Ethan Allen Reports Positive Fiscal 2025 Third Quarter Results Despite Challenging Environment
- Strong gross margin of 61.2%, maintaining profitability
- Solid cash position of $183.0 million with zero debt
- Generated $10.2 million in operating cash flow
- Continued dividend payments with $0.39 quarterly dividend
- 75% of furniture manufactured in North American facilities, providing strategic advantage
- Wholesale net sales increased to $99.0 million from $89.8 million year-over-year
- Consolidated net sales declined to $142.7 million from $146.4 million year-over-year
- Wholesale written orders declined 11.2%
- Retail written orders decreased 13.0%
- Adjusted operating margin decreased to 8.0% from 10.0% last year
- Adjusted diluted EPS declined to $0.38 from $0.48 year-over-year
- Operating cash flow decreased to $10.2 million from $23.7 million in prior year
Insights
Ethan Allen maintains strong margins and cash position despite sales decline and industry headwinds, demonstrating operational resilience with zero debt.
Ethan Allen's Q3 fiscal 2025 results reveal a company navigating challenging economic conditions with relative strength. The furniture retailer reported
The company's profitability metrics show some compression, with adjusted operating margin at
What stands out is Ethan Allen's exceptionally strong balance sheet. The
The operational data presents a mixed picture. Written orders declined substantially (Wholesale:
Ethan Allen's technology investments have enabled a
Ethan Allen leverages vertical integration and premium positioning to maintain margins despite significant declines in written orders amid housing market challenges.
Ethan Allen's Q3 results highlight a company effectively leveraging its business model to withstand significant industry headwinds. The
The company's vertical integration strategy—manufacturing approximately
Ethan Allen's network of 174 North American retail design centers, including newly opened locations in Wisconsin and Canada, continues to differentiate through its combination of interior design services with technology. This service-oriented approach aligns with the company's premium market positioning, evidenced by their recognition as "America's #1 Premium Furniture Retailer" by Newsweek.
The company's technological investments have yielded substantial operational efficiencies, enabling a
While Ethan Allen's adjusted operating margin of
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
“We are pleased with our third quarter results, which produced a strong gross margin, positive operating cash flow and total cash and investments of
“For the quarter ended March 31, 2025, we reported consolidated net sales of
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
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
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 million - Retail net sales of
$117.6 million ; prior year$122.6 million
- Wholesale net sales of
- Written orders
- Wholesale segment written orders declined
11.2% - Retail segment written orders decreased
13.0%
- Wholesale segment written orders declined
- Consolidated gross margin of
61.2% ; prior year61.3% - Operating margin of
7.7% ; adjusted operating margin of8.0% compared with10.0% last year - Advertising expenses were equal to
3.4% of consolidated net sales, consistent with the prior year - Diluted EPS of
$0.37 ; adjusted diluted EPS of$0.38 compared with$0.48 last year - Generated
$10.2 million of cash from operating activities; prior year$23.7 million - Paid cash dividends totaling
$10.0 million or$0.39 per share, up8.3% from a year ago - Ended the quarter with
$183.0 million in total cash and investments with no outstanding debt - Inventory 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 and35.7% less than March 2019 - Operated 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 America
- Opened 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 technology
- For 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 ended | Nine 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
Cash from operating activities totaled
Cash dividends paid during fiscal 2025 totaled
Inventories, net totaled
Customer deposits from undelivered written orders totaled
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
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: 877-705-2976
- International Participants: 201-689-8798
- Meeting 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
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 March 31, | Nine months ended March 31, | ||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||
| Net sales | $ | 142,695 | $ | 146,421 | $ | 454,292 | $ | 477,589 | |
| Cost of sales | 55,339 | 56,597 | 178,230 | 186,988 | |||||
| Gross profit | 87,356 | 89,824 | 276,062 | 290,601 | |||||
| Selling, general and administrative expenses | 76,253 | 75,253 | 228,999 | 234,734 | |||||
| Restructuring and other charges, net of gains | 106 | (754 | ) | 344 | 503 | ||||
| Operating income | 10,997 | 15,325 | 46,719 | 55,364 | |||||
| Interest and other income, net | 1,599 | 2,037 | 5,826 | 5,541 | |||||
| Interest and other financing costs | 60 | 64 | 183 | 177 | |||||
| Income before income taxes | 12,536 | 17,298 | 52,362 | 60,728 | |||||
| Income tax expense | 2,931 | 4,345 | 13,034 | 15,425 | |||||
| Net income | $ | 9,605 | $ | 12,953 | $ | 39,328 | $ | 45,303 | |
| Net income per diluted share | $ | 0.37 | $ | 0.50 | $ | 1.53 | $ | 1.77 | |
| Diluted 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 | % Change | |||||||||||||
| Consolidated Adjusted Operating Income / Operating Margin | ||||||||||||||||||
| GAAP 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 EPS | ||||||||||||||||||
| GAAP 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.
FAQ
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