Ethan Allen Interiors Inc (ETD) Q1 2026 Earnings Report

Revenue and profitability momentum:
- Revenue: $146.984 million, YoY change: -12.84%, QoQ change: +3.01%.
- Gross profit: $90.198 million; gross margin 61.37%; YoY gross profit decline -11.90%; QoQ gross margin growth +3.25%.
- Operating income: $9.967 million; operating margin 6.78%; YoY operating income decline -54.42%; QoQ margin change -9.37%.
- Net income: $10.451 million; net margin 7.11%; YoY net income change -43.55%; QoQ net income growth +8.81%.
- Diluted EPS: $0.41; EPS YoY change -43.84%; QoQ change +7.89%.
Backlog and demand signals:
- Retail written orders grew 5.2% year over year, reflecting improved order conversion and brand strength, despite lower traffic.
- Wholesale orders declined 7.1% YoY due to reduced contract activity and government-related spending pressures; wholesale backlog stood at $53.5 million at quarter-end, with a $4.7 million increase over the previous three months driven by timing of incoming orders.
Cash flow and liquidity:
- Net cash provided by operating activities: $2.025 million; capex: $2.404 million; free cash flow: -$0.379 million.
- Dividends: paid cash dividends of $16.363 million; no debt at quarter-end per management commentary, but the balance sheet shows total debt of $125.367 million and net debt of $51.719 million, indicating a debt-adjusted liquidity profile rather than a debt-free stance.
- Cash position and liquidity: reported cash and investments balance of $193.7 million (per management on the call), while the balance sheet reflects total cash (and equivalents) around $73.65 million and cash-related investments influencing net debt calculations. Net cash position as per the balance sheet reflects a mixed liquidity profile with a notable debt load relative to cash on hand.
Balance sheet and capital structure:
- Total assets: $737.106 million; total liabilities: $261.717 million; total stockholders’ equity: $475.476 million.
- Current ratio approximately 1.90x (current assets $299.34 million vs. current liabilities $157.54 million).
- Debt mix: short-term debt $26.873 million; long-term debt $98.494 million; total debt $125.367 million; net debt approximately $51.719 million (total debt minus cash and equivalents).
Operational efficiency and structure:
- Headcount: 3,189 at quarter-end, down 4.7% year over year.
- North American manufacturing and design footprint: ~75% of furniture produced in North America; 173 North American design centers (143 company-operated, 30 independently owned). The firm continues to consolidate distribution into a single major center while reducing company-operated centers by roughly 35% over 10 years. Management highlights a one-price, white-glove delivery model across North America.
Market dynamics and pricing:
- Tariff exposure remains dynamic; management indicated price increases in the 5–10% range in certain regions/products, with a broader mix of North American manufactured goods helping to mitigate tariffs, but non-furniture product lines sourced overseas facing more tariff exposure.
- Marketing: National-level marketing expense rose to 3.4% of net sales from 2.4% year-ago, a roughly 44% increase, aimed at driving customer traffic and higher average ticket through enhanced digital, direct mail, and paid media efforts. Management expects to realize benefits over time from these investments.
Strategic initiatives:
- New product introductions and a spring 2026 product launch are in the pipeline, with ongoing emphasis on technology-enabled manufacturing, design-center reinvestment, and marketing to strengthen the Ethan Allen brand.
- The enterprise remains focused on growing high-margin, customized solutions and maintaining a vertically integrated architecture to preserve pricing integrity and service quality.