Ethan Allen Reports Fiscal 2025 First Quarter Results

Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”), a leading interior design destination, reported its results for the fiscal 2025 first quarter ended September 30, 2024.

Farooq Kathwari, Ethan Allen’s Chairman, President and CEO commented, “We are pleased with our first quarter financial and operating results amid the challenging economic environment. We continue to strengthen various areas of our vertically integrated enterprise, including our talent, product offerings, marketing, retail network, manufacturing, logistics, technology and social responsibility.”

“For the quarter ended September 30, 2024, we reported consolidated net sales of $154.3 million, gross margin of 60.8%, operating income of $17.6 million, operating margin of 11.4% and adjusted diluted EPS of $0.58. We continued strong cash generation and ended the quarter with total cash and investments of $186.4 million, up $23.2 million from a year ago. During the first quarter of fiscal 2025, we paid $20.2 million in cash dividends, which included $10.2 million in special cash dividends. We are also pleased to announce that yesterday our Board approved a regular quarterly cash dividend of $0.39 per share, payable on November 27, 2024.”

Mr. Kathwari continued, “Strengthening our team and investing in technology is a game changer. These two important factors have helped us to operate more efficiently. As of September 30, 2024, our headcount was 8.5% lower than a year ago and has been reduced by 27.9% since September 30, 2019.”

“As previously disclosed, one of our distribution centers located in Old Fort, North Carolina was impacted in September by significant flooding from Hurricane Helene. The disruption impacted shipments and we suffered a loss of $0.3 million related to damaged inventory and remediation costs. Restoration efforts have helped our distribution center resume normal shipping and receiving capacity.”

“We look forward to continued progress and remain cautiously optimistic,” concluded Mr. Kathwari.

Fiscal 2025 First Quarter Highlights*

• Consolidated net sales of $154.3 million compared with $163.9 million a year ago
  • Retail net sales of $132.8 million compared with $133.6 million
  • Wholesale net sales of $86.1 million compared with $99.4 million
• Written order trends
  • Retail segment written orders were lower by 6.8%
  • Wholesale segment written orders declined by 4.8%
• Consolidated gross margin of 60.8% compared with 61.1% last year
• Operating margin of 11.4%; adjusted operating margin of 11.5% compared with 12.1% last year primarily due to fixed cost deleveraging from lower sales
• Advertising expenses were equal to 2.3% of consolidated net sales, up from 2.0% in the prior year
• Diluted EPS of $0.57 compared with $0.58; adjusted diluted EPS of $0.58
• Generated $15.1 million of cash from operating activities compared with $16.7 million a year ago
• Paid cash dividends totaling $20.2 million, which included a $0.40 per share special cash dividend and a regular quarterly cash dividend of $0.39 per share
• Ended the quarter with $186.4 million in total cash and investments with no debt outstanding
• Reduced inventory carrying levels to $143.2 million at September 30, 2024, down $6.4 million from a year ago
• Ended the quarter with 3,347 total employees, down 8.5% from a year ago and 27.9% less than at September 30, 2019
• Named America’s Best Premium Furniture Retailer for the second consecutive year by Newsweek
• Operated 173 Ethan Allen retail design centers in North America as of September 30, 2024, including 142 Company-operated and 31 independently owned and operated locations; the Company also has design centers outside of North America
• Ethan Allen’s western North Carolina distribution center sustained flooding from Hurricane Helene in September 2024 that resulted in a pre-tax charge of $0.3 million and a temporary disruption in shipments; employees have returned to work and normal operating capacity has resumed with an expected recovery from the delayed shipments during the second quarter of fiscal 2025

* See reconciliation of GAAP to adjusted key financial measures in the back of this release. Comparisons are to the fiscal 2024 first quarter.

Balance Sheet and Cash Flow

Cash and investments totaled $186.4 million at September 30, 2024, compared with $195.8 million at June 30, 2024. The decrease was due to $20.2 million in cash dividends paid and capital expenditures of $3.6 million partially offset by $15.1 million in cash generated from operating activities.

Cash from operating activities totaled $15.1 million during the first quarter of fiscal 2025, a decrease from $16.7 million in the prior year due to lower net income and changes in working capital.

Cash dividends paid were $20.2 million, which included a special cash dividend of $10.2 million, or $0.40 per share, and a regular quarterly cash dividend of $10.0 million, or $0.39 per share.

Inventories, net totaled $143.2 million at September 30, 2024, compared with $142.0 million at June 30, 2024.

Customer deposits from undelivered written orders totaled $74.1 million at September 30, 2024, comparable with $73.5 million at June 30, 2024. Wholesale backlog was $63.9 million at September 30, 2024, down 15.2% from a year ago, but up $10.4 million from June 30, 2024 due to the timing of incoming contract orders.

No debt outstanding at September 30, 2024.

Dividends

On July 30, 2024, the Company’s Board of Directors declared a $0.40 per share special cash dividend and a regular quarterly cash dividend of $0.39 per share, which were both paid on August 29, 2024. Ethan Allen has a long history of returning capital to shareholders and is pleased to pay a special cash dividend for the fourth consecutive year, which highlights the Company’s strong balance sheet and operating results. 

More recently, on October 29, 2024, the Board of Directors declared a regular quarterly cash dividend of $0.39 per share, payable on November 27, 2024 to shareholders of record as of November 12, 2024.

For full results click here.

About Ethan Allen

Ethan Allen (NYSE:ETD), recently named America’s #1 Premium Furniture Retailer and among America’s Top 10 Retailers by Newsweek, is a leading interior design destination combining state-of-the-art technology with personal service. Our design centers, which represent a mix of independent licensees and Company-owned and operated 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, we manufacture about 75% of our custom-crafted products in our North American manufacturing facilities and have been recognized for product quality and craftsmanship since 1932. Learn more at www.ethanallen.com and follow us on Facebook, Instagram, and LinkedIn.

Contact:

Matt McNulty – Senior Vice President, CFO and Treasurer – IR@ethanallen.com

Source: Ethan Allen Interiors Inc.