Ethan Allen Interiors (ETD -4.06%), a premium home furnishings retailer and manufacturer, released its fiscal fourth quarter 2025 results on July 30, 2025. The company outperformed analyst expectations, with adjusted earnings per share (EPS) reaching $0.49 (Non-GAAP) versus the $0.45 projected, and revenue at $160.4 million compared to a $152.2 million estimate. However, these results still reflect a year-over-year decline in both sales and profitability. Margins tightened and profitability was under pressure, but management pointed to a stabilizing demand environment and continued focus on efficiency. Overall, the quarter delivered a solid result relative to muted expectations, but industry headwinds remain a challenge.
| Metric | Q4 FY25(Three months ended June 30, 2025) | Q4 FY25 Estimate1 | Q4 FY24(Three months ended June 30, 2024) | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.49 | $0.45 | $0.70 | (30.0%) |
| Revenue | $160.4 million | $152.2 million | $168.6 million | -4.9% |
| Gross Margin | 59.9% | 60.8% | (0.9) pp | |
| Adjusted Operating Margin | 9.7% | 13.1% | (3.4) pp | |
| Cash Flow from Operating Activities | $24.8 million | $26.2 million | (5.3%) |
Source: Analyst estimates for the quarter provided by FactSet.
About Ethan Allen Interiors and Its Business Focus
Ethan Allen Interiors operates as a vertically integrated retailer and manufacturer of premium home furnishings, offering products such as sofas, custom upholstery, casegoods (dressers, cabinets), and home accents. It controls most of its furniture design and manufacturing, with roughly three-quarters of production located in North America. This business model helps it maintain quality standards, manage supply chains more effectively, and limit exposure to international tariffs.
The company emphasizes four strategic priorities: quality craftsmanship, technology integration into the retail experience, vertical integration of manufacturing, and a strong commitment to sustainability. These areas enable it to attract a customer base that values customization and design expertise, while also responding quickly to market trends. Its investment in responsible sourcing and digital retail tools continues to differentiate its offerings in a competitive marketplace.
Fourth Quarter Performance Review
Ethan Allen Interiors posted GAAP revenue above analyst expectations, but below the prior year due to continued softness across both retail and wholesale segments. Total sales (GAAP) declined 4.9% year-over-year, with retail net sales (GAAP) falling 4.5% and wholesale net sales down 4.4% for the year, and ongoing broader uncertainty in the housing market and consumer confidence.
Nonetheless, the retail segment posted a 1.6% increase in written orders.
Margins faced pressure despite outperformance relative to consensus. The gross margin (GAAP) narrowed from the prior-year period, dropping to 59.9%. Adjusted operating margin decreased by 3.4 percentage points to 9.7%. Advertising expenses rose to 3.4% of sales. Profitability softened, with adjusted EPS declining 30.0% from a year ago. Wholesale written orders fell 6.8%, with backlog shrinking by $4.6 million, mostly tied to reduced contract business. Management pointed out that while retail written orders ticked up, the wholesale channel remains challenged.
The company highlighted ongoing investments in technology, opening four new design centers during the fiscal year. These locations blend interior design services with digital tools like the inHome augmented reality app and the 3D Room Planner, helping customers visualize furniture at home. Technology use extends to operations, with digital magazines and marketing tools reaching a broad clientele efficiently and at lower marketing cost per customer.
Sustainability remains a key area, with its upholstery operation in Silao, Mexico, recognized for environmental and social responsibility. Additional achievements include being named America’s top premium furniture retailer by Newsweek for a third consecutive year. For the year, Ethan Allen paid $50.1 million in dividends (including a $10.2 million special dividend).
Looking Ahead
Management did not provide specific forward financial guidance for fiscal 2026. However, executives described their outlook as “cautiously optimistic,” noting progress in design center expansion, technology integration, and ongoing capital discipline. Further openings of new centers are planned in regions such as Albuquerque and Colorado Springs. The company's strong balance sheet and operational focus give it flexibility amid uncertainty, but economic factors like housing demand and consumer spending will remain important variables.
The regular quarterly dividend was maintained at $0.39 per share, with a special $0.25 per share dividend also announced for payment on August 28, 2025. Investors should continue to watch trends in retail and wholesale order volumes, as well as any impact from evolving macroeconomic conditions that bear on discretionary spending in the home furnishings sector.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
