by While company remains profitable, consolidated sales declined 10% during the quarter and 18.3% for the full year
DANBURY, Conn. — Amid an ongoing slump at retail, Ethan Allen Interiors reported a decrease in net sales for the fourth quarter and full fiscal year 2024 ended June 30.
During the quarter, net sales were down 10% to $168.6 million, from $187.4 million the same period a year earlier. Net income totaled $18.1 million, or 70 cents per share, down 26.5% from the $24.6 million or 96 cents per share, the same period last year.
During the fourth quarter, the company said that its retail sales declined 7.1% to $145.1 million, while wholesale sales fell 20.3% to $91.2 million. Written orders were down 1.3% in the retail segment and rose .4% in the wholesale segment.
During the quarter, it also reported gross profits of $102.5 million, or a 60.8% margin, compared with $115.2 million, or 61.5% last year. It attributed the decline to lower delivered sales, higher inbound freight and a change in product mix, partially offset by lower manufacturing raw material input costs and reduced headcount along with disciplined promotional activity, a change in its sales mix and fewer designer floor sample sales.
Its adjusted operating margin was 13.1% compared with 16.3% last year because of factors that included “fixed cost deleveraging from lower delivered sales, gross margin erosion and incremental advertising partially offset by lower headcount, less variable expenses including lower delivery and commissions, and the ability to maintain a disciplined approach to cost savings and operating expense control.”
The company also noted that its selling, general and administrative expenses were down 4.9%, totaling 47.7% of net sales, up from 45.1% last year because of lower sales volume relative to fixed costs.
“We are pleased to report our strong performance in this post-pandemic period,” said Ethan Allen Chairman, President and CEO Farooq Kathwari. “Despite lower demand and reductions in high backlog, we did well. While sales were lower, our consolidated gross margin remained strong at 60.8% compared with 61.5% a year ago and 54.8% for the fourth quarter ended June 30, 2019.”
For the full year, the company reported sales of $646.2 million, down 18.3% from $791.4 million the previous year. Net income totaled $63.8 million, or $2.49 per share, compared with $103.1 million, or $4.03 per share, a 38.1% decrease.
Net retail sales totaled $540.6 million, down 18.4% from the year prior and net wholesale sales totaled $371.1 million, down 17.5%. Retail written sales were down 8.4% for the year, and wholesale written sales were down 10.9%.
For the full year, the company reported gross profits of $393.1 million, or a 60.8% margin, compared with $480.4 million, or a 60.7% margin the year prior.
Kathwari noted that the company also had a strong cash position compared with the same period last year.
“We continued strong cash generation and ended the quarter with total cash and investments of $195.8 million, up from $172.7 million a year ago and significantly higher than $20.8 million five years back,” Kathwari added. “Our inventories have been reduced by 12.5% since June 30, 2019, and totaled $142.0 million at June 30, 2024. We continue to strengthen our teams while also reducing headcount, which is down 28.1% since June 30, 2019.”
Other highlights of the report were as follows:
+ During the year, the company generated $80.2 million in cash from operating activities, compared with $100.7 million the year prior.
+ Inventory levels totaled $142 million as of June 30, a 4.8% decrease.
+ It ended the year with 3,404 associates, down 9.2% from last year and down 28.1% since June 2019.
+ By year end, it had 172 retail design centers in North America, including 142 company-operated locations and 30 independently owned and operated locations. It also has design centers outside North America.
+ During the year, it opened new design centers in The Villages, Florida; Avon, Ohio; New York City; and Louisville, Kentucky. It plans to open additional design centers in fiscal year 2025, including Albuquerque, New Mexico, and Watchung, New Jersey.
