Ethan Allen Interiors Inc. Q4 FY2025 earnings call

• The vertically integrated structure enabled strong results. Fiscal 2025 had strong margins, positive operating cash flow, and a robust balance sheet. • Initiatives focus on talent, marketing, service, technology, and social responsibility. • About 75% of furniture is made in North American workshops. Logistics operations were adjusted, reducing national locations and warehouses. • Technology plays a central role in operations and marketing, with a shift to digital mediums. • Maintained strong gross and operating margins despite industry challenges.

Ethan Allen's fiscal 2025 consolidated net sales were $614.6 million, with fourth quarter sales of $160.4 million. The consolidated gross margin for the full year was 60.5%, comparable to 60.8% last year. In the fourth quarter, consolidated gross margin was 59.9%. Retail written orders rose by 1.6% during the fourth quarter, while wholesale orders decreased by 6.8%. The company ended the fiscal year with wholesale backlog of $48.9 million.

• The robust balance sheet and financial stability provide a solid foundation for fiscal 2026. • Focus on executing strategic initiatives amid ongoing macro uncertainty.

• Most significant risk factors affecting future results are described in the most recent annual report on Form 10-K, including risks related to economic conditions, international conflicts, tariffs, etc.

Q: Brad Thomas asked about industry trends and tariffs, seeking more color on quarter performance and customer feedback.

A: Farooq Kathwari noted written orders were up 1.6% in Retail despite challenges, and tariffs had limited impact due to North American manufacturing.

Q: Cristina Fernandez followed up on trends, gross margin, promotions, price increases, and Retail orders.

A: Farooq Kathwari discussed use of promotions, minimal impact of price increases on unit sales, and Retail orders being a combination of consumer attitudes, new introductions, and marketing expenditures.