Ethan Allen sales fell 6.1% in Q1

Revenues at furniture manufacturer and Top 100 retailer Ethan Allen were mostly weighed down by slack wholesale business.

DANBURY, Conn. — Revenues at furniture manufacturer and Top 100 retailer Ethan Allen were mostly weighed down by slack wholesale business during the first quarter of the company’s fiscal year.

Consolidated net sales for the quarter ended Sept. 30 fell 6.1% to $154.3 million. Retail net sales were essentially flat: down just 0.6% to $132.8 million. In the wholesale segment, net sales dropped 13.4% to $86.1 million.

Written orders were down at both retail and wholesale, declining 6.8% and 4.8% respectively.

Net income contracted 1.5% to $14.7 million, or 57 cents per diluted share. Cash from operating activities came in at $15.1, a decrease from $16.7 million in the prior year due to lower net income and changes in working capital.

Cash and investments totaled $186.4 million at the end of the quarter, compared with $195.8 million at the of the previous period. The decrease was due to $20.2 million in cash dividends paid and capital expenditures of $3.6 million partially offset by $15.1 million in cash generated from operating activities.

“We are pleased with our first quarter financial and operating results amid the challenging economic environment,” said Farooq Kathwari, chairman, president and CEO. “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.”

The company closed the quarter with no outstanding debt.

Ethan Allen has whittled away at overhead, reducing inventory by 4.2% year-over-year to $143.2 million. The company ended the quarter with 3,347 employees, down 8.5% from a year ago and 27.9% less than at the end of the pre-pandemic quarter in the 2019.

“Strengthening our team and investing in technology is a game changer. These two important factors have helped us to operate more efficiently,” said Kathwari.

He also referenced the impact from Hurricane Helene in North Carolina. “As previously disclosed, one of our distribution centers located in Old Fort, N.C., 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.”

Employees at the N.C. facility 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