What happened

Shares of Ethan Allen Interiors (ETD 1.40%) were moving higher Thursday after the high-end home furnishings company posted strong results for its fiscal 2023 first quarter.

As of 1:14 p.m. ET, the stock was up 10%.

So what

Bucking the broader trend in retail, especially home goods, Ethan Allen posted 17.7% revenue growth to $214.5 million, which topped estimates of $206.5 million.

For the period, which ended Sept. 30, its adjusted operating margin jumped from 15.2% to 17.6% as the company gained leverage thanks to slower growth in its overhead expenses. And on the bottom line, adjusted earnings per share increased 39% to $1.11, which easily beat the consensus estimate of $0.80.

"Moving forward we are well-positioned to manage the challenging trends within the global economy," CEO Farooq Kathwari said. "As we celebrate 90 years of innovation, our focus is on the continued strengthening of our vertically integrated structure."

Kathwari also noted that 75% of the company's products were made in North American workshops, which could give it an advantage at a time when much of the retail sector has been beset with supply chain issues and delays in overseas shipments. 

Ethan Allen's inventory was down slightly from three months prior, showing that, unlike many of its peers, it isn't saddled with excess inventory. It attributed that decline in inventory to a lower backlog in orders as inventory levels revert to historical norms.

Now what

Management did not offer revenue or earnings guidance, but it did say that written orders -- one indicator of future sales -- were down 8.6% in its retail segment and 7.2% in its smaller wholesale segment. That could indicate that the headwinds affecting the rest of the home goods sector are having some impact on the company.

However, even if Ethan Allen is facing cyclical headwinds, the stock looks cheap for a company with a well-known brand name and gross margins that, at 60%, are about as strong as those of any brick-and-mortar retailer.

The retail stock trades at a price-to-earnings ratio of 8 based on estimates for the current fiscal year, and at the current share price, its dividend yields 5.7%.