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ETD NYSE· Ethan Allen Interiors, Inc
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ETD NYSE· Ethan Allen Interiors, Inc
Earnings report Q4 2023

ETD Reports Decline in Revenue for Latest Quarter

Segments of revenue

ETD's consolidated net sales for the latest quarter were $167.3 million, representing a significant decline of 17.7% compared to the same period last year. This decrease was primarily driven by a decline in delivered volume resulting from lower available backlog, reduced production within the Vermont manufacturing plant, and slowing demand.

Strengths

Despite the challenging market conditions, ETD maintained a robust balance sheet with a strong gross margin of 60.2% and a double-digit operating margin. The company ended the quarter with cash, cash equivalents, and investments totaling $167.8 million, and no outstanding debt. ETD's disciplined cost control initiatives contributed to an adjusted operating margin of 12.8%. Additionally, the company continued its history of returning capital to shareholders by declaring a regular quarterly cash dividend of $0.36 per share.

Challenges

ETD faced several challenges during the latest quarter, including a slower economy, reduced consumer focus on the home, inflationary pressures, ongoing high interest rates, and a slow housing market. These factors negatively impacted demand, leading to a decline in retail written orders by 9.4% compared to the previous year.

Noteworthy

ETD's consolidated gross margin of 60.2% was primarily driven by lower raw material and freight costs, although it was offset by lower unit volume sales and a change in sales and product mix. The company's adjusted diluted earnings per share for the quarter were $0.67, down from $1.10 in the same period last year. However, cash generated from operations significantly increased to $13.6 million, compared to $2.5 million in the prior year quarter.

Summary

ETD's latest quarter performance reflected a decline in revenue, primarily due to lower delivered volume and slowing demand. Despite these challenges, the company maintained a strong gross margin and double-digit operating margin, demonstrating disciplined cost control. ETD's robust balance sheet, with no outstanding debt and significant cash reserves, provides a solid foundation for future growth. However, the company needs to address the ongoing challenges in the market, including a slower economy and reduced consumer spending on home-related products.

Source documents

Form 10-Q  filed on Jan 24, 2024
87 pages scanned

Reference data

Company financials Q4 revenue 167M
Analyst estimates Q4 EPS missed by -11.84%
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