Ethan Allen Reports Decline in Net Sales and Profitability in Q1 Fiscal 2025

Ethan Allen Interiors Inc. reported its financial results for the first quarter of fiscal 2025, ending September 30, 2024, showing a decline in net sales and profitability compared to the same period in the previous year. Net sales decreased by 5.8% to $154.3 million, down from $163.9 million in the prior year, primarily due to lower unit volumes and reduced demand, exacerbated by external factors such as Hurricane Helene and a U.S. port strike. The wholesale segment experienced a more significant decline, with net sales falling 13.5% to $86.1 million, driven by a 54.3% decrease in contract sales.

Gross profit for the quarter was $93.9 million, a decrease of 6.3% from $100.1 million in the previous year, resulting in a gross margin of 60.8%, down 30 basis points year-over-year. Operating income also fell to $17.6 million, down 4.3% from $18.4 million, while net income slightly decreased to $14.7 million from $14.9 million, reflecting a 1.5% decline. Diluted earnings per share (EPS) were $0.57, compared to $0.58 in the prior year.

The company’s total assets as of September 30, 2024, were $737.7 million, a decrease from $744.9 million at the end of June 2024. Total current assets also declined, primarily due to reductions in cash and cash equivalents, which fell to $59.2 million from $69.7 million. Total liabilities increased slightly to $263.1 million, while total shareholders' equity decreased to $474.7 million.

Ethan Allen's strategic focus includes cost control measures, which contributed to a 5.3% reduction in selling, general, and administrative (SG&A) expenses, totaling $76.1 million. The company also reported a decrease in its workforce by 8.5%, or 312 employees, as part of its restructuring efforts.

In terms of dividends, the company declared a special cash dividend of $0.40 per share, down from $0.50 in the previous year, alongside a regular quarterly dividend of $0.39 per share, an increase from $0.36. The company maintains a strong liquidity position with total available liquidity of $307.3 million and no outstanding debt.

Ethan Allen operates 142 retail design centers in the U.S. and Canada, with additional locations internationally. The company continues to face challenges from market conditions, including inflationary pressures on raw materials and transportation costs, but aims to offset these through price increases and operational efficiencies.