DANBURY, Conn., Feb. 26, 2026 (GLOBE NEWSWIRE) -- Ethan Allen’s upholstery manufacturing plant in Silao, Guanajuato, Mexico, has once again been recognized as “Empresa Socialmente Responsible” (Environmentally and Socially Responsible), marking seven consecutive years of acknowledgment by the Mexican Center for Corporate Philanthropy and the Alliance for Corporate Social Responsibility. “Ethan Allen’s commitment to social responsibility and sustainability is exemplified by the efforts of our Silao upholster ...

Financial Performance - Consolidated net sales for the fiscal 2026 second quarter were $149.9 million, a 4.7% decrease from the prior year quarter, primarily due to fewer contract sales[132] - Adjusted operating margin decreased to 9.0% from 11.5% a year ago, driven by fewer contract sales and increased promotional activity[132] - Consolidated net sales decreased by $7.3 million or 4.7% for the three months ended December 31, 2025, compared to the prior year period, driven by fewer contract sales and lower delivered unit volume[140] - Wholesale net sales decreased by $7.7 million or 8.9% for the same period, primarily due to lower contract sales, including shipments to the U.S. government[141] - Retail net sales increased by $0.1 million or 0.1% for the three months ended December 31, 2025, supported by higher starting retail backlog and incremental designer floor sample sales[143] - Consolidated gross profit decreased by $3.6 million for the three months ended December 31, 2025, attributed to lower net sales and increased promotional activity[146] - Consolidated operating income decreased by $3.9 million or 21.6% for the three months ended December 31, 2025, with an operating margin of 9.5% compared to 11.5% in the prior year[156] - Net income for the three months ended December 31, 2025, was $11.7 million, down 21.7% from $15.0 million in the prior year[163] - Adjusted net income for the same period was $11.2 million, a decrease of 25.5% compared to $15.0 million a year ago[168] - Diluted EPS for the three months ended December 31, 2025, was $0.46, down 22.0% from $0.59 in the same period last year[164] Operational Metrics - Gross profit margin was 60.9%, reflecting a change in sales mix and selective price increases, compared to 60.3% in the prior year[135] - The company ended the quarter with 187 retail design centers, including 142 company-operated and 45 independently owned locations[132] - Employee count as of December 31, 2025, was 3,149, with a reduction of 5.1% in the last 12 months[131] - The company operates 11 manufacturing facilities, with approximately 75% of furniture manufactured in North America[129] - Retail written orders declined by 17.9%, while wholesale orders decreased by 19.3% compared to the previous year[135] - SG&A expenses increased by 1.5% for the three months ended December 31, 2025, with a percentage of sales rising to 51.9% from 48.8% in the prior year[149] - Retail operating income fell to $3.7 million for the three months ended December 31, 2025, down 43.9% from the prior year, with a margin of 2.8%[158] Cash and Liquidity - Cash, cash equivalents, and investments totaled $179.3 million at December 31, 2025, with no outstanding debt[132] - Total available liquidity as of December 31, 2025, was $300.5 million, down from $317.1 million at June 30, 2025[172] - Working capital increased to $176.2 million at December 31, 2025, compared to $157.1 million at June 30, 2025[172] - The company reported a current ratio of 2.3 at December 31, 2025, up from 2.0 at June 30, 2025[172] - Cash provided by operating activities was $15.0 million for the first six months of fiscal 2026, down from $26.7 million in the prior year, primarily due to lower net income and changes in working capital[178] - Capital expenditures for the first six months of fiscal 2026 were $5.3 million, a decrease from $7.4 million in the prior year, focused on new retail design centers and technology investments[186] - Total dividends paid during the first six months of fiscal 2026 amounted to $26.3 million, down from $30.1 million a year ago, with a special dividend reduced from $0.40 to $0.25 per share[180] - Cash used in financing activities was $28.4 million in the current year, compared to $32.5 million in the previous year, reflecting a decrease in dividend payments[180] Strategic Initiatives - The company aims to leverage its vertical integration and invest in new technologies to enhance operational efficiencies and maintain competitive advantages[130] - The company plans to open new design centers in Rancho Cucamonga, California, Aventura, Florida, and Vancouver, British Columbia, during 2026[145] - The company anticipates total capital expenditures to rebuild the structure damaged by the Beecher Falls fire to be between $2.5 million and $3.5 million, with $0.7 million incurred by December 31, 2025[187] Market and Economic Conditions - The company is exposed to a 25% tariff on upholstered wood products imported from Mexico due to recent tariffs effective October 2025[205] - Retail selling prices were increased in Q2 of fiscal 2026 to offset the impact of additional tariffs on raw materials and finished goods[206] - The company is exposed to market risks from changes in raw material costs, particularly wood, fabric, and foam products[207] - Inflationary impacts on product and operating costs are expected to be partially offset by the ability to increase retail selling prices[208] - The company does not engage in foreign currency hedging and does not expect material impacts from foreign currency exchange risks[204] - Approximately 75% of the furniture sold is manufactured in North America, providing a strategic advantage to mitigate tariff impacts[206]

Company Overview - Ethan Allen Interiors Inc. (ETD) has been under observation for nearly four months, with a shift from a cautious to a more optimistic stance regarding its stock performance [1]. Investment Background - The analyst has extensive experience in the logistics sector and stock investing, focusing on ASEAN and NYSE/NASDAQ stocks, particularly in banks, telecommunications, logistics, and hotels [1]. - The analyst began trading in the Philippine stock market in 2014, initially investing in blue-chip companies and later diversifying into various industries and market capitalizations [1]. Market Engagement - The analyst entered the US market in 2020, gaining insights through a relative's trading account before opening their own [1]. - The analyst has been utilizing analyses from Seeking Alpha to compare US market trends with those in the Philippine market since discovering the platform in 2018 [1].

Company Overview - Ethan Allen Interiors Inc. (ETD) has been under observation for nearly four months, with a shift from a cautious to a more optimistic stance regarding its stock performance [1]. Investment Background - The analyst has extensive experience in the logistics sector and stock investing, focusing on ASEAN and NYSE/NASDAQ stocks, particularly in banks, telecommunications, logistics, and hotels [1]. - The analyst began trading in the Philippine stock market in 2014, initially investing in blue-chip companies and later diversifying into various industries and market capitalizations [1]. Market Engagement - The analyst entered the US market in 2020, gaining insights through a relative's trading account before opening their own [1]. - The analyst has been utilizing analyses from Seeking Alpha to compare US market trends with those in the Philippine market since discovering the platform in 2018 [1].

Core Insights - Ethan Allen's fiscal Q2 results were significantly affected by a government shutdown, which led to reduced consumer confidence and lower retail orders, particularly in the contract segment [4][6][16] - Despite the decline in demand, the company reported an improvement in gross margin to 60.9%, up 60 basis points year-over-year, driven by a higher average ticket price and reduced headcount [5][7] - The company ended the quarter with a strong liquidity position, holding $179.3 million in cash and investments with no debt, and continued to return capital to shareholders through dividends [5][12] Order Activity - Retail written orders declined by 17.9% and wholesaler orders decreased by 19.3% compared to the previous year, with both metrics showing a sequential decline throughout the quarter [1][6] - The decline in orders was attributed to macroeconomic challenges and an 11% drop in design center traffic [1][4] Financial Performance - Consolidated net sales for the quarter were reported at $149.9 million, influenced by a higher starting retail backlog and fewer returns, although offset by lower demand and fewer contract sales [2] - Adjusted operating income was $13.5 million, resulting in an adjusted operating margin of 9%, compared to 5.4% in the pre-pandemic fiscal 2019 second quarter [8][10] Margin and Cost Management - The company faced pressures on operating margins due to fixed-cost deleveraging and increased promotional activities, but these were partially mitigated by expense controls, including headcount reductions [9][10] - The total number of associates decreased by 5.1% year-over-year, ending the quarter with 3,149 employees [9] Tariffs and Pricing Strategy - Recent Section 232 tariffs imposed a 25% tariff on fully manufactured upholstered wood products, with additional tariffs affecting non-U.S. manufactured goods [13][14] - To address tariff impacts, the company is implementing a three-part strategy, including vendor cost sharing, sourcing diversification, and selective retail price increases averaging about 5% on certain SKUs [18] Future Outlook - Management expressed optimism about maintaining margins and improving sales as government operations resume and consumer traffic increases [10][16] - The company operates 172 design centers in North America, with approximately 75% of its furniture produced domestically, emphasizing a vertically integrated model supported by technology [17][19]

分组1 - Ethan Allen reported quarterly earnings of $0.44 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, but down from $0.59 per share a year ago, resulting in an earnings surprise of +17.33% [1] - The company posted revenues of $149.92 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 1.53% and down from $157.26 million year-over-year [2] - Over the last four quarters, Ethan Allen has surpassed consensus EPS estimates two times and topped consensus revenue estimates only once [2] 分组2 - The stock has gained approximately 6.4% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $0.30 on revenues of $145.2 million, and for the current fiscal year, it is $1.65 on revenues of $610 million [7] - The Zacks Industry Rank for Retail - Home Furnishings is currently in the bottom 26% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - Consolidated net sales for the second quarter were $149.9 million, benefiting from a higher starting retail backlog and a higher average ticket price, but offset by fewer contract sales and lower demand [7] - Retail written orders declined by 17.9%, while wholesaler orders were down 19.3% compared to the previous year, reflecting macroeconomic challenges and a difficult prior year comparison [7] - Consolidated gross margin was 60.9%, an increase of 60 basis points from a year ago, attributed to a change in sales mix and reduced headcount [8] - Adjusted operating income was $13.5 million, with an operating margin of 9%, significantly higher than the 5.4% margin in the pre-pandemic second quarter of 2019 [8] - Adjusted diluted EPS was $0.44, with an effective tax rate of 25.3% [9] Business Line Data and Key Metrics Changes - Retail written orders showed a decline, with a notable decrease in design center traffic by 11% [7] - The wholesale backlog at the end of the quarter was $49.8 million, influenced by a lower volume of contract orders [8] Market Data and Key Metrics Changes - The company experienced a significant impact from the government shutdown, leading to lower consumer confidence and reduced traffic to design centers [4] - Positive written order growth was observed in January, indicating a potential recovery in consumer behavior [7][34] Company Strategy and Development Direction - The company aims to strengthen its vertically integrated structure, focusing on product programs, marketing, and logistics [13][16] - Approximately 75% of furniture is manufactured in North America, providing a competitive advantage and mitigating tariff exposure [12][13] - Increased advertising spend by 25%, primarily in digital media, is expected to yield future benefits despite not fully impacting the second quarter [15][36] Management's Comments on Operating Environment and Future Outlook - Management noted that the government shutdown had a major impact on orders, but there are signs of recovery as orders are beginning to come in again [21] - The company believes it can maintain strong gross margins due to improvements in talent and technology across its operations [22] - There is cautious optimism regarding consumer behavior returning to normal, with increased traffic noted in January [34] Other Important Information - The company has a robust balance sheet with total cash and investments of $179.3 million and no debt [9] - The company is exposed to tariffs on imported goods, with strategies in place to mitigate these costs through vendor cost sharing and selective price increases [11][30] Q&A Session Summary Question: Retail written orders trends during the quarter - Management acknowledged that retail written orders were impacted by difficult comparisons, with an average decrease of 18% throughout the quarter [19] Question: Improvement in contract side of the business post-government shutdown - Management reported that orders are coming in reasonably high but are lower than the previous year, with a gradual increase observed [21] Question: Sustainability of gross margins moving forward - Management expressed confidence in maintaining gross margins due to ongoing improvements in operations and technology [22] Question: Impact of tariffs and mitigation strategies - Management outlined a three-pronged approach to mitigate tariff impacts, including vendor cost sharing, sourcing diversification, and selective price increases [30][32] Question: January trends and marketing effectiveness - Management attributed improved trends in January to returning consumer confidence and effective marketing strategies [34][36]

Financial Data and Key Metrics Changes - Consolidated net sales for the second quarter were $149.9 million, benefiting from a higher starting retail backlog and a higher average ticket price, despite a decline in retail written orders by 17.9% and wholesaler orders by 19.3% compared to the previous year [7][8] - Consolidated gross margin was 60.9%, an increase of 60 basis points from a year ago, attributed to a favorable sales mix and reduced headcount [8] - Adjusted operating income was $13.5 million, with an operating margin of 9%, significantly higher than the 5.4% margin in the pre-pandemic second quarter of 2019 [8][9] - Adjusted diluted EPS was $0.44, with an effective tax rate of 25.3% [9] Business Line Data and Key Metrics Changes - Retail written orders declined 17.9%, while wholesaler orders decreased by 19.3%, reflecting macroeconomic challenges and a tough prior year comparison [7] - The wholesale backlog at the end of the quarter was $49.8 million, reduced due to lower contract orders and improved customer lead times [8] Market Data and Key Metrics Changes - Design center traffic declined by 11%, contributing to lower demand trends [7] - Positive written order growth was observed in January, indicating a potential recovery in consumer confidence [4][7] Company Strategy and Development Direction - The company aims to strengthen its vertically integrated structure, focusing on product programs, marketing, and logistics [13][16] - Approximately 75% of furniture is manufactured in North America, providing a competitive advantage and mitigating tariff exposure [12][13] - Increased advertising spend by 25%, primarily in digital media, to enhance customer engagement and drive traffic [15][36] Management's Comments on Operating Environment and Future Outlook - The government shutdown negatively impacted consumer confidence and retail traffic, but there are signs of recovery as traffic improved in January [4][34] - Management is optimistic about maintaining strong gross margins due to disciplined expense management and leveraging technology [22][32] Other Important Information - The company has a robust balance sheet with total cash and investments of $179.3 million and no debt [9][10] - The company declared a regular quarterly cash dividend of 39 cents per share, reflecting its commitment to returning value to shareholders [10] Q&A Session Summary Question: Retail written orders trends during the quarter - Management noted that retail written orders decelerated due to difficult comparisons, with an average decrease of 18% throughout the quarter [19] Question: Improvement in contract side of the business post-government shutdown - Orders are coming in reasonably high but are lower than last year, with a gradual increase observed as the government resumes operations [21] Question: Sustainability of gross margins moving forward - Management believes there is a good opportunity to maintain margins due to improvements in talent and technology across operations [22] Question: Impact of tariffs and mitigation strategies - The company is employing vendor cost sharing, sourcing diversification, and selective retail price increases to mitigate tariff impacts, though some headwinds remain [30][32] Question: Attribution of improved trends in January - Increased consumer traffic is attributed to the resolution of uncertainties from the previous quarter, leading to better engagement with clients [34] Question: Future marketing spend and its effectiveness - The company plans to continue focusing on digital marketing while reducing spending in other mediums, aiming to enhance customer acquisition and traffic [38]

Financial Data and Key Metrics Changes - Consolidated net sales for the second quarter were $149.9 million, impacted by lower consumer confidence and traffic due to the government shutdown, with retail written orders declining by 17.9% and wholesaler orders down 19.3% year-over-year [7][10] - Consolidated gross margin improved to 60.9%, up 60 basis points from the previous year, attributed to a favorable sales mix and reduced headcount [8][10] - Adjusted operating income was $13.5 million, with an operating margin of 9%, compared to 5.4% in the same quarter of 2019 [8][9] - Adjusted diluted EPS was $0.44, with an effective tax rate of 25.3% [10] Business Line Data and Key Metrics Changes - Retail written orders experienced a decline of 17.9%, while wholesaler orders decreased by 19.3%, reflecting a challenging comparison to the previous year [7][10] - The wholesale backlog at the end of the quarter was $49.8 million, influenced by a lower volume of contract orders [8] Market Data and Key Metrics Changes - Design center traffic declined by 11%, contributing to the overall decrease in demand [7] - Positive written order growth was observed in January, indicating a potential recovery in consumer behavior [7] Company Strategy and Development Direction - The company aims to strengthen its vertically integrated structure, focusing on product development, marketing, and logistics [14][16] - Approximately 75% of furniture is manufactured in North America, providing a competitive advantage and mitigating tariff exposure [12][13] - Increased marketing spend by 25%, primarily in digital media, is expected to yield future benefits despite not fully impacting the second quarter [15][36] Management's Comments on Operating Environment and Future Outlook - Management noted that the government shutdown significantly impacted results, but there are signs of recovery with improved traffic and orders in January [5][20] - The company is optimistic about maintaining strong gross margins due to disciplined expense management and operational improvements [22] Other Important Information - The company has a robust balance sheet with total cash and investments of $179.3 million and no debt [10][11] - A quarterly cash dividend of $10 million was declared, reflecting the company's commitment to returning value to shareholders [11] Q&A Session Summary Question: Retail written orders trends during the quarter - Management indicated that retail written orders averaged a decrease of 18% during the quarter, with a stronger start in October that decelerated due to the government shutdown and tough prior year comparisons [18][19] Question: Improvement in contract side of the business post-government shutdown - Management confirmed that new orders are coming in, albeit at a lower rate than the previous year, with a gradual increase observed [20] Question: Sustainability of gross margins moving forward - Management expressed confidence in maintaining gross margins due to improvements in talent and technology across operations [22] Question: Impact of tariffs and mitigation strategies - Management outlined a three-pronged approach to mitigate tariff impacts, including vendor cost sharing, sourcing diversification, and selective retail price increases [29][30] Question: January trends and consumer behavior - Management attributed improved trends in January to returning consumer confidence and effective engagement by interior designers [33] Question: Future marketing spend and its effectiveness - Management plans to continue focusing on digital marketing while reducing spending in other areas, emphasizing the importance of adapting to changing marketing mediums [36]

Financial Performance - Consolidated net sales for Q2 FY2026 were $149.9 million, down from $157.3 million in the prior year[3] - Adjusted operating income was $13.5 million, with an adjusted operating margin of 9.0%, down from 11.5% in the prior year[3] - Diluted EPS for the quarter was $0.46, with adjusted diluted EPS at $0.44, compared to $0.59 in the prior year[3] - Net sales for the three months ended December 31, 2025, were $149.916 million, a decrease of 4.7% compared to $157.260 million for the same period in 2024[21] - Operating income for the three months ended December 31, 2025, was $14.228 million, a decrease of 21.6% from $18.157 million in 2024[25] - Net income for the six months ended December 31, 2025, was $22.195 million, down 25.3% from $29.723 million in 2024[25] - Adjusted diluted EPS for the three months ended December 31, 2025, was $0.44, a decrease of 25.4% compared to $0.59 in 2024[25] - The company reported a GAAP operating margin of 9.5% for the three months ended December 31, 2025, compared to 11.5% in 2024[25] - Adjusted operating income for the three months ended December 31, 2025, was $13.468 million, a decline of 25.8% from $18.163 million in 2024[25] Cash and Investments - Total cash and investments at the end of the quarter were $179.3 million, with no outstanding debt[5][11] - Total current assets as of December 31, 2025, were $312.043 million, slightly up from $309.933 million as of June 30, 2025[22] - Total liabilities decreased to $236.683 million as of December 31, 2025, from $254.830 million as of June 30, 2025[22] - Shareholders' equity as of December 31, 2025, was $478.083 million, down from $482.269 million as of June 30, 2025[22] Sales and Orders - Written orders in the retail segment decreased by 17.9%, while wholesale segment written orders fell by 19.3%[3] - Customer deposits from undelivered written orders totaled $63.6 million, down from $75.1 million at the end of the previous quarter[10] Expenses and Dividends - Marketing expenses increased by 25.2% to $4.9 million, representing 3.2% of consolidated net sales[3] - A regular quarterly cash dividend of $0.39 per share was declared, payable on February 25, 2026[12] Workforce - The company operates 172 retail design centers, with a total headcount of 3,149, which is 5.1% lower than a year ago[8] Gross Margin - Gross margin improved to 60.9%, compared to 60.3% in the prior year[3] - Gross profit for the six months ended December 31, 2025, was $181.469 million, down from $188.706 million in 2024, reflecting a decline of 3.8%[21]