Mon, May 5, 8:39 PM (7 days ago)
**Ethan Allen Interiors Inc. (ETD) Q3 Fiscal 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** $142.7 million, a 2.5% decrease YoY due to lower unit volume and fewer orders, partially offset by higher ticket prices and contract sales. - **Gross Profit:** $87.4 million, a 2.7% decrease YoY, with a gross margin of 61.2%. - **Operating Income:** $11.0 million, a 28.2% decrease YoY, with an operating margin of 7.7%. - **Net Income:** $9.6 million, a 25.8% decrease YoY, with diluted EPS of $0.37. - **Cash Flow:** $10.2 million from operating activities, a 57% decrease YoY. **Profit Margins and Cash Flow:** - **Gross Margin:** 61.2%, down 10 basis points YoY. - **Operating Margin:** 7.7%, down 2.8 percentage points YoY. - **Net Margin:** 6.7%, down 2.1 percentage points YoY. - **Cash Flow from Operations:** $10.2 million, down 57% YoY. **Earnings Changes:** - **Net Income:** Decreased by 25.8% YoY to $9.6 million. - **EPS:** Decreased by 26% YoY to $0.37. **Quarterly Performance Discussion:** - **Revenue Trends:** Decline in delivered unit volume and orders, offset by higher ticket prices. - **Operating Expenses:** SG&A expenses increased by 1.3% YoY, driven by fixed cost deleveraging. - **Cash Flow:** Decrease due to lower net income and changes in working capital. **Trends and Uncertainties:** - **Economic Uncertainty:** Tariffs, elevated interest rates, and a stagnant housing market impact consumer confidence. - **Operational Efficiencies:** Reduced headcount by 4.5% in the last 12 months. - **Future Operations Impact:** Focus on cost savings, expense control, and maintaining gross margin preservation. **Segment Performance:** - **Wholesale:** Net sales increased by 10.2% QoQ, driven by intercompany sales and contract sales. - **Retail:** Net sales decreased by 4.1% QoQ, impacted by lower unit volumes and fewer orders. **Liquidity and Capital Resources:** - **Cash and Investments:** $183.0 million in cash, cash equivalents, and investments. - **Credit Facility:** $121.0 million available under the revolving credit facility. - **Dividends:** Paid a regular quarterly cash dividend of $10.0 million or $0.39 per share. **Market Risks:** - **Interest Rate Risk:** Minimal impact from changes in interest rates. - **Foreign Currency Risk:** Immaterial impact from foreign exchange rate changes. - **Tariffs and Duties:** Potential adverse impact on margins and sales volume. **Outlook:** - **Growth Initiatives:** Focus on product offerings, service, vertical integration, technology, logistics, and marketing. - **Challenges:** Economic uncertainty, tariffs, and competitive pressures. **Ticker:** ETD