Ethan Allen Reports 2.5% Decline in Q3 Net Sales, Opens New Design Centers

Ethan Allen Interiors Inc. reported its financial results for the third quarter of fiscal 2025, revealing a consolidated net sales figure of $142.7 million, a decrease of 2.5% compared to $146.4 million in the same quarter of the previous year. For the nine months ending March 31, 2025, net sales totaled $454.3 million, down 4.9% from $477.6 million in the prior year. The decline in sales was attributed to reduced delivered unit volumes, fewer incoming written orders, and lower designer floor sample sales, although this was partially offset by an increase in average retail ticket prices and improved contract sales.

The company's gross profit for the third quarter was $87.4 million, representing a gross margin of 61.2%, slightly down from 61.3% in the prior year. For the nine-month period, gross profit was $276.1 million, maintaining a gross margin of 60.8%. Operating income for the third quarter fell to $11.0 million, down 28.2% from $15.3 million a year earlier, while the nine-month operating income was $46.7 million, down 15.6% from $55.4 million. The decrease in operating income was primarily due to lower consolidated net sales, although the company managed to control SG&A expenses effectively.

Ethan Allen's strategic developments included the opening of new state-of-the-art design centers in Middleton, Wisconsin, and Toronto, Canada, which aim to enhance customer experience by integrating technology with interior design services. The company operated 143 retail design centers as of March 31, 2025, with a total of 189 locations when including independently owned centers. The workforce was reported at 3,294 employees, reflecting a 4.5% reduction over the past year as the company continues to streamline operations and leverage technology.

The company’s cash and cash equivalents stood at $65.7 million, with total available liquidity of $303.9 million, including short-term and long-term investments. Ethan Allen maintained a strong balance sheet with no outstanding debt, and it continued to return capital to shareholders through regular cash dividends, totaling $40.1 million for the first nine months of fiscal 2025. The company’s outlook remains cautious, as it navigates challenges such as economic uncertainty, elevated interest rates, and a stagnant housing market, which have impacted consumer confidence and spending.

Looking ahead, Ethan Allen anticipates that the introduction of new products and strategic marketing initiatives will help drive sales, although it acknowledges the potential for continued volatility in consumer demand. The company remains focused on maintaining operational efficiencies and managing costs to mitigate the impact of external economic pressures.