31, 2025. DIVIDENDS On January 28, 2025, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.39 per share, which was paid on February 26, 2025. More recently, on May 5, 2025, the Board of Directors declared a regular quarterly cash dividend of $0.39 per share, payable on May 29, 2025 to shareholders of record as of May 15, 2025. Ethan Allen is pleased to pay a regular quarterly cash dividend, which highlights its strong balance sheet and operating results.  CONFERENCE CALL Ethan Allen will host a conference call with investors and analysts today, May 5, 2025, at 5:00 PM (Eastern Time) to discuss these results. The conference call will be webcast live from the Company’s Investor Relations website at https://ir.ethanallen.com. The following information is provided for those who would like to participate in the conference call: U.S. Participants:                 877-705-2976International Participants:         201-689-8798Meeting Number:                 13751646 For those unable to listen live, an archived recording of the call will be made available on the Company’s website referenced above for up to six months. ABOUT ETHAN ALLEN Ethan Allen (NYSE:ETD), named America’s #1 Premium Furniture Retailer by Newsweek, is a leading interior design destination combining state-of-the-art technology with personal service. Ethan Allen design centers, which represent a mix of Company-operated and independent licensee locations, offer complimentary interior design service and sell a full range of home furnishings, including custom furniture and artisan-crafted accents for every room in the home. Vertically integrated from product design through logistics, the Company manufactures about 75% of its custom-crafted furniture in its own North American manufacturing facilities and has been recognized for product quality and craftsmanship since 1932. Learn more at www.ethanallen.com and follow Ethan Allen on Facebook, Instagram, and LinkedIn.  Investor Relations Contact: Matt McNultySenior Vice President, Chief Financial Officer and TreasurerIR@ethanallen.com ABOUT NON-GAAP FINANCIAL MEASURES This release is intended to supplement, rather than to supersede, the Company's consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). In this release the Company has included financial measures that are derived from the consolidated financial statements but are not presented in accordance with GAAP. The Company uses non-GAAP financial measures, including adjusted operating income and margin, adjusted net income and adjusted diluted EPS (collectively “non-GAAP financial measures”). The Company computes these non-GAAP financial measures by adjusting the comparable GAAP measure to remove the impact of certain charges and gains and the related tax effect of these adjustments. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, or superior to, the financial performance measures prepared in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measure reported in accordance with GAAP is provided at the end of this release. FORWARD-LOOKING STATEMENTS This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Generally, forward-looking statements represent management’s beliefs and assumptions concerning current expectations, projections or trends relating to results of operations, financial results, financial condition, strategic initiatives, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, investments, future economic indicators, business conditions and industry performance. Such forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. These forward-looking statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “continue,” “may,” “will,” “short-term,” “target,” “outlook,” “forecast,” “future,” “strategy,” “opportunity,” “would,” “guidance,” “non-recurring,” “one-time,” “unusual,” “should,” “likely,” “pandemic,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. The Company derives many of its forward-looking statements from operating budgets and forecasts, which are based upon detailed assumptions. While the Company believes that its assumptions are reasonable, it cautions that it is difficult to predict the impact of known factors and it is impossible for the Company to anticipate all factors that could affect actual results and matters that are identified as “short-term,” “non-recurring,” “unusual,” “one-time,” or other words and terms of similar meaning may in fact recur in one or more future financial reporting periods.  Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that are expected. Actual results could differ materially from those anticipated in the forward-looking statements due to a number of risks and uncertainties including, but not limited to, the risks and uncertainties disclosed in Part I, Item 1A. Risk Factors, in the Company’s 2024 Annual Report on Form 10-K and other factors identified in its reports filed with the Securities and Exchange Commission (the “SEC”), available on the SEC's website at www.sec.gov. All forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements, as well as other cautionary statements. A reader should evaluate all forward-looking statements made in this release in the context of these risks and uncertainties. Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. Many of these factors are beyond the Company’s ability to control or predict. The Company is including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. The forward-looking statements included in this release are made only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as otherwise required by law. Ethan Allen Interiors Inc.Condensed Consolidated Statements of Comprehensive Income(Unaudited)(In thousands, except per share data) Three months ended March 31,Nine months ended March 31,  2025 2024  2025 2024Net sales$142,695$146,421 $454,292$477,589Cost of sales 55,339 56,597  178,230 186,988Gross profit 87,356 89,824  276,062 290,601Selling, general and administrative expenses 76,253 75,253  228,999 234,734Restructuring and other charges, net of gains 106 (754) 344 503Operating income 10,997 15,325  46,719 55,364Interest and other income, net 1,599 2,037  5,826 5,541Interest and other financing costs 60 64  183 177Income before income taxes 12,536 17,298  52,362 60,728Income tax expense 2,931 4,345  13,034 15,425Net income$9,605$12,953 $39,328$45,303     Net income per diluted share$0.37$0.50 $1.53$1.77Diluted weighted average common shares 25,629 25,650  25,624 25,632 Ethan Allen Interiors Inc.  Condensed Consolidated Balance Sheets  (Unaudited)  (In thousands)   March 31,June 30,ASSETS 2025  2024 Current assets  Cash and cash equivalents$65,731 $69,710 Investments, short-term 107,202  91,319 Accounts receivable, net 7,312  6,766 Inventories, net 150,384  142,040 Prepaid expenses and other current assets 30,763  22,848 Total current assets 361,392  332,683    Property, plant and equipment, net 211,008  215,258 Goodwill 25,388  25,388 Intangible assets 19,740  19,740 Operating lease right-of-use assets 108,383  114,242 Deferred income taxes 732  824 Investments, long-term 10,041  34,772 Other assets 2,056  2,010 Total ASSETS$738,740 $744,917    LIABILITIES AND SHAREHOLDERS’ EQUITY  Current liabilities  Accounts payable and accrued expenses$26,973 $27,400 Customer deposits 79,299  73,471 Accrued compensation and benefits 19,251  20,702 Current operating lease liabilities 27,794  27,387 Other current liabilities 4,469  4,736 Total current liabilities 157,786  153,696    Operating lease liabilities, long-term 95,064  100,897 Deferred income taxes 2,237  3,035 Other long-term liabilities 4,501  4,373 Total LIABILITIES 259,588  262,001    Shareholders’ equity     Ethan Allen Interiors Inc. shareholders’ equity 479,242  482,980    Noncontrolling interests (90) (64)Total SHAREHOLDERS’ EQUITY 479,152  482,916 Total LIABILITIES AND SHAREHOLDERS’ EQUITY$738,740 $744,917  Reconciliation of Non-GAAP Financial Measures To supplement the financial measures prepared in accordance with GAAP, the Company uses non-GAAP financial measures, including adjusted operating income and margin, adjusted net income and adjusted diluted EPS. The reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are shown in tables below. These non-GAAP measures are derived from the consolidated financial statements but are not presented in accordance with GAAP. The Company believes these non-GAAP measures provide a meaningful comparison of its results to others in its industry and prior year results. Investors should consider these non-GAAP financial measures in addition to, and not as a substitute for, its financial performance measures prepared in accordance with GAAP. Moreover, these non-GAAP financial measures have limitations in that they do not reflect all the items associated with the operations of the business as determined in accordance with GAAP. Other companies may calculate similarly titled non-GAAP financial measures differently than the Company does, limiting the usefulness of those measures for comparative purposes. Despite the limitations of these non-GAAP financial measures, the Company believes these adjusted financial measures and the information they provide are useful in viewing its performance using the same tools that management uses to assess progress in achieving its goals. Adjusted measures may also facilitate comparisons to historical performance. The following tables provide a reconciliation of non-GAAP financial measures used in this release to the most directly comparable GAAP financial measures: (Unaudited)(In thousands, except per share data)Three months ended  Nine months ended  March 31,           March 31,   2025  2024 % Change  2025  2024 % ChangeConsolidated Adjusted Operating Income / Operating MarginGAAP Operating income$10,997 $15,325 (28.2%) $46,719 $55,364 (15.6%)Adjustments (pre-tax)* 350  (754)   588  503  Adjusted operating income*$11,347 $14,571 (22.1%) $47,307 $55,867 (15.3%)        Consolidated Net sales$142,695 $146,421 (2.5%) $454,292 $477,589 (4.9%)GAAP Operating margin 7.7% 10.5%   10.3% 11.6% Adjusted operating margin* 8.0% 10.0%   10.4% 11.7%         Consolidated Adjusted Net Income / Adjusted Diluted EPSGAAP Net income$9,605 $12,953 (25.8%) $39,328 $45,303 (13.2%)Adjustments, net of tax* 260  (563)   437  376  Adjusted net income$9,865 $12,390 (20.4%) $39,765 $45,679 (12.9%)Diluted weighted average common shares 25,629  25,650    25,624  25,632  GAAP Diluted EPS$0.37 $0.50 (26.0%) $1.53 $1.77 (13.6%)Adjusted diluted EPS*$0.38 $0.48 (20.8%) $1.55 $1.78 (12.9%) * Adjustments to reported GAAP financial measures including operating income and margin, net income and diluted EPS have been adjusted by the following:     (Unaudited)Three months ended                     Nine months ended(In thousands)March 31,                           March 31,  2025  2024  2025  2024 Orleans, Vermont flood$52 $(103)$73 $2,243 Gain on sale-leaseback transaction -  (656) (218) (1,966)Severance and other charges 298  5  733  226 Adjustments to operating income$350 $(754)$588 $503 Related income tax effects on non-recurring items(1) (90) 191  (151) (127)Adjustments to net income$260 $(563)$437 $376  (1)   Calculated using the marginal tax rate for each period presented.

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