Ethan Allen Reports 4.7% Decline in Q2 Fiscal 2026 Net Sales

Ethan Allen Interiors Inc. reported its financial results for the second quarter of fiscal 2026, revealing a consolidated net sales figure of $149.9 million, a decrease of 4.7% compared to $157.3 million in the same quarter of the previous year. The decline was attributed to fewer contract sales, despite a higher average ticket price and increased designer floor sample sales. For the first half of the fiscal year, net sales totaled $296.9 million, down from $311.6 million in the prior year. The company's gross profit for the quarter was $91.3 million, resulting in a gross margin of 60.9%, an increase from 60.3% in the prior year, primarily due to a favorable sales mix and selective price increases.

Operating income for the second quarter was reported at $14.2 million, down 21.6% from $18.2 million a year earlier, with an operating margin of 9.5%. The decline in operating income was driven by lower contract sales, increased promotional activity, and higher employee benefit costs. The company’s net income for the quarter was $11.7 million, a decrease of 21.7% from $15.0 million in the prior year, resulting in diluted earnings per share of $0.46, down from $0.59.

Ethan Allen's operational metrics showed a significant decline in wholesale written orders, which fell by 19.3% in the second quarter, reflecting challenges such as reduced government spending and macroeconomic pressures. Retail written orders also decreased by 17.9%. The company operated 142 design centers as of December 31, 2025, with plans to open new locations in California and Canada in the upcoming fiscal year. The total employee count stood at 3,149, reflecting a 5.1% reduction from the previous year as part of ongoing efficiency measures.

In terms of liquidity, Ethan Allen reported cash and cash equivalents of $64.3 million, alongside short-term investments of $75.1 million and long-term investments of $40.0 million. The company maintained a strong balance sheet with no outstanding debt and a current ratio of 2.3. Looking ahead, Ethan Allen anticipates continued challenges in the market but remains committed to its strategic initiatives, including enhancing product offerings and leveraging its vertical integration to maintain competitive advantages. The company also plans to continue its history of paying dividends, having distributed $26.3 million in cash dividends during the first half of fiscal 2026.