DANBURY, Conn. -- Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE: ETD) today reported its financial and operating results for the fiscal 2023 full year and fourth quarter ended June 30, 2023.

Farooq Kathwari, Ethan Allen’s Chairman, President and CEO commented, “We are pleased with our financial and operating results for the fiscal 2023 full year and fourth quarter ended June 30, 2023. For the fiscal year, we reported consolidated net sales of $791.4 million, gross margin of 60.7%, adjusted operating margin of 16.9% and adjusted diluted EPS of $4.03. We continue to generate strong operating cash flow and as of June 30, 2023, we had total cash and investments of $172.7 million and no debt. For our fourth quarter ended June 30, 2023, we delivered consolidated net sales of $187.4 million, gross margin of 61.5%, adjusted operating margin of 16.3% and adjusted diluted EPS of $0.96. During our fiscal year ended June 30, 2023, we distributed $46.4 million of cash dividends. We are also pleased to announce that yesterday our Board approved a special cash dividend of $0.50 per share and our regular quarterly cash dividend of $0.36 per share, both payable on August 31, 2023.”

Mr. Kathwari continued, “I would like to thank our team for continuing to develop a strong entrepreneurial enterprise with a focus on great quality, service and strong financial results. As we enter the post COVID-19 era, we believe we are well positioned. During the last three years we have strengthened major areas of our vertically integrated enterprise including talent, marketing, service, technology and social responsibility.”

“Our focus moving forward will continue to strengthen the various areas of our vertically integrated structure, including developing a strong team which is entrepreneurial and disciplined, enhancing our product offerings under the umbrella of Classics with a Modern Perspective, repositioning our retail network as an Interior Design Destination and ongoing investments in technology to further enhance our marketing, our North American manufacturing and our logistics. While we understand the challenges of a slower economy and the reduction of consumer focus on the home that had occurred due to the COVID-19 pandemic, we remain cautiously optimistic due to our many initiatives over the last three years,” concluded Mr. Kathwari.

FULL FISCAL YEAR 2023 HIGHLIGHTS*

-Consolidated net sales of $791.4 million were lower by 3.2%:

-- Retail net sales of $662.6 million were lower by 4.0%

-- Wholesale net sales of $449.6 million were lower by 7.1%

Written order trends: 
-- Retail segment written orders increased 0.8% compared with pre-pandemic fiscal 2019; down 12.3% compared with fiscal 2022
 
-- Wholesale segment written orders decreased 2.1% compared with fiscal 2019; down 9.0% from last year

Consolidated gross margin rose to 60.7%; adjusted operating margin improved to 16.9%
 
Diluted EPS of $4.13 compared with $4.05; adjusted diluted EPS of $4.03 increased 2.5%
 
Generated $100.7 million of cash from operating activities, up from $69.4 million a year ago
 
Paid cash dividends of $46.4 million; increased the Company’s regular quarterly cash dividend by 12.5% in April 2023 and paid a $0.50 per share special cash dividend in August 2022
 
Ethan Allen launched its next reinvention with the grand reopening of the Danbury Connecticut Design Center as an Interior Design Destination
 
Opened multiple new design centers during fiscal 2023 that showcase the Company’s unique vision of American style while combining complimentary interior design services with technology
 
Named one of America’s Top 10 Retailers by Newsweek, including recognition as the #1 retailer of Premium Furniture
 
For the fourth year in a row, Ethan Allen’s upholstery manufacturing operation in Mexico has been named “Empresa Socialmente Responsable” (Environmentally and Socially Responsible) by the Mexican Center for Corporate Philanthropy and the Alliance for Corporate Social Responsibility
 
FISCAL 2023 FOURTH QUARTER HIGHLIGHTS

Consolidated net sales of $187.4 million were lower by 18.4%

Retail net sales of $156.2 million were lower by 17.2%

Wholesale net sales of $114.5 million were lower by 16.7%

Written order trends:

-- Retail segment written orders decreased 1.2% compared with the pre-pandemic fourth quarter of fiscal 2019; down 12.5% compared with the fourth quarter of fiscal 2022

-- Wholesale segment written orders decreased 2.5% compared with the fourth quarter of fiscal 2019; decreased 14.7% from a year ago

Consolidated gross margin increased to 61.5%, up from 58.2% a year ago due to a favorable sales mix, disciplined promotional activity and lower input costs including reduced inbound freight and raw material costs partially offset by lower delivered unit volume

Operating margin of 16.9%; adjusted operating margin of 16.3% compared with 18.5% last year due to lower consolidated net sales, higher retail delivery and health insurance costs, and new product display, merchandising and sample costs partially offset by gross margin expansion and the Company’s ability to maintain a disciplined approach to cost savings and expense control; selling, general and administrative expenses decreased 7.6% and equaled 45.1% of net sales, an increase from 39.8% last year due to fixed cost deleveraging on lower sales

Advertising expenses were equal to 1.9% of net sales compared to 1.5% in the prior year fourth quarter; increased use of digital and direct mail advertising to further penetrate the market; promotional activity remained disciplined and was comparable to the prior year
Diluted EPS of $0.99 compared with $1.23; adjusted diluted EPS of $0.96 decreased 23.2%

Generated $26.3 million of cash from operating activities compared to $29.4 million a year ago

Paid regular quarterly cash dividends totaling $9.2 million, up 12.7% from last year

Ended the quarter with $172.7 million in cash and investments with no debt outstanding

Reduced inventory levels to $149.2 million as of June 30, 2023, down $27.3 million or 15.5% from a year ago

See the full financial report here.