Ethan Allen Reports Fiscal 2025 Second Quarter Results Highlighted by Strong Demand, Margins and Operating Cash Flow
Rhea-AI Summary
Ethan Allen (NYSE: ETD) reported fiscal 2025 second quarter results with consolidated net sales of $157.3 million and a gross margin of 60.3%. The company achieved an operating income of $18.2 million with an operating margin of 11.5% and diluted EPS of $0.59.
Key highlights include strong written order trends, with retail segment orders up 15.8% and wholesale segment orders rising 14.3%. The company maintains a robust financial position with $184.2 million in total cash and investments and no debt. The Board approved a regular quarterly cash dividend of $0.39 per share.
The company operates 172 retail design centers in North America and manufactures approximately 75% of its furniture in North American facilities. Despite challenging political and economic conditions, Ethan Allen reported increased consumer interest and maintains a cautiously optimistic outlook.
Positive
- Written orders increased significantly: retail +15.8%, wholesale +14.3%
- Strong cash position of $184.2 million with no debt
- Maintained high gross margin at 60.3%
- Increased quarterly dividend by 8.3% year-over-year to $0.39 per share
- Generated $11.6 million in operating cash flow
Negative
- Net sales declined to $157.3 million from $167.3 million year-over-year
- Operating margin decreased to 11.5% from 12.8% in prior year
- Diluted EPS dropped to $0.59 from $0.68 year-over-year
- Employee count reduced by 6.9% compared to previous year
Insights
Ethan Allen's Q2 FY2025 results demonstrate resilient performance amid market headwinds, with several noteworthy developments:
Financial Strength & Efficiency:
- Robust gross margin of
60.3% showcases pricing power and operational efficiency, particularly impressive given industry-wide cost pressures - Strong cash position of
$184.2 million with zero debt reflects excellent balance sheet management - Strategic workforce optimization, with employee count down
6.9% YoY, has maintained productivity while controlling costs
Operational Highlights:
- Double-digit growth in written orders (retail
15.8% , wholesale14.3% ) indicates strong demand recovery - Vertical integration with
75% North American manufacturing provides important supply chain control - Inventory levels of
$142.0 million show disciplined management, up only$1.1 million YoY despite order growth
The company's vertically integrated model proves particularly valuable in the current environment, offering better margin control and supply chain resilience. The
DANBURY, CT, Jan. 29, 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 second quarter ended December 31, 2024.
Farooq Kathwari, Ethan Allen’s Chairman, President and CEO commented, “We are pleased with our performance that saw incremental consumer interest return back to the home amidst a challenging political and economic environment. We are positioned well as a vertically integrated enterprise with 172 retail design centers in North America and more internationally. Our ability to manufacture approximately
“For the quarter ended December 31, 2024, we reported consolidated net sales of
“As previously mentioned during our 2024 International Convention held in December, we are Focused on the Future. We offer relevant, high-quality products and provide interior design services with state-of-the-art technology, a great advantage for us. We look forward to continued progress and remain cautiously optimistic,” concluded Mr. Kathwari.
FISCAL 2025 SECOND QUARTER HIGHLIGHTS*
- Consolidated net sales of
$157.3 million ; prior year$167.3 million - Retail net sales of
$134.3 million ; prior year$139.2 million - Wholesale net sales of
$86.8 million ; prior year$90.6 million
- Retail net sales of
- Written order trends
- Retail segment written orders increased
15.8% - Wholesale segment written orders rose
14.3%
- Retail segment written orders increased
- Consolidated gross margin of
60.3% ; prior year60.2% - Operating margin of
11.5% ; adjusted operating margin of11.5% compared with12.8% last year - Advertising expenses were equal to
2.5% of consolidated net sales, up from2.0% in the prior year - Diluted EPS of
$0.59 ; prior year$0.68 - Generated
$11.6 million of cash from operating activities; prior year$13.6 million - Paid cash dividends totaling
$10.0 million or$0.39 per share, up8.3% from a year ago - Ended the quarter with
$184.2 million in total cash and investments with no debt outstanding - Inventory carrying levels totaled
$142.0 million at December 31, 2024, up$1.1 million from a year ago - Ended the quarter with 3,318 total employees, down
6.9% from a year ago and27.0% less than at December 31, 2019 - Operated 172 Ethan Allen retail design centers in North America at December 31, 2024, including 141 Company-operated and 31 independently owned and operated locations; the Company also has design centers outside of North America
- Ethan Allen’s North Carolina distribution center that previously sustained flooding from Hurricane Helene in September 2024 resumed operations during the second quarter
- In December 2024, the Company held its 2024 International Convention live at its headquarters and livestreamed across the world; under the theme of Focused on the Future, the program honored Ethan Allen’s 92-year history, reviewed current and future initiatives in manufacturing, logistics, technology, marketing and retail, and celebrated interior designers both for achievement in written sales and design excellence
- The Sustainable Furnishings Council and the National Wildlife Federation recently recognized Ethan Allen for its wood-sourcing policies and commitment to sustainable wood used to make the furniture they sell; Ethan Allen was awarded the designation of “Most Improved” for 2024, which is given to only one furniture retailer per year
- Ethan Allen’s upholstery operations in Silao, Mexico was recently awarded the Great Place to Work® certification for the seventh consecutive year; in addition to this designation, the Silao operations 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 second quarter.
KEY FINANCIAL MEASURES*
| (Unaudited) | ||||||||||||||
| (In thousands, except per share data) | ||||||||||||||
| Three months ended | Six months ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||
| Net sales | $ | 157,260 | $ | 167,276 | $ | 311,597 | $ | 331,168 | ||||||
| Gross profit | $ | 94,837 | $ | 100,636 | $ | 188,706 | $ | 200,777 | ||||||
| Gross margin | 60.3 | % | 60.2 | % | 60.6 | % | 60.6 | % | ||||||
| GAAP operating income | $ | 18,157 | $ | 21,688 | $ | 35,722 | $ | 40,039 | ||||||
| Adjusted operating income* | $ | 18,163 | $ | 21,453 | $ | 35,960 | $ | 41,296 | ||||||
| GAAP operating margin | 11.5 | % | 13.0 | % | 11.5 | % | 12.1 | % | ||||||
| Adjusted operating margin* | 11.5 | % | 12.8 | % | 11.5 | % | 12.5 | % | ||||||
| GAAP net income | $ | 15,004 | $ | 17,411 | $ | 29,723 | $ | 32,350 | ||||||
| Adjusted net income* | $ | 15,008 | $ | 17,235 | $ | 29,900 | $ | 33,289 | ||||||
| Effective tax rate | 25.4 | % | 25.5 | % | 25.4 | % | 25.5 | % | ||||||
| GAAP diluted EPS | $ | 0.59 | $ | 0.68 | $ | 1.16 | $ | 1.26 | ||||||
| Adjusted diluted EPS* | $ | 0.59 | $ | 0.67 | $ | 1.17 | $ | 1.30 | ||||||
| Cash flows from operating activities | $ | 11,619 | $ | 13,590 | $ | 26,699 | $ | 30,290 | ||||||
* See reconciliation of GAAP to adjusted key financial measures in the back of this release.
BALANCE SHEET and CASH FLOW
Cash and investments totaled
Cash from operating activities totaled
Cash dividends paid during the first six months of fiscal 2025 totaled
Inventories, net totaled
Customer deposits from undelivered written orders totaled
No debt outstanding at December 31, 2024.
DIVIDENDS
On October 29, 2024, the Company’s Board of Directors declared a regular quarterly cash dividend of
CONFERENCE CALL
Ethan Allen will host a conference call with investors and analysts today, January 29, 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: 877-705-2976
- International Participants: 201-689-8798
- Meeting Number: 13750115
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
Investor Relations Contact:
Matt McNulty
Senior Vice President, Chief Financial Officer and Treasurer
IR@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 December 31, | Six months ended December 31, | ||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||
| Net sales | $ | 157,260 | $ | 167,276 | $ | 311,597 | $ | 331,168 | |
| Cost of sales | 62,423 | 66,640 | 122,891 | 130,391 | |||||
| Gross profit | 94,837 | 100,636 | 188,706 | 200,777 | |||||
| Selling, general and administrative expenses | 76,674 | 79,183 | 152,746 | 159,481 | |||||
| Restructuring and other charges, net of gains | 6 | (235 | ) | 238 | 1,257 | ||||
| Operating income | 18,157 | 21,688 | 35,722 | 40,039 | |||||
| Interest and other income, net | 2,029 | 1,719 | 4,227 | 3,504 | |||||
| Interest and other financing costs | 63 | 52 | 123 | 113 | |||||
| Income before income taxes | 20,123 | 23,355 | 39,826 | 43,430 | |||||
| Income tax expense | 5,119 | 5,944 | 10,103 | 11,080 | |||||
| Net income | $ | 15,004 | $ | 17,411 | $ | 29,723 | $ | 32,350 | |
| Net income per diluted share | $ | 0.59 | $ | 0.68 | $ | 1.16 | $ | 1.26 | |
| Diluted weighted average common shares | 25,625 | 25,630 | 25,622 | 25,624 | |||||
| Ethan Allen Interiors Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (Unaudited) | ||||||
| (In thousands) | ||||||
| December 31, | June 30, | |||||
| ASSETS | 2024 | 2024 | ||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 57,075 | $ | 69,710 | ||
| Investments, short-term | 82,049 | 91,319 | ||||
| Accounts receivable, net | 5,008 | 6,766 | ||||
| Inventories, net | 142,014 | 142,040 | ||||
| Prepaid expenses and other current assets | 30,050 | 22,848 | ||||
| Total current assets | 316,196 | 332,683 | ||||
| Property, plant and equipment, net | 212,610 | 215,258 | ||||
| Goodwill | 25,388 | 25,388 | ||||
| Intangible assets | 19,740 | 19,740 | ||||
| Operating lease right-of-use assets | 110,572 | 114,242 | ||||
| Deferred income taxes | 906 | 824 | ||||
| Investments, long-term | 45,092 | 34,772 | ||||
| Other assets | 2,069 | 2,010 | ||||
| Total ASSETS | $ | 732,573 | $ | 744,917 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued expenses | $ | 23,720 | $ | 27,400 | ||
| Customer deposits | 70,777 | 73,471 | ||||
| Accrued compensation and benefits | 23,010 | 20,702 | ||||
| Current operating lease liabilities | 27,890 | 27,387 | ||||
| Other current liabilities | 4,682 | 4,736 | ||||
| Total current liabilities | 150,079 | 153,696 | ||||
| Operating lease liabilities, long-term | 96,870 | 100,897 | ||||
| Deferred income taxes | 2,428 | 3,035 | ||||
| Other long-term liabilities | 4,477 | 4,373 | ||||
| Total LIABILITIES | 253,854 | 262,001 | ||||
| Shareholders’ equity | ||||||
| Ethan Allen Interiors Inc. shareholders’ equity | 478,816 | 482,980 | ||||
| Noncontrolling interests | (97 | ) | (64 | ) | ||
| Total SHAREHOLDERS’ EQUITY | 478,719 | 482,916 | ||||
| Total LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 732,573 | $ | 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 | Six months ended | ||||||||||||||||
| December 31, | December 31, | |||||||||||||||||
| 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||||
| Consolidated Adjusted Operating Income / Operating Margin | ||||||||||||||||||
| GAAP Operating income | $ | 18,157 | $ | 21,688 | (16.3 | %) | $ | 35,722 | $ | 40,039 | (10.8 | %) | ||||||
| Adjustments (pre-tax)* | 6 | (235 | ) | 238 | 1,257 | |||||||||||||
| Adjusted operating income* | $ | 18,163 | $ | 21,453 | (15.3 | %) | $ | 35,960 | $ | 41,296 | (12.9 | %) | ||||||
| Consolidated Net sales | $ | 157,260 | $ | 167,276 | (6.0 | %) | $ | 311,597 | $ | 331,168 | (5.9 | %) | ||||||
| GAAP Operating margin | 11.5 | % | 13.0 | % | 11.5 | % | 12.1 | % | ||||||||||
| Adjusted operating margin* | 11.5 | % | 12.8 | % | 11.5 | % | 12.5 | % | ||||||||||
| Consolidated Adjusted Net Income / Adjusted Diluted EPS | ||||||||||||||||||
| GAAP Net income | $ | 15,004 | $ | 17,411 | (13.8 | %) | $ | 29,723 | $ | 32,350 | (8.1 | %) | ||||||
| Adjustments, net of tax* | 4 | (176 | ) | 177 | 939 | |||||||||||||
| Adjusted net income | $ | 15,008 | $ | 17,235 | (12.9 | %) | $ | 29,900 | $ | 33,289 | (10.2 | %) | ||||||
| Diluted weighted average common shares | 25,625 | 25,630 | 25,622 | 25,624 | ||||||||||||||
| GAAP Diluted EPS | $ | 0.59 | $ | 0.68 | (13.2 | %) | $ | 1.16 | $ | 1.26 | (7.9 | %) | ||||||
| Adjusted diluted EPS* | $ | 0.59 | $ | 0.67 | (11.9 | %) | $ | 1.17 | $ | 1.30 | (10.0 | %) | ||||||
* 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 | Six months ended | ||||||||||
| (In thousands) | December 31, | December 31, | ||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Hurricane Helene | $ | (269 | ) | $ | - | $ | 66 | $ | - | |||
| Orleans, Vermont flood | - | 250 | 21 | 2,346 | ||||||||
| Gain on sale-leaseback transaction | - | (655 | ) | (218 | ) | (1,310 | ) | |||||
| Severance and other charges | 275 | 170 | 369 | 221 | ||||||||
| Adjustments to operating income | $ | 6 | $ | (235 | ) | $ | 238 | $ | 1,257 | |||
| Related income tax effects on non-recurring items(1) | (2 | ) | 59 | (61 | ) | (318 | ) | |||||
| Adjustments to net income | $ | 4 | $ | (176 | ) | $ | 177 | $ | 939 | |||
(1) Calculated using the marginal tax rate for each period presented.
FAQ
What were Ethan Allen's (ETD) Q2 2025 earnings per share?
How much cash and investments does ETD have as of December 2024?
What is ETD's current quarterly dividend payment?
How did ETD's written orders perform in Q2 2025?
What was ETD's operating margin in Q2 2025?
