Ethan Allen Interiors Reports Results for Fourth Quarter and Fiscal Year

July 30, 2026  by Karen Parrish in Business Strategy, Industry   

Farooq Kathwari, Ethan Allen’s chairman, president and CEO commented, “We are pleased to report our fiscal 2026 financial and operating results, which include strong margins and a robust balance sheet despite a challenging operating environment. Fiscal 2026 marked a year where we further strengthened many areas of our vertically integrated enterprise, including our talent, product offerings, marketing, technology, retail network, manufacturing, logistics and social responsibility. Recent product introductions, which portray classics with a modern perspective, resonate with our clients. We remain confident in our long-term strategy as the interior design destination, operating a vertically integrated enterprise with 171 Ethan Allen Retail Design Centers in North America and more internationally, and supported by strong North American manufacturing and logistics.”

“We remain focused on implementing meaningful strategies to further strengthen our business. We have been able to improve operating efficiency and run a leaner enterprise despite a reduction in business with the U.S. State Department and sluggish demand. For the quarter ended June 30, 2026, we reported consolidated net sales of $146.8 million, adjusted gross margin of 59.7%, adjusted operating income of $10.8 million, adjusted operating margin of 7.4% and adjusted diluted EPS of $0.36. Wholesale segment written orders declined 11.9% compared to last year while our Retail segment written orders declined 10.8% as a difficult prior year comparison combined with lower design center traffic and broader macroeconomic uncertainty, including global unrest, created near-term pressure on our written sales. Our adjusted operating margin of 7.4% reflects the impact of tariffs partially offset by our focus on cost control and operational efficiencies.”

“We remain debt-free with substantial liquidity and a robust balance sheet to support long-term growth. During the just completed fourth quarter we generated $22.4 million in operating cash flow, including $5.0 million from tariff refunds. Our strong operating cash flow combined with disciplined capital management helped drive our ending total cash and investments to $187.5 million, which reflects our commitment to maintaining the financial strength needed in today’s challenging environment. We continued our history of returning capital to shareholders by paying a regular quarterly cash dividend of $10.0 million and are pleased to announce that yesterday our Board approved a special cash dividend of $0.25 per share and a regular quarterly cash dividend of $0.39 per share, both payable on August 26, 2026.”

“Our vertical integration and focus on one brand are our strengths. Throughout our 94-year history, we’ve navigated many economic and housing cycles through constant reinvention. We are committed to offering relevant quality products, providing complimentary interior design service and manufacturing approximately 75% of the custom furniture in our own North American facilities. We acknowledge the ways technology is changing the furniture shopping experience and through investments in our people, our design centers, our marketing and our technology, we are creating a stronger client engagement experience while expanding into additional retail markets. We want to thank our teams across Ethan Allen for their continued dedication and execution, and our shareholders for their ongoing support as we remain focused on driving long-term shareholder value. We look forward to continuing our progress and remain cautiously optimistic,” concluded Mr. Kathwari.

FISCAL 2026 FOURTH QUARTER HIGHLIGHTS*

- Consolidated net sales of $146.8 million; prior year $160.4 million

- Retail net sales of $132.0 million; prior year $138.5 million

- Wholesale net sales of $79.7 million; prior year $87.2 million

- Written orders

- Retail segment written orders declined 10.8%

- Wholesale segment written orders decreased 11.9%

- Consolidated gross margin of 63.1%; adjusted gross margin of 59.7%; prior year 59.9%; included in the current year consolidated gross margin was the recovery of $5.0 million in previously paid tariffs imposed under the International Emergency Economic Protection Act (“IEEPA”); these refunds reflect claims made through the U.S. Customs and Border Protection refund system and increased both consolidated gross and operating margin by 340 basis points in the just completed fourth quarter

- Selling, general and administrative (“SG&A”) expenses decreased 4.4% from last year from reduced variable expenses, strong cost control, reduced headcount and lower marketing costs

- Marketing spend totaled $4.7 million or 3.2% of consolidated net sales; prior year 3.4%

- Consolidated operating margin of 9.8%; adjusted consolidated operating margin of 7.4%; adjusted prior year 9.7%; current year operating margin impacted by higher tariffs and fixed cost deleveraging from lower consolidated net sales

- Diluted EPS of $0.46; adjusted diluted EPS of $0.36; adjusted prior year $0.49

- Generated $22.4 million in operating cash flow; prior year $24.8 million

- Paid cash dividends of $10.0 million or $0.39 per share, the same as a year ago

- Repurchased 250,000 shares of Company stock for $4.8 million under the existing share repurchase program; remaining authorization to repurchase 1,757,364 shares of stock pursuant to the program

FISCAL 2026 FULL YEAR HIGHLIGHTS*

- Consolidated net sales of $579.5 million; prior year $614.6 million

- Retail net sales of $511.2 million; prior year $523.1 million

- Wholesale net sales of $330.7 million; prior year $359.1 million

- Written orders

- Retail segment written orders declined 6.1%

- Wholesale segment written orders decreased 11.2%

- Consolidated gross margin of 61.2%; prior year 60.5%

- SG&A expenses, representing 53.3% of sales, decreased 0.4%

- Consolidated operating margin of 7.8%; adjusted operating margin of 8.1%; adjusted prior year 10.2%

- Diluted EPS of $1.56; adjusted diluted EPS of $1.61; adjusted prior year $2.04

- Generated $52.5 million of cash from operating activities; $61.7 million a year ago

- Paid cash dividends totaling $46.3 million during fiscal 2026, including a special cash dividend of $0.25 per share in August 2025

- Invested $11.0 million in capital expenditures; comparable to $11.3 million a year ago

- Ended the fiscal year with $187.5 million in total cash and investments; no outstanding debt

- Inventory levels rose to $148.5 million at June 30, 2026, up 5.4%

- Headcount totaled 3,062 associates at fiscal year-end, down 4.6%

- Four new Company-operated design centers located in Colorado Springs (CO), San Diego (CA), Vancouver (Canada) and Thornhill (Canada) were opened during fiscal 2026 that showcase Ethan Allen home furnishings while combining complimentary interior design services with technology

- Ended the fiscal year with 171 Ethan Allen retail design centers in North America, including 141 Company-operated and 30 independently owned and operated

- New Company-operated design centers to be opened during fiscal 2027 include locations in Victoria Gardens (CA), Aventura (FL), Burlington (VT), Brooklyn (NY) and Naples (FL)

- New tariffs under Section 301 of the Trade Act of 1974 became effective on July 24, 2026, and range between 10% and 12.5%; these tariffs replace the previously issued 10% global tariffs imposed under Section 122, which recently expired

- For the third year in a row Ethan Allen was named America’s #1 Premium Furniture Retailer

- The Sustainable Furnishings Council and the National Wildlife Federation awarded Ethan Allen a “High Score” on their Wood Furniture Scorecard for its commitment to the use of sustainable wood in furniture manufacturing

- Ethan Allen’s upholstery operation in Silao, Mexico was awarded the Great Place to Work® certification for the eighth consecutive year; in addition to this designation, the Silao operation was recognized as “Empresa Socialmente Responsible” (Environmentally and Socially Responsible) for the seventh consecutive year

- Celebrated Ethan Allen Day in June to honor the pioneering spirit of its namesake and celebrate the 94-year history of Ethan Allen as an iconic American brand

- Held the Company’s annual convention at its headquarters and livestreamed across the world; under the theme of Always Moving Forward, the program reviewed initiatives in manufacturing, logistics, technology, marketing and retail, and celebrated interior designers both for achievement in written sales and design excellence

DIVIDENDS

On April 28, 2026, the Company’s Board of Directors declared a $0.39 per share regular quarterly cash dividend, which was paid on May 27, 2026. More recently, on July 28, 2026, the Board of Directors declared a $0.25 per share special cash dividend in addition to a $0.39 per share regular quarterly cash dividend, both payable on August 26, 2026 to shareholders of record as of August 12, 2026. Ethan Allen has a strong history of returning capital to shareholders and this year marks the sixth consecutive year in which the Company has declared and paid a special cash dividend. 

CONFERENCE CALL

An archived recording of the conference call will remain available on the Company’s Investor Relations website referenced above for six months. A telephone replay will also be available for one month following the call.