US' Ethan Allen closes FY25 with $614.6 mn sales, eyes FY26 growth
Despite the dip in revenue, the company maintained a strong gross margin of 60.5 per cent and an adjusted operating margin of 10.2 per cent. Selling, general and administrative (SG&A) expenses declined by 1.7 per cent and represented 50.4 per cent of sales. The diluted earnings per share (EPS) came in at $2.01, compared to $2.49 last year.
Ethan Allen has reported consolidated net sales of $614.6 million in FY25, down 4.89 per cent YoY, with strong gross margin of 60.5 per cent and adjusted EPS of $2.01. Q4 sales fell 4.9 per cent. Despite lower written orders and reduced headcount, the company opened new design centres and strengthened its digital-retail integration. It remains confident in its business model and FY26 growth outlook.
The capital expenditures (capex) rose to $11.3 million, and the company ended the fiscal with $196.2 million in cash and investments and zero debt. Inventory levels dropped 6.3 per cent in the last quarter and 0.8 per cent year-over-year to $140.9 million. Ethan Allen also reported a 5.7 per cent reduction in its workforce, now totalling 3,211 associates—down 32.2 per cent from June 2019.
In FY25, the company opened four new design centres in the US and Canada, combining physical retail with digital interior design services. Ethan Allen now operates 172 retail design centres in North America and several international locations. FY26 will see new openings in Albuquerque, Colorado Springs, Concord (Canada), San Diego, and Webster, the company said in a press release.
'Our fiscal 2025 performance reflects the strength of our vertically integrated enterprise, including our interior design retail network, relevant product offerings and ability to manufacture about 75 per cent of our furniture in our own North American facilities. We executed well throughout the fiscal year as we remained focused on five key areas: talent, service, marketing, technology and social responsibility,' said Farooq Kathwari, Ethan Allen's chairman, president and chief executive officer (CEO) at Ethan Allen.
In the fourth quarter (Q4) of FY25, Ethan Allen reported consolidated net sales of $160.4 million, a drop of 4.9 per cent YoY. Retail net sales stood at $138.5 million, while wholesale net sales slipped to $87.2 million.
In terms of order activity, the retail segment saw a 1.6 per cent YoY increase in written orders, while wholesale written orders fell by 6.8 per cent. The company's consolidated gross margin stood at 59.9 per cent, compared to 60.8 per cent a year ago. The operating margin was 9.5 per cent, and the adjusted operating margin fell to 9.7 per cent from 13.1 per cent last year.
In Q4, diluted earnings per share (EPS) came in at $0.48, with adjusted EPS at $0.49, down from $0.7 in the prior year. Ethan Allen generated $24.8 million in operating cash flow during the quarter, slightly lower than the $26.2 million recorded last year.
'The strengthening of our team and investing in technology has been a game changer and helped us operate more efficiently. On June 30, 2025, our headcount was 5.7 per cent lower than a year ago and has been reduced by 32.2 per cent since 2019. We are confident in the investments that we are making for the future but recognize the need to remain cognizant of the uncertain economic environment,' added Kathwari. 'We are confident in the strength of our business model as Ethan Allen has successfully navigated challenging times to serve our clients and deliver value to our shareholders throughout its 93-year history. Our robust balance sheet and financial stability provide a solid foundation and position us well as we head into fiscal 2026. We look forward to continuing our progress and remain cautiously optimistic.'
Fibre2Fashion News Desk (SG)
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