Ethan Allen Interiors Inc. (ETD) Q1 2026 Earnings Call Transcript
Written Sales Increased by 5.2% year-over-year. This growth was attributed to improved order conversion, increased promotional activities, the strength of the brand, client loyalty, new product introductions, and additional marketing efforts.
Consolidated Net Sales $147 million, with higher average ticket prices and designer floor sample sales offset by lower delivered unit volumes, reduced traffic, and fewer contract sales.
Wholesale Orders Decreased by 7.1% year-over-year due to lower contract business, including reductions in government spending.
Wholesale Backlog $53.5 million, reduced year-over-year due to lower contract orders and improved customer lead times. However, it increased by $4.7 million in the last 3 months due to the timing of incoming contract orders.
Gross Margin 61.4%, driven by a change in sales mix, lower raw material input costs, selective price increases, lower headcount, and a higher average retail ticket price. This was partially offset by increased promotional activities, elevated designer floor sales, and higher inbound freight, including incremental tariffs.
Adjusted Operating Margin 7.2%, impacted by fixed cost deleveraging from lower delivered sales, increased promotional activity, additional marketing, higher occupancy costs from new design centers, and sales of floor inventory. This was partially offset by disciplined control of operating expenses, including reduced headcount.
Headcount 3,189 at quarter-end, a decrease of 4.7% year-over-year due to operational efficiencies and streamlined workflows.
Adjusted Diluted EPS $0.43, with an effective tax rate of 25.4%, influenced by state taxes.
Operating Cash Flow $16.8 million, driven by lower inventory levels and higher customer deposits.
Capital Expenditures $2.4 million, primarily for retail design center build-outs and investments in technology.
Cash and Investments $193.7 million, with no debt.
Dividends Paid $16.4 million in cash dividends, including a special cash dividend of $0.25 per share and a regular quarterly cash dividend of $0.39 per share.
Marketing Costs Increased by 44%, rising from 2.4% of net sales last year to 3.4% in the current period, attributed to national marketing initiatives.
Trade with 70% Backtested Accuracy
Analyst Views on ETD
About ETD
About the author
Ethan Allen Interiors Declares Quarterly Dividend
- Quarterly Dividend Announcement: Ethan Allen Interiors declares a quarterly dividend of $0.39 per share, with an annualized yield of 6.46%, reflecting the company's stability and commitment to shareholder returns in the current economic climate.
- Dividend Payment Schedule: The dividend will be payable on February 25, with a record date of February 11 and an ex-dividend date also on February 11, ensuring shareholders receive their earnings promptly.
- Financial Performance Overview: In the latest earnings report, Ethan Allen's non-GAAP EPS of $0.44 exceeded expectations by $0.06, while revenue of $149.9 million fell short of estimates by $2.35 million, indicating market challenges.
- Digital Marketing Growth: Ethan Allen plans to increase its digital marketing budget by 25% amid tariff pressures, aiming to enhance brand visibility and market share in a competitive environment.
Ethan Allen Q2 2026 Earnings Call Insights
- Sales Decline: Ethan Allen reported consolidated net sales of $149.9 million in Q2, reflecting a decline primarily due to the government shutdown, which lowered consumer confidence and retail orders, particularly from U.S. government contracts.
- Increased Advertising Spend: The company raised its advertising expenditure by 25%, focusing mainly on digital media; although the full benefits were not realized in Q2 due to economic slowdowns, future positive impacts are anticipated.
- Order Trends: Retail written orders fell by 17.9% year-over-year, while wholesale orders decreased by 19.3%, indicating weak demand; however, management noted positive written order growth in January, suggesting an improved demand environment.
- Gross Margin Stability: Despite challenges, Ethan Allen maintained a gross margin of 60.9%, up 60 basis points from last year, attributed to changes in sales mix and higher average ticket prices, demonstrating the company's resilience in maintaining profitability amid adversity.
Ethan Allen Interiors to Announce Q2 Earnings on January 28
- Earnings Announcement Schedule: Ethan Allen Interiors (ETD) is set to release its Q2 2023 earnings report on January 28 after market close, with consensus EPS estimate at $0.38 and revenue at $152.25 million, indicating investor focus on the company's performance.
- Performance Expectation Analysis: Over the past two years, ETD has beaten EPS and revenue estimates 50% of the time, reflecting a degree of stability in uncertain market conditions, although recent downward revisions of two in both EPS and revenue forecasts raise concerns.
- Market Investment Dynamics: The lack of upward revisions in EPS and revenue estimates over the last three months suggests a cautious market sentiment regarding the company's future growth, which could impact investor confidence and stock performance.
- Sales Growth Signals: Despite facing cautious demand, Ethan Allen is increasing its marketing investment and reported a 5.2% written sales growth, demonstrating the company's determination and strategy to seek growth amid challenges.
Peter Lynch's Top Consumer Discretionary Stocks from Validea - November 25, 2025
Top Rated Consumer Discretionary Stocks: The article highlights top-rated Consumer Discretionary stocks according to Validea's P/E/Growth Investor model, which is based on Peter Lynch's investment strategy focusing on reasonable pricing relative to earnings growth and strong balance sheets.
Lululemon Athletica Inc: Lululemon is rated 93% based on its fundamentals and valuation, indicating strong interest, and operates in the technical athletic apparel market across various global regions.
Dick's Sporting Goods Inc: Rated 91%, Dick's Sporting Goods is an omni-channel retailer with a diverse product range and operates over 3,200 stores globally, reflecting strong fundamentals and valuation.
NVR Inc and Monarch Casino & Resort Inc: Both companies are rated 91%, with NVR engaged in homebuilding and mortgage banking, while Monarch operates casinos and resorts, showcasing strong fundamentals in their respective industries.
Ethan Allen Receives Great Place to Work® Mexico Certification for the 8th Year in a Row
Ethan Allen's Recognition: Ethan Allen's upholstery operations in Silao, Mexico, have achieved the Great Place to Work® Mexico certification for the eighth consecutive year, highlighting their commitment to an outstanding employee experience.
Company Culture: The certification reflects the company's culture of dignity and respect, as emphasized by CEO Farooq Kathwari, showcasing the importance of employee well-being and community involvement.
Employee Benefits: Associates in Silao benefit from on-site medical services, daily transportation, and affordable meals, while also engaging in community initiatives like blood drives and holiday gift distributions.
Corporate Social Responsibility: Ethan Allen's Silao operations have been recognized as "Empresa Socialmente Responsable" for their environmental and social responsibility efforts, further solidifying their commitment to corporate philanthropy.
Zacks Names Robinhood Markets as Bull of the Day and Ethan Allen Interiors as Bear of the Day
Robinhood Markets: Robinhood has emerged as a leading stock in the current bull market, showcasing strong revenue growth and profitability while expanding its services into banking and asset management. The stock has a Zacks Rank #1 (Strong Buy) and is expected to continue its upward trend, with earnings projected to rise significantly over the next few years.
Ethan Allen Interiors Inc.: Ethan Allen is struggling due to a challenging home furnishings market, with persistent pressure from trade tensions and a sluggish housing market. The stock has a Zacks Rank #5 (Strong Sell) as analysts have sharply cut earnings estimates, indicating a negative outlook for the company.
Opendoor Technologies Inc.: Under new leadership, Opendoor is transforming into a software-driven platform for residential real estate, focusing on AI and automation to improve efficiency. Despite a decline in revenue due to its legacy model, the company is showing signs of recovery and has a Zacks Rank #3 (Hold), with potential for future profitability.
Competitive Landscape: Opendoor faces increasing competition from Zillow and Offerpad, both of which are enhancing their platforms with AI technologies. As the proptech landscape evolves, maintaining execution speed and cost efficiency will be crucial for Opendoor to stay competitive.
Ethan Allen Interiors Declares Quarterly Dividend
- Quarterly Dividend Announcement: Ethan Allen Interiors declares a quarterly dividend of $0.39 per share, with an annualized yield of 6.46%, reflecting the company's stability and commitment to shareholder returns in the current economic climate.
- Dividend Payment Schedule: The dividend will be payable on February 25, with a record date of February 11 and an ex-dividend date also on February 11, ensuring shareholders receive their earnings promptly.
- Financial Performance Overview: In the latest earnings report, Ethan Allen's non-GAAP EPS of $0.44 exceeded expectations by $0.06, while revenue of $149.9 million fell short of estimates by $2.35 million, indicating market challenges.
- Digital Marketing Growth: Ethan Allen plans to increase its digital marketing budget by 25% amid tariff pressures, aiming to enhance brand visibility and market share in a competitive environment.
Ethan Allen Q2 2026 Earnings Call Insights
- Sales Decline: Ethan Allen reported consolidated net sales of $149.9 million in Q2, reflecting a decline primarily due to the government shutdown, which lowered consumer confidence and retail orders, particularly from U.S. government contracts.
- Increased Advertising Spend: The company raised its advertising expenditure by 25%, focusing mainly on digital media; although the full benefits were not realized in Q2 due to economic slowdowns, future positive impacts are anticipated.
- Order Trends: Retail written orders fell by 17.9% year-over-year, while wholesale orders decreased by 19.3%, indicating weak demand; however, management noted positive written order growth in January, suggesting an improved demand environment.
- Gross Margin Stability: Despite challenges, Ethan Allen maintained a gross margin of 60.9%, up 60 basis points from last year, attributed to changes in sales mix and higher average ticket prices, demonstrating the company's resilience in maintaining profitability amid adversity.
Ethan Allen Interiors to Announce Q2 Earnings on January 28
- Earnings Announcement Schedule: Ethan Allen Interiors (ETD) is set to release its Q2 2023 earnings report on January 28 after market close, with consensus EPS estimate at $0.38 and revenue at $152.25 million, indicating investor focus on the company's performance.
- Performance Expectation Analysis: Over the past two years, ETD has beaten EPS and revenue estimates 50% of the time, reflecting a degree of stability in uncertain market conditions, although recent downward revisions of two in both EPS and revenue forecasts raise concerns.
- Market Investment Dynamics: The lack of upward revisions in EPS and revenue estimates over the last three months suggests a cautious market sentiment regarding the company's future growth, which could impact investor confidence and stock performance.
- Sales Growth Signals: Despite facing cautious demand, Ethan Allen is increasing its marketing investment and reported a 5.2% written sales growth, demonstrating the company's determination and strategy to seek growth amid challenges.
Peter Lynch's Top Consumer Discretionary Stocks from Validea - November 25, 2025
Top Rated Consumer Discretionary Stocks: The article highlights top-rated Consumer Discretionary stocks according to Validea's P/E/Growth Investor model, which is based on Peter Lynch's investment strategy focusing on reasonable pricing relative to earnings growth and strong balance sheets.
Lululemon Athletica Inc: Lululemon is rated 93% based on its fundamentals and valuation, indicating strong interest, and operates in the technical athletic apparel market across various global regions.
Dick's Sporting Goods Inc: Rated 91%, Dick's Sporting Goods is an omni-channel retailer with a diverse product range and operates over 3,200 stores globally, reflecting strong fundamentals and valuation.
NVR Inc and Monarch Casino & Resort Inc: Both companies are rated 91%, with NVR engaged in homebuilding and mortgage banking, while Monarch operates casinos and resorts, showcasing strong fundamentals in their respective industries.
Ethan Allen Receives Great Place to Work® Mexico Certification for the 8th Year in a Row
Ethan Allen's Recognition: Ethan Allen's upholstery operations in Silao, Mexico, have achieved the Great Place to Work® Mexico certification for the eighth consecutive year, highlighting their commitment to an outstanding employee experience.
Company Culture: The certification reflects the company's culture of dignity and respect, as emphasized by CEO Farooq Kathwari, showcasing the importance of employee well-being and community involvement.
Employee Benefits: Associates in Silao benefit from on-site medical services, daily transportation, and affordable meals, while also engaging in community initiatives like blood drives and holiday gift distributions.
Corporate Social Responsibility: Ethan Allen's Silao operations have been recognized as "Empresa Socialmente Responsable" for their environmental and social responsibility efforts, further solidifying their commitment to corporate philanthropy.
Zacks Names Robinhood Markets as Bull of the Day and Ethan Allen Interiors as Bear of the Day
Robinhood Markets: Robinhood has emerged as a leading stock in the current bull market, showcasing strong revenue growth and profitability while expanding its services into banking and asset management. The stock has a Zacks Rank #1 (Strong Buy) and is expected to continue its upward trend, with earnings projected to rise significantly over the next few years.
Ethan Allen Interiors Inc.: Ethan Allen is struggling due to a challenging home furnishings market, with persistent pressure from trade tensions and a sluggish housing market. The stock has a Zacks Rank #5 (Strong Sell) as analysts have sharply cut earnings estimates, indicating a negative outlook for the company.
Opendoor Technologies Inc.: Under new leadership, Opendoor is transforming into a software-driven platform for residential real estate, focusing on AI and automation to improve efficiency. Despite a decline in revenue due to its legacy model, the company is showing signs of recovery and has a Zacks Rank #3 (Hold), with potential for future profitability.
Competitive Landscape: Opendoor faces increasing competition from Zillow and Offerpad, both of which are enhancing their platforms with AI technologies. As the proptech landscape evolves, maintaining execution speed and cost efficiency will be crucial for Opendoor to stay competitive.
