Ethan Allen Interiors (ETD) 30 Oct 242025 Q1 Earnings call transcript

Good afternoon, and welcome to the Ethan Allen Fiscal 2025 First Quarter Analyst Conference Call. [Operator Instructions] Please note, this conference is being recorded. It is now my pleasure to introduce your host, Matt McNulty, Senior Vice President, Chief Financial Officer and Treasurer. Thank you.

You may begin.

Thank you, [ Shamali ]. you XXXX us First thank Ethan to and Fiscal Allen's Quarter afternoon, for today joining discuss Good Results. With our me Chairman, Kathwari, President and today CEO. is Farooq Mr. remarks, to Kathwari I through. our and will prepared open will financial our speak performance midway close while we prepared open then remarks, questions. the After for will our call

today's Before A website. trends release, believe audience and Relations We will There, Events you performance this tab Relations and call the like will in measures Investor call find replay non-GAAP the is call available the a I'd business. release. Investor we under operating copy press the and of of the remind non-GAAP being of News which our reconciliations website. our page of referred begin, to made press our be the that this transcribed live presentation contains also to better on on financial underlying of on reflects

update matters The I'm our Please of revise risks. a obligation now filings statements turn could company to pleased discussed differ risks may described to to that in results include forward-looking or subject comments are most The our affect to materially. actual Kathwari. assumes Our over cause complete SEC those any that our Mr. significant during this no that, review for risk refer future report to Form forward-looking call. With today XX-Q. could call are on factors the that results quarterly uncertainties and to

Thank you, Matt.

of a XX.X%. margin of financial pleased continued gross $XXX.X We operating of our As income had million, our stated first quarter we in results. $XX.X fiscal margin XXXX release, with press with are strong of million XX.X%, sales

cash Board $XXX.X We and quarter a with and $XX.X the regular in and dividend during the strong ended cash million approved generation $X.XX million We dividends also cash investments. cash of continued quarter key paid the XXXX. After continued a areas of to strengthen Matt payable brief review X our our the responsibility. per marketing, and Matt? service, focus I technology, results, provides will XX, social overview of share talent, November in financial

Kathwari. Mr. you, Thank

in margins economic quarter results cash just-completed strong financial first challenging a flow highlighted were by environment. the operating Our and amid

housing orders decreased has designer were million, a not X.X%. Lower orders. last year, average higher to Strong margin demand incoming margin From a contract headcount, segment incoming and XX.X% sales home rebounded saw consolidated in increases, operating the XX.X% XX.X% increase contract and more in price, On with was qualified net from costs. Adjusted market, a market XX.X% delivered primarily by we and yet strong perspective, quarter $XX.X down reflect X.X%, orders. since soft $XXX.X September traffic, X.X% volume. unit a a of a the with contract positive ended lower backlog furnishings ticket orders timing to orders mix, reduced year of decline due of selective XX consolidated material June sales contract for our input the while a Our sales driven gross raw a but business. note, $XX.X and less down wholesale with million lower were an segment in ago. year We a compared was wholesale retail due calls, home that incoming million, ago, of change month price up down compared

pre-pandemic Our margin adjusted operating first controlling to our to improved operating our XXX integrated vertically Compared points due operating ended approach ability expenses. double-digit reflects to XXXX, margin streamlining disciplined enterprise. a has September maintain our basis quarter our to

related center inventory disruption as as center of work on in located update Now to Fort, temporary well $X.X costs loss suffered September. and our Carolina, and damaged was distribution to provide in an which million stoppage North late Old Helene distribution impacted a by like I'd Hurricane in The remediation shipments. a

associates the our second Hurricane returned East advance we on that $X.XX. resumed of thankful the have approximately and $X in Coast quarter impact normal Helene combined work quarter. Adjusted during are was of disruptions center up to to and which temporary our expect million, operations. import diluted catch to sales by report has port The distribution We lowered EPS net first strike our

ended historical For for the X EPS diluted adjusted context, XXXX months was $X.XX. September

Our XX% taxes. state rate from rate was quarter, which the statutory due effective tax XX.X% to varies the for federal primarily

and in balance technology, included no operations Now and including turning levels quarter inventory a with expansion of design and costs Mexico, in $XXX.X by remodeling relocations with ended $X.X operating million investments We cash our the We investments $XX.X center and associated improvements, activities were and our of retail million from generated X.X%. manufacturing sheet, additional of outstanding hotel. expenditures robust to Capital liquidity. debt. reduced cash and million

quarterly both our share, special in In to also continued dividend were returning paid capital practice dividends. our to declared August a cash on form the cash We $X.XX of $X.XX Board dividend of regular cash of shareholders per XX. July, per share addition of our which in of

business have disciplined ended to cash positive a We our in flow cash that, in operating now these I margins during a just protecting a continuing X results to Kathwari. with and summary, dividend progress. With $X.XX per of look be dividend solid earnings and over regular a will quarter forward Also, achieved balance We the in the margin robust which headwinds. through the call a turn quarterly $XX.X of back our operating as execution. sheet November. In million years. industry-wide our and our investments by while will generated We Mr. each period release, share, past cash special vertically paid produced paid announced marked our in Board double-digit integrated declared

focus you, X will on the Matt. briefly areas. our I Thank discuss continued

talent. first The is

strong accelerated marketing retail and under our teams umbrella with logistics, in the integrated modern perspective. design of enterprise, We technology. In continue develop products products, our we includes of to manufacturing, which marketing, new have introduction a merchandising, classic and vertically network,

coupled with redesign the of have strong has enabled of design efficient. it completed with game-changer. design design This reflect months, Strong space, interior under floor productivity centers great interior is, a our more technology. During The less and strong headcount. destination we I design XX% interior the the redesigned with umbrella design said, associates, as less centers about technology have last XX an much display making

North productivity provided and manufacturing, lowered orders. designers have refine continued of about a custom-made which makes and of great we inventory. our to is American our our also has This receipt to XX% Next, furniture options differentiator and increased and and interior more clients design on

our enabling North clients our us America. have made improvements We at price and also one logistics, national to in to products retail our deliver to

X.X% to about X% as advertising X to about benefits compared about of of sales costs also sales years marketing back. Our from with technology our of X

We cash cash strong are and cash while of September ended pleased XX, we cash gave at to providing with good September ending of continue million million million XXXX. $XX.X XX, dividend Quarter compared $XXX.X $XXX.X to maintain to dividends.

position forward, a in remain good we move optimistic. we are As and cautiously

stage, are are, any at would stability. With I the some through or And We over, these chances that, think and comments. for after uncertain are questions some political this we going to elections pleased times, that domestically both open internationally. get I'm more

Capital line question first of Zick Instructions] the from Markets. [Operator KeyBanc with Our comes Taylor

cadence to on Taylor about the Trends during Thomas. start a can quarter. of bit fiscal softer XQ. Zick I written we wanted It's the were maybe just orders for than Brad talk if

And saw, thoughts Labor what a trending I can you you Day bit talk like? guess you about have how October so more what maybe then were is little far? on trends So if any

Yes.

that from relatively And I month there held orders think major a speaking, to written month. change our up. was not

terms a of look was we less, when that the it sales, changes. of at take the remained somewhat think the without much retail lower or more I say, our would throughout in quarter, -- sort I

and given XX% could that you product kind election, there mentioned, manufactured kind I be And the I from us. tailwind in Great. a of think are also impacted. competitors that some America, look we insulated be that relatively at North And But you your potential you'd a as outcome then to is would about of potential if Farooq, potential may the maybe just want talk we behind assume tariffs. any -- upcoming be for of here all your tariffs,

So about takes you I some that, guess of as as the tariffs? are think think about what you any puts and

a there's because stage, we see are is of of includes -- happens. are, course, our States, this Honduras. America, Mexico the XX% we treaty. to just United have At talk. products North mean includes what we which of I Yes. -- and We which where made American lot in North That's have

So we It's question. a good everything. are watching

course, politics the on going of internationally they're, coming mostly is We from about with overseas. tariffs talking are all watching

don't we much XX% were here. freight we don't North hear changing watching making also of do somewhat about we're carefully. we or higher So but tremendous it XX% American the treaty, from overseas overseas, you uncertainty. When if But here. Suez coming for we products the benefit at product XX% -- the even that have what's with though going the And pay are war take look we we only on with impacted the fortunately rates Canal, the happening but our the impact the of we -- not XX%. a XX%, freight of with make

have So mentioned, advantage. this we at we're watching you do it very an stage, But as carefully.

can industry The then has squeeze Farooq, begin here And a recovery cut Ethan broadly. the potential the one those maybe rates -- in Allen road. to on and business. be Fed if curious I one more maybe there's Understood. impact what are obviously last general, the to here, your your on rates in like and in September. the on I'm between And lag more down it thoughts going rate cuts effect for looks

normal the Yes. benefited this period. Also, we degree, everybody more created over past during us reflected now the and times. keep to were mind now COVID But else. great that a quarter backlogs in that quarter that are the That

backlogs. little sales, that pretty there's used already which even the is little our considering So decline up in a good we the fact very had small

I forward, we So we are cautiously think And pretty good. I that optimistic. think did going

-- are we we have terms of very our very think marketing, very, network. positioned strong a in well I our

Combining comments, enterprise. interior -- technology personal and most service mentioned importantly, to reduced have And our our combining headcount just good designers keep It's our helping integrated is my our interior have is and helping critical. more retail as key We manufacturing. because, designers design technology where I business. less few it's than we mind, everywhere interior in in vertically good we XX% back, a years doing our had

think focusing I this again. we we homes out, more stuff cautiously an should that opportunity of going on with So have and all that election optimistic crazy are their consumers

of Our Cristina line comes Telsey the next Group. Advisory question Fernandez from with

October any in guess, specific that couple during you wanted a a talk the those And start Can I trends lagging seeing to you guess, that you're how quarter. trends? from by the have here on storms? up -- about I or to demand the the how of I follow questions. the seeing storms, regional you I impacted Are states that as effect are were recovering? you saw

Yes, that's we a good impacted. were question because

tremendous we in Texas. First, had floods

So impacted. especially was that Houston all and area

more less impacted good less normal our end good of September. all Now operating Then or impact normal. we retail They're storms news our written the getting degree. carefully. and impacted also with business in that to impacted did we great they're degree, is very also We got at it Florida, more news some a and But watch to have level. or back to the a to that in is

centers, major some we it news we to, catching in major, operations, some have this impacted Asheville, time, people, are got also Matt for we distribution to closed good It a now with impacted but very storms are impact to was our up. Then business business starting strike which our is catch degree last business, the was too to terms our of but in to just The our major in, good referred couple impact tremendous was But October, the it are impacted. for they're We back. normal. which of somewhat. stopped didn't on strikes. they department products fortunately exports, did. lot then more especially less, of dock It a getting coming It is few long, or back a news days, both next state but

you last the that year, that second my the areas X%, most then done X% headcount headcount question Where release, called have was press the what out in you've on from? the on impacted? coming And reduction out been over is

else, impact our retail with great to It at mean, very combination other retail again, both little this areas. in our important. is is other impacted been really degree strong have been uncertainties we manufacturing at in very, retail. I our staffs, we able retail, it in coming with of the One and also to benefit also that acquire has did our acquire manufacturing. those been talent. to of manufacturing. And but is in technology. turnover, We've an has the been X of workplace and stronger of especially very -- the a talent but a reducing have our That's utilizing everything It -- at able our and -- also have And tremendous and have major both the benefit been

challenges what we have stability, to of we but trend us attract an but programs, opportunity, while because lowered people. Overall, whole I who this our people we've have taking is us we has are competition. and stronger -- because So with attracted but headcount, because place even been have able some our stronger added to we've have also less issues, headcount, though people given of of

are So those X Cristina. areas,

'XX. those centers? are year on introductions As -- of how incremental was And about new? you color the can color then new helpful. in I question Any design your you've that much a is talking percentage been they fiscal already being received? there the products How product give would for another Are be total, had

Yes, we have back, design one On centers. feet XX,XXX good to we years our Cristina, feet. reduced to square went XX,XXX of question. from size average XX,XXX X under an hand, the X, of

olden mind, major options, said which options maybe of have work a terms XX%, the productive, designers in interior of they're also space, some means that personal have we use in we floor management our help. a client, with of new them, keep been in great floor of our has less into can when all these centers, designers XX% service that And work helped they using inventory go technology. Combining space. our our technology us our not more and them that of has almost have products the today, design been their in but technology, a new the can to the the designers clients. design days, more But And products in today, most design they're that our centers. reduction is though our center. In in are that But having designers product with introduced even have with use So had products. with we in with product this, that our it

had side on on of And cost you're the business. last the I question trends the the seeing was

are You mentioned raw the going those supply Are what trends product Are in stable? chain. going But they materials, up, costs? down?

is little bit haven't the because raw Yes. gone up from down, or competitors. or a of They especially lower more stable, are side less materials, on a there lower demand our

keep in made in products obviously, a raw are this tell Honduras, from made the United the gives Mexico the They cannot sawmills us. whether Vermont. North our from Honduras mind, wood upholstery. in advantage in made than that mind and products United in the supplied Carolina to that all item have is our is of our the made thing we Honduras. with or -- service. them Same materials, that with client lower So great we in -- we believe our in case Honduras are us wood X in opportunity States Today, difference the Mexico. an all they're supply for the Vermont, is in are stability combining of Combining or in It But and the is in that talent operating cost States. but

no floor would remarks. to like this And the Kathwari back Farooq there time. I further to are questions for closing at turn

in stability all terms forward are Thank news kinds more environment of you. I'm and we to right. Good positioned international And is environment the well. and political looking problems. All the of

terms also progress -- We areas. of lots in all of made in

As talent. I said, first,

really stronger talent. a have We

an people. marketing. more our reach us has to Secondly, we have opportunity increased Marketing given much

critical we And it's do. believe social strongly a is provide to We Third, all great fourth, is things. responsibility. in which And whether retail. in fifth service, ability our and those technology areas

do continuing and So we to our we're areas grow to on our we business to going continue financial these focus have and believe to that, and strong look important forward results. continue X

This participation. teleconference. today's We you. Thank does thank your you for conclude

lines your disconnect this time. at may You

much. very Thanks