ETHAN ALLEN INTERIORS INC. has recently released its 10-K report, providing a comprehensive overview of the company's performance and operations. The company operates as an interior design company, manufacturer, and retailer of home furnishings in the United States and internationally, with two segments: Wholesale and Retail. Its product offerings include case goods, upholstery, window treatments, and drapery hardware, among others. The company also provides third-party furniture protection plans and other miscellaneous products, marketed under the Ethan Allen brand through design centers and independent retailers, as well as online at ethanallen.com.
In the 10-K report, the Management’s Discussion and Analysis of Financial Condition and Results of Operations provides insights into the company's performance. In fiscal 2025, Ethan Allen Interiors Inc. reported consolidated net sales of $614.6 million, down 4.9% compared to the previous year. The company's consolidated gross margin was 60.5%, slightly down from 60.8% in the prior year. The company's adjusted operating margin was 10.2%, down from 12.1% in the prior year, primarily due to lower unit sales partially offset by disciplined cost management and gross margin preservation. Adjusted diluted earnings per share were $2.04, down from $2.49 in the prior year.
Ethan Allen Interiors Inc. operates 142 retail design centers, with 137 located in the U.S. and five in Canada. The company also owns and operates eleven manufacturing facilities, including four manufacturing plants, one sawmill, one rough mill, and a kiln dry lumberyard in the U.S., three upholstery manufacturing plants in Mexico, and one case goods manufacturing plant in Honduras.
The company's financial performance in fiscal 2025 was highlighted by strong margins, positive operating cash flow of $61.7 million, and a robust balance sheet, with cash, cash equivalents, and investments totaling $196.2 million at June 30, 2025. Despite operating in a challenging environment characterized by lower consumer confidence, a weak housing market, and uncertainty surrounding global trade policies including tariffs, the company remains confident in the strength of its vertically integrated business model.
Ethan Allen Interiors Inc.'s Wholesale net sales decreased 3.2% compared to the prior year, primarily due to a decline in contract sales partially offset by an increase in intersegment sales to the company-operated design centers. Retail net sales from Company-operated design centers decreased 3.2% during fiscal 2025 compared to the prior year, primarily from reduced delivered unit volumes, lower written orders, less available backlog, lower designer floor sample sales, and decreased premier home delivery revenue, partially offset by an increase in average ticket price.
The company's consolidated gross profit in fiscal 2025 decreased 5.3% compared with the prior year due primarily to the 4.9% decline in consolidated net sales, increased promotional levels, and higher financing costs. The consolidated gross margin was 60.5%, a 30-basis point decline over the prior year due to lower unit volume sales and higher financing costs, partially offset by a change in sales mix, lower raw material and freight input costs, reduced headcount, fewer designer floor sample sales, and selective price increases which contributed to a higher average ticket price.
Following these announcements, the company's shares moved 4.24%, and are now trading at a price of $30.03. For the full picture, make sure to review ETHAN ALLEN INTERIORS INC's 10-K report.
