We are, as I mentioned, less impacted due to these tariffs because of the fact that most of our manufacturing, especially in furniture is made in North America.
— Farooq Kathwari
03Detailed Report
ETD
Company ETD
Period
Q3 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 13, 2026
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Executive Summary
Ethan Allen delivered a solid QQ3 2025 performance characterized by robust gross margins, disciplined cost management, and positive operating cash flow against a backdrop of macro headwinds. Reported net sales of $142.7 million and a gross margin of 61.2% supported by lower raw material costs, reduced headcount, and a higher average ticket. Operating income reached $10.997 million with an operating margin of 7.71%, while net income came in at $9.605 million and diluted EPS at $0.37–$0.38. The company generated $10.18 million of cash from operations and finished the period with approximately $183 million in cash and investments, alongside a debt position that remains a point of discussion given the balance sheet shows total debt of $122.9 million and net debt of $57.1 million, despite management commentary about no outstanding debt on the call. Management highlighted a resilient balance sheet and ongoing capital discipline, including dividends and capex focused on retail design centers and manufacturing technology.
Key Performance Indicators
Revenue
Decreasing
142.70M
QoQ: -9.26% | YoY: -2.54%
Gross Profit
Decreasing
87.36M
61.22% margin
QoQ: -7.89% | YoY: -2.62%
Operating Income
Decreasing
11.00M
QoQ: -39.43% | YoY: -22.38%
Net Income
Decreasing
9.61M
QoQ: -35.98% | YoY: -25.85%
EPS
Decreasing
0.38
QoQ: -35.59% | YoY: -25.49%
Revenue Trend
Margin Analysis
Financial Highlights
Overview of QQ3 2025 metrics with YoY and QoQ context where available:
- Revenue: $142.695 million; YoY change -2.54%; QoQ change -9.26%
- Gross Profit: $87.356 million; gross margin 61.2%; Gross profit YoY change -2.62%; QoQ change -7.89%
- Operating Income: $10.997 million; operating margin 7.71%; YoY change -22.38%; QoQ change -39.43%
- Net Income: $9.605 million; net margin 6.73%; YoY change -25.85%; QoQ change -35.98%
- EPS (diluted): $0.37; basic $0.38; YoY EPS change -25.49%; QoQ change -35.59%
- Cash Flow: Operating cash flow $10.18 million; free cash flow $8.20 million; capital expenditure $1.98 million; dividends paid approximately $9.97 million; cash at end of period $66.38 million; total cash and investments circa $183 million; net debt approx. $57.1 million; current ratio 2.29; quick ratio 1.34; cash ratio 0.42.
- Balance Sheet: Total assets $738.74 million; total liabilities $259.59 million; total stockholders’ equity $479.24 million; inventory $150.38 million; accounts receivable not disclosed; short-term debt $27.79 million; long-term debt $95.06 million; inventory turnover 0.368x; days inventory outstanding ~245 days; receivables turnover 19.52x; debt-to-equity ~0.26; P/B ~1.48; P/S ~4.96; dividend yield ~1.41%.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
142.70M
-2.54%
-9.26%
Gross Profit
87.36M
-2.62%
-7.89%
Operating Income
11.00M
-22.38%
-39.43%
Net Income
9.61M
-25.85%
-35.98%
EPS
0.38
-25.49%
-35.59%
Key Financial Ratios
Gross Profit Margin
Excellent
61.20%
Gross profit margin is exceptional, indicating strong pricing power and operational efficiency
Operating Profit Margin
Fair
7.71%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Fair
6.73%
Net profit margin is moderate, room for improvement in cost management
Return on Assets
Weak
1.30%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
2.00%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
2.29
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Conservative
0.26
Debt-to-equity shows conservative leverage and low financial risk
P/E Ratio
Fair Value
18.43x
P/E ratio in line with market averages
Price to Book
Fair Value
1.48x
Price-to-book ratio reasonable for profitable companies
Management Insights Available for Members
Get exclusive access to management commentary, earnings call quotes, and forward guidance from company leadership.
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