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Ethan Allen(ETD) - 2025 Q4 - Annual Results
Ethan AllenEthan Allen(US:ETD)2025-07-30 20:16

Introduction and Executive Summary Ethan Allen Interiors Inc. reports fiscal 2025 results, highlighting vertical integration, strategic focus, and key financial performance Company Overview and Strategic Focus Ethan Allen operates a vertically integrated enterprise, manufacturing approximately 75% of its furniture in North America, and has been recognized as America's 1 Premium Furniture Retailer - Ethan Allen operates a vertically integrated enterprise, manufacturing approximately 75% of its furniture in North American facilities2 - Strategic focus areas include talent, service, marketing, technology, and social responsibility2 - Named America's 1 Premium Furniture Retailer by Newsweek for the third year in a row3 Q4 and Full Year 2025 Performance Summary For Q4 FY2025, Ethan Allen reported consolidated net sales of $160.4 million, a gross margin of 59.9%, and adjusted diluted EPS of $0.49 Fiscal 2025 Fourth Quarter Key Financials | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :----------------------- | :---------- | :---------- | :----- | | Consolidated Net Sales | $160.4M | $168.6M | -4.9% | | Gross Margin | 59.9% | 60.8% | -0.9 pp | | Adjusted Operating Income | $15.6M | N/A | N/A | | Adjusted Operating Margin | 9.7% | 13.1% | -3.4 pp | | Adjusted Diluted EPS | $0.49 | $0.70 | -30.0% | | Operating Cash Flow | $24.8M | $26.2M | -5.3% | - Retail segment written orders increased 1.6% in Q4 FY202524 - Declared a special cash dividend of $0.25 per share and a regular quarterly cash dividend of $0.39 per share, both payable on August 28, 20252 Fiscal 2025 Fourth Quarter Highlights Review of Ethan Allen's Q4 FY2025 financial and operational performance, including sales, margins, and written orders Key Financial Metrics (Q4) For the fourth quarter of fiscal 2025, consolidated net sales decreased by 4.9% to $160.4 million, with gross margin at 59.9% and adjusted diluted EPS at $0.49 Q4 FY2025 Financial Performance | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :----------------------- | :---------- | :---------- | :----- | | Consolidated Net Sales | $160.4 million | $168.6 million | -4.9% | | Retail Net Sales | $138.5 million | $145.1 million | -4.6% | | Wholesale Net Sales | $87.2 million | $91.2 million | -4.3% | | Consolidated Gross Margin | 59.9% | 60.8% | -0.9 pp | | Operating Margin | 9.5% | 13.4% | -3.9 pp | | Adjusted Operating Margin | 9.7% | 13.1% | -3.4 pp | | Diluted EPS | $0.48 | $0.72 | -33.3% | | Adjusted Diluted EPS | $0.49 | $0.70 | -30.0% | | Operating Cash Flow | $24.8 million | $26.2 million | -5.3% | Operational Highlights (Q4) In Q4 FY2025, retail segment written orders increased 1.6%, while wholesale orders decreased 6.8%, with advertising expenses rising to 3.4% of sales - Retail segment written orders increased 1.6% YoY4 - Wholesale segment written orders decreased 6.8% YoY4 - Advertising expenses increased to 3.4% of sales, up from 2.8% a year ago4 - Paid cash dividends totaling $10.0 million ($0.39 per share) during the quarter4 Fiscal 2025 Full Year Highlights Summary of Ethan Allen's full fiscal year 2025 financial results, operational achievements, and strategic investments Key Financial Metrics (FY2025) For the full fiscal year 2025, consolidated net sales were $614.6 million, a 4.9% decrease, with gross margin at 60.5% and operating cash flow at $61.7 million FY2025 Full Year Financial Performance | Metric | FY2025 | FY2024 | Change | | :----------------------- | :---------- | :---------- | :----- | | Consolidated Net Sales | $614.6 million | $646.2 million | -4.9% | | Retail Net Sales | $523.1 million | $540.6 million | -3.2% | | Wholesale Net Sales | $359.1 million | $371.1 million | -3.2% | | Consolidated Gross Margin | 60.5% | 60.8% | -0.3 pp | | Adjusted Operating Margin | 10.2% | 12.1% | -1.9 pp | | Diluted EPS | $2.01 | $2.49 | -19.3% | | Operating Cash Flow | $61.7 million | $80.2 million | -23.1% | | Total Cash and Investments | $196.2 million | $195.8 million | +0.2% | | Inventory Levels | $140.9 million | $142.0 million | -0.8% | Operational and Strategic Achievements (FY2025) In fiscal 2025, Ethan Allen opened four new design centers, reduced headcount by 5.7%, and received recognition for sustainability efforts - Retail segment written orders were lower by 1.5%, and wholesale segment written orders were lower by 3.2%6 - Headcount reduced by 5.7% from a year ago and 32.2% less than June 2019, indicating operational efficiency26 - Opened four new Company-operated design centers and plans for additional openings in fiscal 20266 - Awarded 'Most Improved' by The Sustainable Furnishings Council for wood-sourcing policies and commitment to sustainable wood6 - Invested $11.3 million in capital expenditures, an increase from $9.6 million a year ago6 Detailed Financial Performance In-depth analysis of Ethan Allen's GAAP and adjusted financial measures, balance sheet, cash flow, and dividend declarations Key Financial Measures (GAAP & Adjusted) Ethan Allen's detailed financial measures show a decline in net sales and profitability for both Q4 and full fiscal year 2025, while gross margin remained robust above 59% Key Financial Measures (Q4 and FY2025) (in thousands $) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :----------------------- | :---------- | :---------- | :---------- | :---------- | | Net sales | $160,357 | $168,632 | $614,649 | $646,221 | | Gross profit | $96,059 | $102,461 | $372,121 | $393,062 | | Gross margin | 59.9% | 60.8% | 60.5% | 60.8% | | GAAP operating income | $15,269 | $22,627 | $61,988 | $77,991 | | Adjusted operating income | $15,588 | $22,047 | $62,895 | $77,914 | | GAAP operating margin | 9.5% | 13.4% | 10.1% | 12.1% | | Adjusted operating margin | 9.7% | 13.1% | 10.2% | 12.1% | | GAAP net income | $12,268 | $18,513 | $51,596 | $63,816 | | Adjusted net income | $12,505 | $18,080 | $52,271 | $63,758 | | GAAP diluted EPS | $0.48 | $0.72 | $2.01 | $2.49 | | Adjusted diluted EPS | $0.49 | $0.70 | $2.04 | $2.49 | | Cash flows from operating activities | $24,817 | $26,241 | $61,696 | $80,195 | Balance Sheet and Cash Flow Analysis Ethan Allen concluded fiscal 2025 with a robust balance sheet, maintaining $196.2 million in cash and investments and no outstanding debt Key Balance Sheet and Cash Flow Data (FY2025) | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------- | :-------------- | :-------------- | :----- | | Cash and investments | $196.2 million | $195.8 million | +0.2% | | Cash from operating activities | $61.7 million | $80.2 million | -23.1% | | Cash dividends paid | $50.1 million | $50.3 million | -0.4% | | Capital expenditures | $11.3 million | $9.6 million | +17.7% | | Inventories, net | $140.9 million | $142.0 million | -0.8% | | Customer deposits | $75.1 million | $73.5 million | +2.2% | | Wholesale backlog | $48.9 million | $53.5 million | -8.5% | - No outstanding debt at June 30, 202512 Dividends Declared Ethan Allen declared a special cash dividend of $0.25 per share and a regular quarterly cash dividend of $0.39 per share, marking the fifth consecutive year of special dividends - Special cash dividend of $0.25 per share declared on July 29, 202513 - Regular quarterly cash dividend of $0.39 per share declared on July 29, 202513 - Both dividends payable on August 28, 202513 - This marks the fifth consecutive year of declaring and paying a special cash dividend13 Corporate Information Essential corporate details including conference call information, company profile, non-GAAP measures, and forward-looking statements Conference Call Details Ethan Allen will host a conference call on July 30, 2025, at 5:00 p.m. Eastern Time to discuss its fiscal results, with a live webcast and archived recording available - Conference call scheduled for July 30, 2025, at 5:00 p.m. Eastern Time14 - Live webcast available on the Company's Investor Relations website (https://ir.ethanallen.com), with an archived recording for up to six months1415 About Ethan Allen (Company Profile) Ethan Allen is a leading interior design destination, recognized as America's 1 Premium Furniture Retailer, manufacturing approximately 75% of its custom furniture in North America - Ethan Allen is a leading interior design destination, combining state-of-the-art technology with personal service16 - Manufactures about 75% of its custom-crafted furniture in its own North American manufacturing facilities16 - Operates 172 retail design centers in North America, including 142 Company-operated and 30 independently owned and operated locations6 About Non-GAAP Financial Measures Ethan Allen utilizes non-GAAP financial measures, such as adjusted operating income and diluted EPS, to complement GAAP statements and provide enhanced transparency into operating results - Non-GAAP financial measures include adjusted operating income and margin, adjusted net income, and adjusted diluted EPS17 - These measures are used for financial and operational decision-making and to evaluate period-to-period comparisons, providing useful information about operating results17 - Investors should consider non-GAAP measures in addition to, and not as a substitute for, GAAP financial performance measures17 Forward-Looking Statements This section contains forward-looking statements reflecting management's beliefs, subject to risks and uncertainties that could cause actual results to differ materially - Forward-looking statements represent management's beliefs and assumptions concerning current expectations, projections, or trends relating to results of operations, financial results, and strategic initiatives18 - These statements are subject to risks and uncertainties that may cause actual results to differ materially from expectations20 - Readers should not place undue reliance on these statements, as many factors are beyond the Company's ability to control or predict21 Condensed Consolidated Financial Statements Presentation of Ethan Allen's unaudited condensed consolidated statements of comprehensive income, balance sheets, and non-GAAP reconciliations Condensed Consolidated Statements of Comprehensive Income The unaudited condensed consolidated statements of comprehensive income show a year-over-year decrease in net sales, gross profit, operating income, and net income for both the three and twelve months ended June 30, 2025 Condensed Consolidated Statements of Comprehensive Income (Selected Data) (in thousands $) | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :----------------------------------- | :---------- | :---------- | :---------- | :---------- | | Net sales | $160,357 | $168,632 | $614,649 | $646,221 | | Cost of sales | $64,298 | $66,171 | $242,528 | $253,159 | | Gross profit | $96,059 | $102,461 | $372,121 | $393,062 | | Selling, general and administrative expenses | $80,791 | $80,414 | $309,790 | $315,148 | | Operating income | $15,269 | $22,627 | $61,988 | $77,991 | | Net income | $12,268 | $18,513 | $51,596 | $63,816 | | Net income per diluted share | $0.48 | $0.72 | $2.01 | $2.49 | Condensed Consolidated Balance Sheets As of June 30, 2025, the condensed consolidated balance sheet indicates a slight decrease in total assets and liabilities, with increased cash and long-term investments, and no outstanding debt Condensed Consolidated Balance Sheets (Selected Data) (in thousands $) | Asset/Liability | June 30, 2025 | June 30, 2024 | Change | | :-------------------------------- | :-------------- | :-------------- | :----- | | Total ASSETS | $737,099 | $744,917 | -1.1% | | Cash and cash equivalents | $76,178 | $69,710 | +9.3% | | Investments, short-term | $59,955 | $91,319 | -34.4% | | Investments, long-term | $60,030 | $34,772 | +72.6% | | Inventories, net | $140,893 | $142,040 | -0.8% | | Total LIABILITIES | $254,830 | $262,001 | -2.8% | | Customer deposits | $75,068 | $73,471 | +2.2% | | Total SHAREHOLDERS' EQUITY | $482,269 | $482,916 | -0.1% | - No outstanding debt at June 30, 202512 Reconciliation of Non-GAAP Financial Measures This section provides a detailed reconciliation of GAAP to adjusted non-GAAP financial measures, including operating income, net income, and diluted EPS, with key adjustments for fiscal 2025 Reconciliation of GAAP to Adjusted Financial Measures (Q4 and FY2025) (in thousands $) | Metric | Q4 FY2025 GAAP | Q4 FY2025 Adj. | FY2025 GAAP | FY2025 Adj. | | :-------------------------- | :------------- | :------------- | :---------- | :---------- | | Operating income | $15,269 | $15,588 | $61,988 | $62,895 | | Operating margin | 9.5% | 9.7% | 10.1% | 10.2% | | Net income | $12,268 | $12,505 | $51,596 | $52,271 | | Diluted EPS | $0.48 | $0.49 | $2.01 | $2.04 | Adjustments to GAAP Financial Measures (Pre-tax) (in thousands $) | Adjustment Type | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :-------------------------- | :--------- | :--------- | :------- | :------- | | Orleans, Vermont flood | $19 | $- | $92 | $2,243 | | Gain on sale-leaseback | $- | $(654) | $(218) | $(2,620) | | Severance and other charges | $300 | $74 | $1,033 | $300 | | Total Adjustments | $319 | $(580) | $907 | $(77) |