Ethan Allen Interiors
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Ethan Allen Interiors (ETD) investor relations material

Ethan Allen Interiors Q2 2026 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q2 2026 earnings summary28 Jan, 2026

Executive summary

  • Second quarter results were negatively impacted by the government shutdown, leading to lower consumer confidence, reduced design center traffic, and decreased retail and contract orders, especially from U.S. government contracts.

  • Achieved strong gross margin of 60.9% and maintained a robust balance sheet despite economic headwinds, including a U.S. government shutdown.

  • Consolidated net sales were $149.9 million, down 4.7% year-over-year, with retail net sales flat and wholesale net sales declining.

  • Adjusted operating income was $13.5 million, with an operating margin of 9%, up from 5.4% in the pre-pandemic 2019 second quarter.

  • Ended the quarter with $179.3 million in cash and investments and no outstanding debt.

Financial highlights

  • Consolidated net sales were $149.9 million, supported by a higher retail backlog, higher average ticket price, incremental clearance sales, and fewer returns, but offset by lower contract sales and demand.

  • Gross margin improved to 60.9% from 60.3% in the prior year.

  • Adjusted diluted EPS was $0.44, down from $0.59 year-over-year; effective tax rate was 25.3%.

  • Operating margin was 9.5%; adjusted operating margin was 9.0% versus 11.5% last year.

  • Paid $10.0 million in cash dividends and made $2.9 million in capital expenditures.

Outlook and guidance

  • Positive written order growth in January suggests improving demand trends.

  • Management remains cautiously optimistic, citing strong brand positioning and operational improvements.

  • Management expects to maintain strong gross margins due to ongoing investments in talent and technology, though volume remains a key factor.

  • Price increases and cost mitigation strategies are expected to help offset tariff headwinds, with further benefits anticipated in future quarters.

  • Recent product introductions are resonating with clients, supporting future growth.

Assess future revenue impact from written orders
Detail working capital's role in cash flow drop
Explain wholesale orders vs. backlog divergence
Tariff impact after mitigation efforts
Drivers of January's positive sales trend
Digital marketing spend impact and future plans
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Frequently asked questions

Ethan Allen Interiors Inc. is engaged in the design, marketing and sale of home furnishings through its Retail stores, and Ethan Allen Home stores, which offer a broad selection of furniture for every room in the home, coordinated accessories and accent pieces, wallcoverings and custom draperies. It also provides services for interior design professionals. The company's goal is to provide its customers with innovative designs and quality furnishings that meet the demanding tastes of trend-conscious consumers.

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