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1. Company Snapshot

1.a. Company Description

Ethan Allen Interiors Inc.operates as an interior design company, and manufacturer and retailer of home furnishings in the United States, Mexico, Honduras, and Canada.The company operates in two segments, Wholesale and Retail.


Its products include case goods items, such as beds, dressers, armoires, tables, chairs, buffets, entertainment units, home office furniture, and wooden accents; upholstery items comprising sleepers, recliners and other motion furniture, chairs, ottomans, custom pillows, sofas, loveseats, cut fabrics, and leather; and home accent items consisting of window treatments and drapery hardware, wall decors, florals, lighting, clocks, mattresses, bedspreads, throws, pillows, decorative accents, area rugs, wall coverings, and home and garden furnishings.The company markets and sells its products under the Ethan Allen brand through home furnishing retail networks and independent retailers, as well as through ethanallen.com website.As of June 30, 2021, it operated a network of approximately 302 design centers.


Ethan Allen Interiors Inc.was founded in 1932 and is headquartered in Danbury, Connecticut.

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1.b. Last Insights on ETD

Ethan Allen Interiors' recent performance was negatively impacted by weak Q1 earnings and revenue, which missed estimates. The company's operating margin was affected by lower delivered sales and increased marketing expenses. Inflation and housing market headwinds also posed challenges, although cost controls and a strategic domestic footprint helped maintain profitability. Furthermore, the CEO noted that government shutdowns affected consumer confidence, contributing to the weak earnings. Additionally, despite a strong gross margin reflecting its commitment to North American manufacturing, the company faced challenges.

1.c. Company Highlights

2. Ethan Allen's Q1 FY2026 Earnings: A Strong Start to the Year

Ethan Allen's fiscal 2026 first quarter results showed consolidated net sales of $147 million, with retail written orders growing 5.2% year-over-year. The company's gross margin was 61.4%, driven by sales mix changes, lower raw material costs, and selective price increases. Adjusted operating margin was 7.2%, and adjusted diluted EPS was $0.43, slightly below estimates of $0.44. The company generated $16.8 million in operating cash flow and ended the quarter with $193.7 million in cash and no debt.

Publication Date: Nov -19

📋 Highlights
  • Strong Retail Growth:: Retail written orders rose 5.2% YoY to $147M, driven by improved conversion, promotions, brand strength, and new products.
  • Wholesale Backlog Buffer:: Despite 7.1% wholesale order decline, $53.5M backlog offsets near-term contract business challenges, including reduced government spending.
  • Healthy Margins:: Gross margin held at 61.4% via sales mix shifts, lower material costs, and selective price hikes (5-10% to offset tariffs).
  • Robust Liquidity:: Generated $16.8M operating cash flow, ending with $193.7M cash and no debt, while maintaining $0.39/share dividend (payable in November).
  • Marketing Expansion:: National ad spend surged ~50%, prioritizing paid search/social campaigns, plus an additional direct mail push, signaling long-term brand investment.

Operational Highlights

The growth in retail written orders was driven by improved order conversion, promotional activities, brand strength, and new product introductions. Wholesale orders, however, decreased 7.1% due to lower contract business, including government spending reductions. The company ended the quarter with a wholesale backlog of $53.5 million. As CEO M. Kathwari highlights, the company's vertically integrated structure and investments are providing strong results despite challenges.

Marketing and Technology Investments

Ethan Allen saw a close to 50% increase in advertising at the national level, with most of the new investment going into paid search and paid social campaigns. The benefit of this increased spending won't be immediately apparent but will be seen in the current quarter and going forward. The company also had an extra direct mail campaign this past quarter, which it didn't have in the previous year.

Valuation and Outlook

With a P/E Ratio of 11.87 and a Dividend Yield of 8.24%, the company's valuation appears reasonable. Analysts estimate next year's revenue growth at 0.2%. The company's strong team, significant investments in technology, and focus on social responsibility position it well for future success despite challenging conditions. The regular quarterly cash dividend of $0.39 per share will be paid in November, reflecting the company's commitment to returning value to shareholders.

Financial Position

Ethan Allen ended the quarter with $193.7 million in cash and no debt, providing a solid foundation for future growth. The company's return on equity (ROE) stands at 9.88%, indicating a decent return on shareholders' equity. With a Net Debt / EBITDA ratio of 0.65, the company's debt position is manageable.

3. NewsRoom

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Ethan Allen CEO Farooq Kathwari: Consumers are looking for good value

Nov -28

Source: youtube.com

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Connor Clark & Lunn Investment Management Ltd. Sells 2,610 Shares of Ethan Allen Interiors Inc. $ETD

Nov -17

Source: defenseworld.net

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Ethan Allen Earns High Score for Sustainable Wood Sourcing

Nov -13

Source: globenewswire.com

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Ethan Allen Awarded Great Place to Work® Mexico Certification for 8th Consecutive Year

Nov -12

Source: globenewswire.com

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Y Intercept Hong Kong Ltd Takes $1.41 Million Position in Ethan Allen Interiors Inc. $ETD

Nov -03

Source: defenseworld.net

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Ethan Allen CEO on weak earnings: Impacted by government shutdown's impact on consumer confidence

Oct -30

Source: youtube.com

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Ethan Allen Interiors Inc. (ETD) Q1 2026 Earnings Call Transcript

Oct -29

Source: seekingalpha.com

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Ethan Allen (ETD) Lags Q1 Earnings and Revenue Estimates

Oct -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.76%)

6. Segments

Retail

Expected Growth: 4.77%

Ethan Allen Interiors Inc.'s 4.77% retail growth is driven by increasing demand for home furnishings, particularly in the mid-to-high-end segment. The company's focus on interior design services, e-commerce platform, and strategic marketing efforts have contributed to this growth. Additionally, the company's efforts to expand its product offerings and improve customer experience have also played a significant role.

Wholesale

Expected Growth: 4.83%

Ethan Allen Interiors Inc.'s wholesale segment growth of 4.83% is driven by increasing demand for home furnishings, strategic pricing, and effective inventory management. Additionally, the company's focus on e-commerce and digital marketing has expanded its customer base, contributing to the growth. Furthermore, the company's efforts to improve operational efficiency and reduce costs have also positively impacted the segment's performance.

Elimination of Inter-company Sales

Expected Growth: 4.65%

Ethan Allen Interiors Inc.'s 4.65% growth is driven by the elimination of inter-company sales, resulting in a more accurate representation of revenue. This growth is also attributed to increased sales in the wholesale segment, improved product offerings, and effective cost management. Additionally, the company's focus on e-commerce and digital marketing initiatives has contributed to the growth.

7. Detailed Products

Furniture

Ethan Allen Interiors Inc. offers a wide range of stylish and comfortable furniture pieces for living rooms, dining rooms, bedrooms, and home offices.

Home Decor

Ethan Allen's home decor collection includes a variety of stylish and functional pieces, such as vases, candles, and wall art, to enhance the beauty of your home.

Lighting

Ethan Allen offers a wide selection of stylish and functional lighting fixtures, including table lamps, floor lamps, and chandeliers.

Rugs

Ethan Allen's rug collection features a wide range of styles, materials, and sizes to complement any room in your home.

Window Treatments

Ethan Allen offers a variety of stylish and functional window treatments, including curtains, blinds, and shades.

Interior Design Services

Ethan Allen's interior design services provide personalized design consultations and space planning to help you create your dream home.

8. Ethan Allen Interiors Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Ethan Allen Interiors Inc. is medium because while there are some substitutes available in the market, they are not very close to the company's products in terms of quality and design.

Bargaining Power Of Customers

The bargaining power of customers for Ethan Allen Interiors Inc. is low because the company's products are highly customized and customers have limited bargaining power.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Ethan Allen Interiors Inc. is medium because while the company has some bargaining power due to its size, suppliers also have some bargaining power due to the specialized nature of the products.

Threat Of New Entrants

The threat of new entrants for Ethan Allen Interiors Inc. is low because the company has a strong brand reputation and it would be difficult for new entrants to replicate its products and services.

Intensity Of Rivalry

The intensity of rivalry for Ethan Allen Interiors Inc. is high because the company operates in a highly competitive industry with many established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 21.67%
Debt Cost 4.13%
Equity Weight 78.33%
Equity Cost 10.20%
WACC 8.88%
Leverage 27.67%

11. Quality Control: Ethan Allen Interiors Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Ethan Allen

A-Score: 6.2/10

Value: 6.1

Growth: 3.8

Quality: 6.4

Yield: 10.0

Momentum: 4.0

Volatility: 6.7

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La-Z-Boy

A-Score: 5.3/10

Value: 6.8

Growth: 5.2

Quality: 5.4

Yield: 5.0

Momentum: 3.0

Volatility: 6.3

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A-Score: 4.2/10

Value: 6.2

Growth: 5.6

Quality: 5.0

Yield: 6.0

Momentum: 0.0

Volatility: 2.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

24.11$

Current Price

24.11$

Potential

-0.00%

Expected Cash-Flows