by Despite small declines in revenue, company remains profitable
DANBURY, Conn. — Ethan Allen remained profitable despite small declines in sales for its second quarter and first half ended Dec. 31.
The company reported net sales of $149.9 million during the second quarter, down 4.7% from $157.3 million the same period a year earlier. Net income totaled $11.7 million, or 46 cents per share, compared with $15 million, or 59 cents per share the same period the year prior.
Gross profit totaled $91.3 million, for a margin of 60.9% compared with $94.8 million, or 60.3% a year earlier. Operating income totaled $14.2 million, representing a 9.5% operating margin compared with $18.2 million, and an operating margin of 11.5% a year earlier.
For the second quarter, retail sales totaled $134.3 million, level with the prior year. Wholesale sales totaled $79.1 million, compared with $86.8 million the prior year.
Written orders in the retail segment were 17.9% lower than the same period a year earlier, while wholesale written orders decreased 19.3% during the same period.
For the full first half, the company reported net sales of $296.9 million, down 4.7% from $311.6 million the same period the year prior. Net income was $22.2 million, or 87 cents per share, compared with $29.7 million, or $1.16 per share a year earlier.
SG&A expenses totaled $77.8 million, or 52% of sales for the second quarter compared with $76.7 million, or 49% of sales a year earlier. For the first half they totaled $157.6 million, or 53% of sales, compared with $152.7 million, or 49% of sales a year earlier.
Farooq Kathwari, chairman, president and chief executive officer, said that the second quarter “include strong margins and a robust balance sheet despite a challenging environment, including the U.S. government shutdown. We continue to strengthen many areas of our vertically integrated enterprise, including our talent, product offerings, marketing, technology, retail network, manufacturing, logistics and social responsibility. As the interior design destination with a strong North American manufacturing presence, we are building on our reputation for handcrafted quality, our unique blend of personal service combined with technology and our vision of classic design from a modern perspective.”
Other highlights of the report were as follows:
+ The company increased its marketing spend by 25.2% to $4.9 million, or 3.2% of consolidated net sales
+ Capital expenditures were $2.9 million compared with $3.8 million a year earlier
+ It ended the quarter with $179.3 million in total cash and investments and no outstanding debt
+ Net inventories totaled $141.9 million as of December 31, 2025, down 0.1% from a year ago
+ It ended the quarter with total headcount of 3,149; 5.1% fewer than a year ago and 30.7% less than December 2019
+ It operated 172 Ethan Allen retail design centers in North America, including 142 company-operated and 30 independently owned and operated. It also said it recently relocated the company’s San Diego, California, design center “to a new, inviting and inspirational space.”
