Ethan Allen Interiors recently released its 10-K report, providing an in-depth look at the company's financial performance and operations. The company operates as an interior design company, manufacturer, and retailer of home furnishings in the United States, Mexico, Honduras, and Canada, with two segments: Wholesale and Retail. Its products include case goods items, upholstery, and home accent items, marketed and sold under the Ethan Allen brand through various channels.
The Management’s Discussion and Analysis of Financial Condition and Results of Operations section provides insight into the company's performance. In fiscal 2024, Ethan Allen reported consolidated net sales of $646.2 million, representing an 18.3% decrease compared to the prior year. The company's gross margin remained steady at 60.8%, with benefits from lower raw material input costs and reduced headcount offsetting lower delivered unit volumes.
The company's Wholesale segment experienced a 17.5% decrease in net sales, primarily driven by lower incoming written orders and a decline in delivered unit volume. Wholesale written orders were down 10.9% in fiscal 2024, reflecting softening in the home furnishings market and other economic factors. However, Ethan Allen's Wholesale backlog at the end of the fiscal year was down 27.7% from the previous year but is now more reflective of historical norms and near pre-pandemic levels.
In the Retail segment, net sales from Company-operated design centers decreased by 18.4% in fiscal 2024, with a decline in delivered unit volume and lower written orders contributing to the decrease. Retail written orders declined by 8.4% year over year, reflecting weaker traffic and softening consumer interest in home furnishings. Despite these challenges, the company's gross margin remained relatively stable.
Ethan Allen's fiscal 2024 financial year was marked by double-digit operating margins, disciplined expense management, and strong operating cash flow. The company ended the year with a strong balance sheet, including $195.8 million in cash, cash equivalents, and investments, with no outstanding debt. Additionally, the company's Board increased its regular quarterly cash dividend by 8.3% to $0.39 per share and declared a special cash dividend of $0.50 per share, totaling $50.3 million in dividends paid during the fiscal year.
The 10-K report provides a comprehensive overview of Ethan Allen Interiors' financial performance, highlighting the challenges faced by the company in a softer demand environment and its strategies for navigating these challenges while maintaining a strong financial position. The market has reacted to these announcements by moving the company's shares 4.5% to a price of $31.08. For the full picture, make sure to review Ethan Allen Interiors's 10-K report.
