Ethan Allen reported a solid QQ1 2025 with revenue of $154.3 million and a robust gross margin of 60.8%, delivering an adjusted operating margin of 11.5% and an reported operating margin of 11.38% despite a softer demand environment. The quarter reflected a modest year-over-year revenue decline (−5.83%) driven by weaker contract sales and lower delivered unit volume, while backlogs remained supportive, particularly in wholesale with $63.9 million in orders, down 15.2% YoY but up from June 30 on timing of orders. Management emphasized disciplined cost control, a vertically integrated North American manufacturing model, and a technology-enhanced design-and-service ecosystem that helped maintain margins amid industry headwinds. Importantly, the company ended the quarter with a strong liquidity position (cash and investments ≈ $186.4 million) and effectively minimal net debt, supported by substantial cash generation (operating cash flow of $15.1 million) and ongoing capital returns (special dividend of $0.40 per share and regular dividend of $0.39 per share). Headline commentary focused on strategic investments in manufacturing in Mexico and technology, the redesign of design centers to boost productivity, and a cautiously optimistic view on demand as macro conditions stabilize. The management team signaled continued focus on talent, marketing, service, technology, and social responsibility, while keeping a watchful eye on political and macro risks that could influence consumer demand and supply chains. Overall, Ethan Allen appears positioned to weather near-term softness and potentially expand margins if housing demand recovers and orders reaccelerate, supported by a favorable cost structure and geographic concentration advantages.