by Company remains profitable with adjusted net income of $14.9 million
DANBURY, Conn. — Ethan Allen reported a 5.8% decrease in net sales for its first fiscal quarter 2025 ended Sept. 30.
Sales totaled $154.3 million, down 5.8% from $163.9 million the same period last year.
Retail net sales totaled $132.8 million, down .6% from $133.6 million the same period last year, while wholesale net sales totaled $86.1 million, down 13.4% from $99.4 million. Written orders in the retail segment were down 6.8% during the quarter, and wholesale written sales were down 4.8%.
The company reported adjusted net income of $14.9 million, or 58 cents per share, compared with $16 million, or 63 cents per share, the same period last year.
It had a consolidated gross margin of 60.8% compared with 61.1% last year and an adjusted operating margin of 11.5% compared with 12.1% last year, which the company said was primarily because of fixed costs deleveraging from lower sales.
Other highlights of the report were as follows:
+ The company said advertising expenses were equal to 2.3% of consolidated net sales, up from 2.0% in the prior year.
+ The report said the company generated $15.1 million of cash from operating activities compared with $16.7 million a year ago.
+ It also reported ending the quarter with $186.4 million in total cash and investments and no debt outstanding.
+ It said that inventory levels were reduced to $143.2 million as of Sept. 30, down $6.4 million from the same period last year.
+ The company ended the quarter with 3,347 total employees, down 8.5% from a year ago and 27.9% less than on Sept. 30, 2019.
+ The company operated 173 Ethan Allen retail design centers in North America as of Sept. 30, including 142 company operated and 31 independently owned and operated locations. It also has design centers outside of North America.
Chairman, President and CEO Farooq Kathwari said the company is pleased with its first-quarter results amid a still challenging economic environment.
“We continue to strengthen various areas of our vertically integrated enterprise, including our talent, product offerings, marketing, retail network, manufacturing, logistics, technology and social responsibility,” he said.
“Strengthening our team and investing in technology is a game changer,” he added. “These two important factors have helped us to operate more efficiently. As of Sept. 30, 2024, our headcount was 8.5% lower than a year ago and has been reduced by 27.9% since Sept. 30, 2019.”
The report also noted that Ethan Allen’s Western North Carolina distribution center sustained flooding from Hurricane Helene in September. This resulted in a pre-tax charge of $300,000 and a temporary disruption in shipments.
“Employees have returned to work and normal operating capacity has resumed with an expected recovery from the delayed shipments during the second quarter of fiscal 2025,” the company said.
“As previously disclosed, one of our distribution centers located in Old Fort, North Carolina, was impacted in September by significant flooding from Hurricane Helene,” Kathwari said. “The disruption impacted shipments and we suffered a loss of $0.3 million related to damaged inventory and remediation costs. Restoration efforts have helped our distribution center resume normal shipping and receiving capacity.”
