Ethan Allen Interiors Inc. Reports Q3 2024 Results

TL;DR

<b>Ethan Allen Interiors Inc. experienced a 10.2% decline in net sales for Q3 FY24, driven by decreases in both wholesale and retail segments.</b>

AI Summary

ETHAN ALLEN INTERIORS INC (ETD) filed a Quarterly Report (10-Q) with the SEC on April 24, 2024. Net sales for the third quarter of fiscal 2024 were $187.6 million, a decrease of 10.2% compared to $208.9 million in the prior year period. Wholesale net sales decreased 14.8% to $84.7 million for Q3 FY24, compared to $99.4 million in Q3 FY23. Retail net sales decreased 5.9% to $102.9 million for Q3 FY24, compared to $109.5 million in Q3 FY23. Gross margin for the third quarter of fiscal 2024 was 55.4%, compared to 56.0% in the prior year period. Operating income for the third quarter of fiscal 2024 was $18.5 million, a decrease from $26.1 million in the prior year period.

Why It Matters

For investors and stakeholders tracking ETHAN ALLEN INTERIORS INC, this filing contains several important signals. The decrease in net sales suggests a softening demand in the furniture market, potentially impacting future revenue and profitability. The slight dip in gross margin, despite lower sales, could indicate increased cost of goods sold or promotional activities to drive sales.

Risk Assessment

Risk Level: medium — ETHAN ALLEN INTERIORS INC shows moderate risk based on this filing. The company reported a 10.2% decrease in net sales for the third quarter of fiscal 2024, indicating a slowdown in consumer spending on home furnishings.

Analyst Insight

Investors should monitor upcoming earnings reports for signs of sales recovery or further deterioration in demand.

Revenue Breakdown

Key Numbers

• 187.6 — Net Sales (Q3 FY24) (in millions of USD)
• 208.9 — Net Sales (Q3 FY23) (in millions of USD)
• 10.2 — Net Sales Decrease % (Q3 FY24 vs FY23)
• 84.7 — Wholesale Net Sales (Q3 FY24) (in millions of USD)
• 102.9 — Retail Net Sales (Q3 FY24) (in millions of USD)
• 55.4 — Gross Margin % (Q3 FY24)
• 56.0 — Gross Margin % (Q3 FY23)
• 18.5 — Operating Income (Q3 FY24) (in millions of USD)

Key Players & Entities

• ETHAN ALLEN INTERIORS INC (company) — FILER
• 20240331 (date) — CONFORMED PERIOD OF REPORT
• 20240424 (date) — FILED AS OF DATE
• DANBURY (location) — CITY
• CT (location) — STATE
• 06811 (postal_code) — ZIP
• 2037438000 (phone_number) — BUSINESS PHONE
• Q3 2024 (period) — FILING VALUES

FAQ

Risk Factors

• Economic Conditions and Consumer Spending [medium — market]: The company's financial performance is sensitive to overall economic conditions, including consumer confidence and discretionary spending on home furnishings.
• Supply Chain and Inventory Management [medium — operational]: Disruptions in the supply chain or challenges in managing inventory levels can impact production costs and product availability.

Key Financial Figures

• $0.01 — ection 12(b) of the Act: Common Stock, $0.01 par value ETD New York Stock Exchan

Filing Documents

• eth20240331_10q.htm (10-Q) — 1936KB
• ex_657428.htm (EX-31.1) — 14KB
• ex_657429.htm (EX-31.2) — 14KB
• ex_657430.htm (EX-32.1) — 6KB
• ex_657431.htm (EX-32.2) — 6KB
• image1.jpg (GRAPHIC) — 5KB
• 0001437749-24-013022.txt (&nbsp;) — 8156KB
• eth-20240331.xsd (EX-101.SCH) — 63KB
• eth-20240331_def.xml (EX-101.DEF) — 414KB
• eth-20240331_lab.xml (EX-101.LAB) — 357KB
• eth-20240331_pre.xml (EX-101.PRE) — 457KB
• eth-20240331_cal.xml (EX-101.CAL) — 59KB
• eth20240331_10q_htm.xml (XML) — 1461KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 2 CONSOLIDATED BALANCE SHEETS 2 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) 3 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 4 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) 5 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 6

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 19

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 32

Controls and Procedures

Item 4. Controls and Procedures 34

- OTHER INFORMATION

PART II - OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 35

Risk Factors

Item 1A. Risk Factors 35

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 35

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 35

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 35

Other Information

Item 5. Other Information 35

Exhibits

Item 6. Exhibits 36

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except par value) March 31, 2024 June 30, 2023 (Unaudited) ASSETS Current assets Cash and cash equivalents $ 63,862 $ 62,130 Investments 82,356 110,577 Accounts receivable, net 7,991 11,577 Inventories, net 144,474 149,195 Prepaid expenses and other current assets 27,627 25,974 Total current assets 326,310 359,453 Property, plant and equipment, net 219,013 222,167 Goodwill 25,388 25,388 Intangible assets 19,740 19,740 Operating lease right-of-use assets 114,023 115,861 Deferred income taxes 929 640 Other assets 36,813 2,204 TOTAL ASSETS $ 742,216 $ 745,453 LIABILITIES Current liabilities Accounts payable and accrued expenses $ 24,774 $ 28,565 Customer deposits 80,526 77,765 Accrued compensation and benefits 19,057 23,534 Current operating lease liabilities 27,208 26,045 Other current liabilities 4,544 7,188 Total current liabilities 156,109 163,097 Operating lease liabilities, long-term 100,974 104,301 Deferred income taxes 3,032 3,056 Other long-term liabilities 4,763 3,993 TOTAL LIABILITIES $ 264,878 $ 274,447 Commitments and contingencies (see Note 19) SHAREHOLDERS' EQUITY Preferred stock, $ 0.01 par value; 1,055 shares authorized; none issued $ - $ - Common stock, $ 0.01 par value, 150,000 shares authorized, 49,550 and 49,426 shares issued; 25,412 and 25,356 shares outstanding at March 31, 2024 and June 30, 2023, respectively 495 494 Additional paid-in capital 387,739 386,146 Treasury stock, at cost: 24,138 and 24,070 shares at March 31, 2024 and June 30, 2023, respectively ( 684,796 ) ( 682,646 ) Retained earnings 774,813 769,819 Accumulated other comprehensive loss ( 860 ) ( 2,785 ) Total Ethan Allen Interiors Inc. shareholders' equity 477,391 471,028 Noncontrollin

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