Ethan Allen Reports Fiscal 2026 Second Quarter Results; Robust Balance Sheet and Strong Margins Despite Economic Challenges including Government Shutdown; Well-Positioned Moving Forward
Rhea-AI Summary
Ethan Allen (NYSE: ETD) reported fiscal 2026 Q2 results for the quarter ended December 31, 2025, with consolidated net sales of $149.9 million, gross margin of 60.9%, adjusted operating margin of 9.0%, adjusted diluted EPS of $0.44, and $179.3 million in cash and investments. The Board declared a regular quarterly cash dividend of $0.39 per share payable February 25, 2026.
Written orders fell notably, retail down 17.9% and wholesale down 19.3%; cash from operations was $15.0 million for six months, and the company had no outstanding debt at quarter end.
Positive
- Cash & investments of $179.3 million, no debt
- Gross margin improved to 60.9% from 60.3%
- Board declared regular cash dividend of $0.39 per share payable Feb 25, 2026
Negative
- Retail written orders down 17.9%
- Wholesale written orders down 19.3%
- Adjusted operating margin declined 260 bps from 11.5% to 9.0%
- Cash from operations decreased to $15.0 million versus $26.7 million prior year
News Market Reaction
On the day this news was published, ETD declined 0.62%, reflecting a mild negative market reaction. Argus tracked a peak move of +3.6% during that session. Argus tracked a trough of -10.9% from its starting point during tracking. Our momentum scanner triggered 6 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $4M from the company's valuation, bringing the market cap to $615M at that time. Trading volume was above average at 1.6x the daily average, suggesting increased trading activity.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus
ETD is down 1.46% while key peers show mixed, mostly modest moves: LZB -2.38%, LEG -1.49%, but AMWD, MLKN and MBC are slightly positive. With no peers in the momentum scanner and no same‑day peer news, trading appears more company‑specific than sector‑driven.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Jan 07 | Earnings date notice | Neutral | +4.1% | Announced timing and access details for fiscal 2026 Q2 results call. |
| Jan 06 | Board member death | Negative | +1.3% | Reported passing of longtime director John Dooner Jr. and his legacy. |
| Nov 13 | ESG recognition | Positive | -0.7% | Earned High Score on 2025 Wood Furniture Scorecard for sustainable sourcing. |
| Nov 12 | Workplace award | Positive | -2.9% | Silao upholstery operations received Great Place to Work Mexico certification. |
| Oct 29 | Q1 2026 results | Negative | -3.5% | Reported Q1 2026 results with lower operating income despite strong gross margin. |
Operational and ESG‑focused news has sometimes coincided with negative or muted price reactions, while core earnings date announcements have seen more mixed responses.
Over the past several months, Ethan Allen reported Q1 fiscal 2026 results on Oct 29, 2025 with solid gross margin but lower operating income, which coincided with a -3.55% move. Subsequent ESG and workplace recognition headlines in November 2025 saw small negative reactions. Early January 2026 brought a director’s passing and an earnings release date notice, with the latter linked to a +4.08% move. Today’s Q2 release extends this thread of resilient margins, strong cash and dividends amid softer demand.
Market Pulse Summary
This announcement highlights Ethan Allen’s ability to maintain strong profitability and liquidity in a challenging backdrop. Q2 net sales were $149.9M with a gross margin of 60.9% and adjusted diluted EPS of $0.44, while total cash and investments stood at $179.3M with no debt. However, retail and wholesale written orders declined double‑digits versus the prior year. Investors may track future sales trends, margin sustainability, capital return via the $0.39 dividend, and any further operational updates on demand and backlog.
AI-generated analysis. Not financial advice.
DANBURY, CT, Jan. 28, 2026 (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 2026 second quarter ended December 31, 2025.
Farooq Kathwari, Ethan Allen’s Chairman, President and CEO commented, “We are pleased to report our second quarter financial and operating results, which include strong margins and a robust balance sheet despite a challenging environment, including the U.S. government shutdown. We continue to strengthen many areas of our vertically integrated enterprise, including our talent, product offerings, marketing, technology, retail network, manufacturing, logistics and social responsibility. As the interior design destination with a strong North American manufacturing presence, we are building on our reputation for handcrafted quality, our unique blend of personal service combined with technology and our vision of classic design from a modern perspective.”
“For the second quarter ended December 31, 2025, we reported consolidated net sales of
“As we enter the 2026 calendar year, our 94th year of operation, we are well-positioned and thankful for the continued hard work of our 3,149 talented and dedicated associates that support our iconic Ethan Allen brand. Recent product introductions are beginning to resonate with our clients as we operate our repositioned and refreshed 172 retail design centers throughout North America and more internationally. Our ability to offer relevant high-quality products, provide complimentary interior design service and manufacture
FISCAL 2026 SECOND QUARTER HIGHLIGHTS*
- Consolidated net sales of
$149.9 million ; prior year$157.3 million - Retail net sales of
$134.3 million ; same as prior year - Wholesale net sales of
$79.1 million ; prior year$86.8 million
- Retail net sales of
- Written orders
- Retail segment written orders
17.9% lower - Wholesale segment written orders decreased
19.3%
- Retail segment written orders
- Consolidated gross margin of
60.9% ; prior year60.3% - Selling, general and administrative expenses increased
1.5% over last year - Increased marketing spend by
25.2% to$4.9 million ; equals3.2% of consolidated net sales - Operating margin of
9.5% ; adjusted operating margin of9.0% ; adjusted prior year11.5% - Diluted EPS of
$0.46 ; adjusted diluted EPS of$0.44 ; adjusted prior year$0.59 - Paid total cash dividends of
$10.0 million or$0.39 per share in November 2025 - Capital expenditures were
$2.9 million ;$3.8 million a year ago - Ended the quarter with
$179.3 million in total cash and investments; no outstanding debt - Inventories, net totaled
$141.9 million at December 31, 2025, down0.1% from a year ago - Ended the quarter with total headcount of 3,149;
5.1% fewer than a year ago and30.7% less than December 2019 - Operated 172 Ethan Allen retail design centers in North America, including 142 Company-operated and 30 independently owned and operated; recently relocated the Company’s San Diego, California design center to a new, inviting and inspirational space
- In October 2025, the Company held its annual convention at its headquarters and livestreamed across the world; under the theme of Always Moving Forward, the program honored Ethan Allen’s history, reviewed 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 awarded Ethan Allen a “High Score” on their 2025 Wood Furniture Scorecard for its commitment to the use of sustainable wood in furniture manufacturing
- Ethan Allen’s upholstery operation in Silao, Mexico was recently awarded the Great Place to Work® certification for the eighth consecutive year; in addition to this designation, the Silao operation was recognized as “Empresa Socialmente Responsible” (Environmentally and Socially Responsible) for the seventh consecutive year
- Ethan Allen completed its climate-related financial risk report in December 2025, which summarizes the outcome of the climate risk assessment conducted across the Company’s operations in California
* See reconciliation of GAAP to adjusted key financial measures in the back of this release; comparisons are to the fiscal 2025 second quarter
KEY FINANCIAL MEASURES*
| (Unaudited) | ||||||||||||||
| (In thousands, except per share data) | ||||||||||||||
| Three months ended December 31, | Six months ended December 31, | |||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net sales | $ | 149,916 | $ | 157,260 | $ | 296,900 | $ | 311,597 | ||||||
| Gross profit | $ | 91,271 | $ | 94,837 | $ | 181,469 | $ | 188,706 | ||||||
| Gross margin | 60.9 | % | 60.3 | % | 61.1 | % | 60.6 | % | ||||||
| GAAP operating income | $ | 14,228 | $ | 18,157 | $ | 24,195 | $ | 35,722 | ||||||
| Adjusted operating income* | $ | 13,468 | $ | 18,163 | $ | 24,039 | $ | 35,960 | ||||||
| GAAP operating margin | 9.5 | % | 11.5 | % | 8.1 | % | 11.5 | % | ||||||
| Adjusted operating margin* | 9.0 | % | 11.5 | % | 8.1 | % | 11.5 | % | ||||||
| GAAP net income | $ | 11,744 | $ | 15,004 | $ | 22,195 | $ | 29,723 | ||||||
| Adjusted net income* | $ | 11,176 | $ | 15,008 | $ | 22,078 | $ | 29,900 | ||||||
| GAAP diluted EPS | $ | 0.46 | $ | 0.59 | $ | 0.87 | $ | 1.16 | ||||||
| Adjusted diluted EPS* | $ | 0.44 | $ | 0.59 | $ | 0.86 | $ | 1.17 | ||||||
| Cash flows from operating activities | $ | 15,005 | $ | 26,699 | ||||||||||
* 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 2026 totaled
Inventories, net totaled
Customer deposits from undelivered written orders totaled
No debt outstanding at December 31, 2025.
DIVIDENDS
On October 28, 2025, the Company’s Board of Directors declared a
CONFERENCE CALL
Ethan Allen will host a conference call today, January 28, 2026, at 5:00 p.m. 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 live conference call:
- U.S. Toll-Free: 877-705-2976
- International: 201-689-8798
- Conference ID: 13757116
An archived recording of the conference call will be available on the Company’s Investor Relations website referenced above for six months. A telephone replay will also be available for one month following the call.
ABOUT ETHAN ALLEN
Ethan Allen (NYSE:ETD), named America’s #1 Premium Furniture Retailer by Newsweek for three consecutive years, 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 2025 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, | |||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||
| Net sales | $ | 149,916 | $ | 157,260 | $ | 296,900 | $ | 311,597 | ||
| Cost of sales | 58,645 | 62,423 | 115,431 | 122,891 | ||||||
| Gross profit | 91,271 | 94,837 | 181,469 | 188,706 | ||||||
| Selling, general and administrative expenses | 77,858 | 76,674 | 157,555 | 152,746 | ||||||
| Restructuring and other charges, net of gains | (815 | ) | 6 | (281 | ) | 238 | ||||
| Operating income | 14,228 | 18,157 | 24,195 | 35,722 | ||||||
| Interest and other income, net | 1,549 | 2,029 | 5,647 | 4,227 | ||||||
| Interest and other financing costs | 60 | 63 | 119 | 123 | ||||||
| Income before income taxes | 15,717 | 20,123 | 29,723 | 39,826 | ||||||
| Income tax expense | 3,973 | 5,119 | 7,528 | 10,103 | ||||||
| Net income | $ | 11,744 | $ | 15,004 | $ | 22,195 | $ | 29,723 | ||
| Net income per diluted share | $ | 0.46 | $ | 0.59 | $ | 0.87 | $ | 1.16 | ||
| Diluted weighted average common shares | 25,608 | 25,625 | 25,618 | 25,622 | ||||||
| Ethan Allen Interiors Inc. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (Unaudited) | ||||||
| (In thousands) | ||||||
| December 31, | June 30, | |||||
| ASSETS | 2025 | 2025 | ||||
| Current assets | ||||||
| Cash and cash equivalents | $ | 64,274 | $ | 76,178 | ||
| Investments, short-term | 75,067 | 59,955 | ||||
| Accounts receivable, net | 4,494 | 6,066 | ||||
| Inventories, net | 141,936 | 140,893 | ||||
| Prepaid expenses and other current assets | 26,272 | 26,841 | ||||
| Total current assets | 312,043 | 309,933 | ||||
| Property, plant and equipment, net | 207,736 | 210,238 | ||||
| Goodwill | 25,388 | 25,388 | ||||
| Intangible assets | 19,740 | 19,740 | ||||
| Operating lease right-of-use assets | 107,908 | 109,173 | ||||
| Deferred income taxes | 325 | 369 | ||||
| Investments, long-term | 39,989 | 60,030 | ||||
| Other assets | 1,637 | 2,228 | ||||
| Total ASSETS | $ | 714,766 | $ | 737,099 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable and accrued expenses | $ | 23,189 | $ | 22,137 | ||
| Customer deposits | 63,566 | 75,068 | ||||
| Accrued compensation and benefits | 17,706 | 23,625 | ||||
| Current operating lease liabilities | 26,396 | 27,403 | ||||
| Other current liabilities | 4,988 | 4,618 | ||||
| Total current liabilities | 135,845 | 152,851 | ||||
| Operating lease liabilities, long-term | 94,751 | 96,263 | ||||
| Deferred income taxes | 2,483 | 2,054 | ||||
| Other long-term liabilities | 3,604 | 3,662 | ||||
| Total LIABILITIES | 236,683 | 254,830 | ||||
| Shareholders’ equity | ||||||
| Ethan Allen Interiors Inc. shareholders’ equity | 478,171 | 482,355 | ||||
| Noncontrolling interests | (88 | ) | (86 | ) | ||
| Total SHAREHOLDERS’ EQUITY | 478,083 | 482,269 | ||||
| Total LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 714,766 | $ | 737,099 | ||
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, | |||||||||||||||||
| 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||
| Consolidated Adjusted Operating Income / Operating Margin | ||||||||||||||||||
| GAAP Operating income | $ | 14,228 | $ | 18,157 | (21.6 | %) | $ | 24,195 | $ | 35,722 | (32.3 | %) | ||||||
| Adjustments (pre-tax)* | (760 | ) | 6 | (156 | ) | 238 | ||||||||||||
| Adjusted operating income* | $ | 13,468 | $ | 18,163 | (25.8 | %) | $ | 24,039 | $ | 35,960 | (33.2 | %) | ||||||
| Consolidated Net sales | $ | 149,916 | $ | 157,260 | (4.7 | %) | $ | 296,900 | $ | 311,597 | (4.7 | %) | ||||||
| GAAP Operating margin | 9.5 | % | 11.5 | % | 8.1 | % | 11.5 | % | ||||||||||
| Adjusted operating margin* | 9.0 | % | 11.5 | % | 8.1 | % | 11.5 | % | ||||||||||
| Consolidated Adjusted Net Income / Adjusted Diluted EPS | ||||||||||||||||||
| GAAP Net income | $ | 11,744 | $ | 15,004 | (21.7 | %) | $ | 22,195 | $ | 29,723 | (25.3 | %) | ||||||
| Adjustments, net of tax* | (568 | ) | 4 | (117 | ) | 177 | ||||||||||||
| Adjusted net income | $ | 11,176 | $ | 15,008 | (25.5 | %) | $ | 22,078 | $ | 29,900 | (26.2 | %) | ||||||
| Diluted weighted average common shares | 25,608 | 25,625 | 25,618 | 25,622 | ||||||||||||||
| GAAP Diluted EPS | $ | 0.46 | $ | 0.59 | (22.0 | %) | $ | 0.87 | $ | 1.16 | (25.0 | %) | ||||||
| Adjusted diluted EPS* | $ | 0.44 | $ | 0.59 | (25.4 | %) | $ | 0.86 | $ | 1.17 | (26.5 | %) | ||||||
* 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, | ||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||
| Beecher Falls, Vermont fire | $ | (813 | ) | $ | - | $ | (978 | ) | $ | - | ||
| Lease exit costs | - | - | 550 | - | ||||||||
| Severance and other charges | (2 | ) | 6 | 147 | 238 | |||||||
| Other non-restructuring charges | 55 | - | 125 | - | ||||||||
| Adjustments to operating income | $ | (760 | ) | $ | 6 | $ | (156 | ) | $ | 238 | ||
| Related income tax effects on non-recurring items(1) | 192 | (2 | ) | 39 | (61 | ) | ||||||
| Adjustments to net income | $ | (568 | ) | $ | 4 | $ | (117 | ) | $ | 177 | ||
(1) Calculated using the marginal tax rate for each period presented.
FAQ
What were Ethan Allen (ETD) fiscal 2026 Q2 net sales and EPS on January 28, 2026?
How much cash and investments did Ethan Allen (ETD) report at December 31, 2025?
What dividend did Ethan Allen (ETD) declare on January 27, 2026 and when is it payable?
How did written orders affect Ethan Allen (ETD) performance in Q2 fiscal 2026?
Why did Ethan Allen's (ETD) operating margin fall in fiscal 2026 Q2?
