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What changed in ETHAN ALLEN INTERIORS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ETHAN ALLEN INTERIORS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+316 added−325 removedSource: 10-K (2025-08-22) vs 10-K (2024-08-23)

Top changes in ETHAN ALLEN INTERIORS INC's 2025 10-K

316 paragraphs added · 325 removed · 235 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

57 edited+19 added−23 removed13 unchanged
Biggest changeWe selectively outsource the remaining 25% of our products, primarily from Asia. Our sourcing partners must adhere to our quality standards, specifications and social responsibility. If any of these suppliers experience financial or other difficulties, we believe we have alternative sources of supply to prevent temporary disruptions in our imported product flow.
Biggest changeIf any of these suppliers experience financial or other difficulties, we believe we have alternative sources of supply to prevent temporary disruptions in our imported product flow. We believe our strategic investments in manufacturing facilities and the sourcing from foreign and domestic suppliers positions us to accommodate future growth while retaining control over costs, quality and customer service.
Clients can view items in 3D, read product details, share, and save item lists, and utilize augmented reality views in their homes, either via a QR code on their desktop or directly when browsing on a mobile device.
Clients can view items in 3D, read product details, share, save item lists, and utilize augmented reality views in their homes, either via a QR code on their desktop or directly when browsing on a mobile device.
The contents of this website section are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document the Company files with the SEC and any reference to this section of our website is intended to be inactive textual references only. 10 ETHAN ALLEN INTERIORS INC.
The contents of this website are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document the Company files with the SEC and any reference to this section of our website is intended to be inactive textual references only. 10 ETHAN ALLEN INTERIORS INC.
Corporate Contact Information Ethan Allen Interiors Inc. is a Delaware corporation with its principal executive office located in Danbury, Connecticut. ● Founded in 1932 and Incorporated in Delaware in 1989 ● Mailing address of the Company’s headquarters: 25 Lake Avenue Ext., Danbury, Connecticut 06811-5286 ● Telephone number: +1 (203) 743-8000 ● Website address: ethanallen.com Information about our Executive Officers Listed below are the names, ages and positions of our current executive officers and, if they had not held those positions for the past five years, their former positions during that period with Ethan Allen or other companies.
AND SUBSIDIARIES Corporate Contact Information Ethan Allen Interiors Inc. is a Delaware corporation with its principal executive office located in Danbury, Connecticut. ● Founded: 1932 ● Incorporated in Delaware: 1989 ● Mailing address of the Company’s headquarters: 25 Lake Avenue Ext., Danbury, Connecticut 06811-5286 ● Telephone number: +1 (203) 743-8000 ● Website address: ethanallen.com Information about our Executive Officers Listed below are the names, ages and positions of our current executive officers and, if they had not held those positions for the past five years, their former positions during that period with Ethan Allen or other companies.
Seasonality We believe that the demand for home furnishings generally reflects sensitivity to overall economic conditions, including consumer confidence, discretionary spending, housing starts, sales of new and existing homes, housing values, interest and inflationary rates, the level of mortgage refinancing, retail trends and unemployment rates. In a typical year, we schedule production to maintain consistent manufacturing activity throughout the year.
Seasonality We believe that the demand for home furnishings generally reflects sensitivity to overall economic conditions, including consumer confidence, discretionary spending, sales of new and existing homes, housing values, interest and inflationary rates, the level of mortgage refinancing, retail trends and unemployment rates. In a typical year, we schedule production to maintain consistent manufacturing activity throughout the year.
A Culture of Social Responsibility Throughout our history, philanthropy has been a core value to Ethan Allen. We strive to develop exceptional programs based on partnerships where employees feel a sense of connection and pride in their communities and our mission is to enhance the quality of life in the communities in which we work and live.
AND SUBSIDIARIES A Culture of Social Responsibility Throughout our history, philanthropy has been a core value to Ethan Allen. We strive to develop exceptional programs based on partnerships where employees feel a sense of connection and pride in their communities and our mission is to enhance the quality of life in the communities in which we work and live.
These facilities are also required to provide a safe and healthy environment in all workspaces, compliance with all local wage and hour laws and regulations, compliance with all applicable environmental laws and regulations, and are required to authorize Ethan Allen or its designated agents (including third-party auditing companies) to engage in monitoring activities to confirm compliance. 9 ETHAN ALLEN INTERIORS INC.
These facilities are also required to provide a safe environment in all workspaces, compliance with all local wage and hour laws and regulations, compliance with all applicable environmental laws and regulations, and are required to authorize Ethan Allen or its designated agents (including third-party auditing companies) to engage in monitoring activities to confirm compliance. 9 ETHAN ALLEN INTERIORS INC.
Marketing Ethan Allen’s marketing emphasizes our core brand values of quality and craftsmanship, combining personal service with technology, and a commitment to social responsibility. We amplify those values through our dynamic brand story built around a core projection and philosophy: Classics with a Modern Perspective .
Marketing Ethan Allen’s marketing emphasizes our core brand values of quality and craftsmanship, combining personal service with technology, and a commitment to social responsibility. We amplify those values through our brand story built around a core projection and philosophy of Classics with a Modern Perspective .
We are committed to sustainable business practices that incorporate social, environmental, health and safety programs into our global manufacturing, distribution, home delivery and retail design centers.
Sustainability We are committed to sustainable business practices that incorporate social, environmental, health and safety programs into our global manufacturing, distribution, home delivery and retail design centers.
Retail home delivery centers prepare products for delivery into clients’ homes. At June 30, 2024, our Company-operated retail design centers were supported by 17 Company-operated retail home delivery centers and five home delivery centers operated by third parties. We utilize independent carriers to ship our products.
Retail home delivery centers prepare products for delivery into clients’ homes. At June 30, 2025, our Company-operated retail design centers were supported by 17 Company-operated retail home delivery centers and five home delivery centers operated by third parties. We utilize independent carriers to ship our products.
Distribution and Logistics We distribute our products through three national distribution centers, owned by the Company and strategically located in North Carolina and Virginia. These distribution centers provide efficient and effective cross-dock operations to receive and ship Ethan Allen product from our manufacturing facilities and third-party suppliers to our retail network of Company and independently operated retail home delivery centers.
Distribution and Logistics We distribute our products primarily through three national distribution centers, each owned by the Company and strategically located in North Carolina and Virginia. These distribution centers provide effective cross-dock operations to receive and ship Ethan Allen product from our manufacturing facilities and third-party suppliers to our retail network of Company and independently operated retail home delivery centers.
We ended the fiscal 2024 year with 172 retail design centers in North America, including 142 Company-operated and 30 independently owned and operated locations as well as 15 additional design centers outside North America.
We ended the fiscal 2025 year with 172 retail design centers in North America, including 142 Company-operated and 30 independently owned and operated locations as well as 15 additional design centers outside North America.
Our strong network of entrepreneurial leaders and interior designers provide complimentary interior design service to our clients and sell a full range of home furnishing products through a retail network of design centers located throughout the United States and abroad as well as online at ethanallen.com.
Our strong network of entrepreneurial leaders and interior designers provide complimentary interior design service to our clients and sell a full range of home furnishing products through a retail network of design centers located throughout the United States (“U.S.”) and abroad as well as online at ethanallen.com.
AND SUBSIDIARIES Raw Materials and Supply Chain The principal raw materials we use in manufacturing are lumber, logs, veneers, plywood, hardware, glue, finishing materials, glass, steel, fabrics, leather, frames, foam and filling material. The various types of wood used in our products include soft maple, wormy maple, red oak, prima vera, birch, rubber wood and cherry.
AND SUBSIDIARIES Raw Materials and Supply Chain The principal raw materials we use in manufacturing include lumber, logs, veneers, plywood, hardware, glue, finishing materials, glass, steel, fabrics, leather, frames, foam and filling material. The various types of wood used in our products include soft maple, wormy maple, red oak, garapa, birch, rubber wood and cherry.
Our wholesale backlog consists of written orders received from our retail network of independently operated design centers, Company-operated design centers, and contract business customers that have not yet been delivered. Our retail backlog is undelivered written orders associated with end retail customers.
Our wholesale backlog consists of written orders received from our retail network of independently operated design centers, Company-operated design centers, and contract business clients that have not yet been delivered. Our retail backlog is undelivered written orders associated with retail clients.
The assessment and rankings were the result of an independent survey of more than 7,000 customers who have shopped at retail stores in person in the past three years and based on the likelihood of recommendation and the evaluation of products, customer service, atmosphere, accessibility and store layout.
The assessment and rankings were the result of an independent survey of customers who have shopped at retail stores in person in the past three years and based on the likelihood of recommendation and the evaluation of products, customer service, atmosphere, accessibility and store layout.
Our creative messaging is relevant and aspirational and conveyed through a variety of media, including digital marketing that includes social media and email marketing campaigns, plus direct mail, TV and radio. Additionally, grassroots marketing efforts led by our local design center teams further drive interest in our product offerings.
Our messaging is relevant and aspirational and is conveyed through a variety of media, including digital marketing that includes social media and email marketing campaigns, plus direct mail, TV and radio. Additionally, grassroots marketing efforts are led by our local design center teams to drive additional interest in our product offerings.
With so much of our product customizable, we encourage our customers to get personalized help from our interior design professionals either in person or through virtual chat. The recent implementation of a state-of-the-art fabric-to-frame configurator empowers designers to visualize nearly 1,000 fabrics and a wide range of construction options on upholstered frames.
With so much of our product customizable, we encourage our clients to get personalized help from our interior design professionals either in person or through virtual chat. Our state-of-the-art fabric-to-frame configurator empowers designers to visualize over 1,000 fabrics and a wide range of construction options on upholstered frames.
This cutting-edge addition to our technology stack offers clients a real-time preview of what their custom upholstery will look like. All of these technologies have been pivotal to our ability to serve clients and provide even more ways for us to collaborate and create a timely and exceptional experience.
This cutting-edge addition to our technology stack offers clients a real-time preview of what their custom upholstery will look like. All of these technologies have been pivotal to our ability to serve clients and provide ways to collaborate and create an exceptional experience.
AND SUBSIDIARIES Additional Information Additional information with respect to the Company’s business is included within the following pages and is incorporated herein by reference: Page Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Quantitative and Qualitative Disclosures about Market Risk 35 Note 1 to Consolidated Financial Statements entitled Organization and Nature of Business 44 Note 20 to Consolidated Financial Statements entitled Segment Information 65
AND SUBSIDIARIES Additional Information Additional information with respect to the Company’s business is included within the following pages and is incorporated herein by reference: Page Management’s Discussion and Analysis of Financial Condition and Results of Operations 21 Quantitative and Qualitative Disclosures about Market Risk 33 Note 1 to Consolidated Financial Statements entitled Organization and Nature of Business 43 Note 20 to Consolidated Financial Statements entitled Segment Information 64
We have no significant long-term supply contracts and believe we have sufficient alternate sources of supply to prevent significant long-term disruption to our operations. Appropriate amounts of inventory are typically stocked to maintain adequate production levels. We believe that our sources of supply for these materials are sufficient and that we are not dependent on any one supplier.
We have no significant long-term supply contracts, do not depend on any one supplier and believe we have sufficient alternate sources of supply to prevent significant long-term disruption to our operations. Appropriate amounts of inventory are typically stocked to maintain adequate production levels.
We also have registered, or have applications pending, for certain of our slogans utilized in connection with promoting brand awareness, retail sales and other services and certain collection names. In addition, we have registered and maintain the internet domain name of ethanallen.com.
We also have registered our slogans utilized in connection with promoting brand awareness, retail sales and certain collection names. In addition, we have registered and maintain the internet domain name of ethanallen.com.
These raw materials used for manufacturing are for cover (primarily fabrics and leather), polyester batting and polyurethane foam for cushioning and padding, lumber and plywood for frames, steel for motion mechanisms and various other metal components for fabrication of product. Our raw materials are purchased both domestically and outside the United States.
These raw materials are for cover (primarily fabrics and leather), polyester batting and polyurethane foam for cushioning and padding, lumber and plywood for frames, steel for motion mechanisms and various other metal components for fabrication of products. Our raw materials are purchased both domestically and outside the U.S.
During fiscal 2024, and for the fifth year in a row, the Mexican Center for Corporate Philanthropy and the Alliance for Corporate Social Responsibility recognized Ethan Allen’s upholstery manufacturing operations in Silao, as “Environmentally and Socially Responsible” for our ongoing commitment to socially responsible management. 8 ETHAN ALLEN INTERIORS INC.
During fiscal 2025, and for the sixth year in a row, the Mexican Center for Corporate Philanthropy and the Alliance for Corporate Social Responsibility recognized Ethan Allen’s upholstery manufacturing operations in Silao, as “Environmentally and Socially Responsible” for our ongoing commitment to socially responsible management.
Financial information, including sales, operating income and long-lived assets related to our segments are disclosed in Note 20, Segment Information, of the notes to our consolidated financial statements included under Item 8 of this Annual Report on Form 10-K.
Financial information related to our segments are disclosed in Note 20, Segment Information, of the notes to our consolidated financial statements included under Item 8 of this Annual Report on Form 10-K.
Ethan Allen design centers represent a mix of locations operated by independent licensees and Company-operated locations. At June 30, 2024, the Company operates 142 retail design centers with 138 located in the United States and four in Canada. Our 45 independently operated design centers are located in the United States, Asia, the Middle East and Europe.
Ethan Allen design centers represent a mix of locations operated by independent licensees and Company-operated locations. At June 30, 2025, the Company operates 142 retail design centers with 137 located in the U.S. and five in Canada. Our 45 independently operated design centers are located in the U.S., Asia, the Middle East and Europe.
AND SUBSIDIARIES Compensation and Other Benefits Our compensation programs are designed to attract, retain and motivate team members to achieve strong results. We benchmark our compensation practices and benefits programs against those of comparable industries and in the geographic areas where our facilities are located.
Compensation and Benefits Our compensation programs are designed to attract, retain and motivate team members to achieve strong results. We benchmark our compensation and benefits programs against those of comparable industries and in the geographic areas where our facilities are located. We believe that our compensation and benefits are competitive and allow us to attract and retain skilled labor.
The terms of these arrangements are customary for the industry and do not contain any long-term contractual obligations on our behalf. We believe we maintain good relationships with our suppliers. Segments We have strategically aligned our business into two reportable segments: wholesale and retail.
The terms of these arrangements are customary for the industry and do not contain any long-term contractual obligations on our behalf. We believe we maintain good relationships with our suppliers.
We typically shut down our domestic plants for one week at the beginning of each fiscal year to perform routine maintenance. Historically no one particular fiscal quarter contributes more than 28% of annual net sales volume, thus limiting our exposure to seasonality.
We typically shut down our manufacturing plants for one week at the beginning of each fiscal year to perform routine maintenance. Historically no one particular fiscal quarter contributes more than 28% of annual net sales volume, thus limiting our exposure to seasonality. Segments We have strategically aligned our business into two reportable segments: wholesale and retail.
In addition, we have partnered with local communities in some of our North American manufacturing workshops to provide transportation to and from work and offer daily low-cost meals.
We have safety programs in place for our employees to receive the proper training and education. In addition, we have partnered with local communities in some of our North American manufacturing workshops to provide transportation to and from work and offer daily low-cost meals.
Our vertically integrated structure, whereby we manufacture approximately 75% of the furniture we sell, leaves Ethan Allen with reduced exposure to any one particular country on the remaining 25% of products that are imported. We enter into standard purchase agreements with foreign and domestic suppliers to source selected products.
Our ability to manufacture approximately 75% of the furniture we sell in our North American facilities leaves us with limited exposure to any one particular country on the remaining 25% of products that are imported. We enter into standard purchase agreements with foreign and domestic suppliers to source selected products.
Historically, the size of our backlog at a given time varies and may not be indicative of our future sales, and therefore, we do not rely entirely on backlogs to predict future sales. At June 30, 2024 our wholesale backlog was $53.5 million, down 27.7% from a year ago and nearing pre-pandemic levels.
Historically, the size of our backlog varies and may not be indicative of our future sales, and therefore, we do not rely entirely on backlogs to predict future sales. At June 30, 2025 our wholesale backlog was $48.9 million, down 8.7% from a year ago.
In-store presentations often take place at freestanding designer workstations that are equipped with large flat-panel touchscreen displays to share floorplans and 3D renderings. These workstations also provide space for designers to showcase samples.
Touchscreens located throughout the sales floor enable clients to browse at their own pace or with a designer’s guidance. In-store presentations often take place at freestanding designer workstations that are equipped with large flat-panel touchscreen displays to share floorplans and 3D renderings. These workstations also provide space for designers to showcase samples.
Our environmental initiatives include but are not limited to: ● Use of responsibly harvested Appalachian woods, including the establishment of a wood sourcing policy and the sourcing of reclaimed/recycled wood; we are proud that Ethan Allen reports more than 25% of its wood furniture sold is from materials sourced from reclaimed/recycled wood ● Use of finishes that are low in both volatile organic compounds and hazardous air pollutants ● Eliminate the use of heavy metals and hydrochlorofluorocarbons in all packaging; our mattresses and custom upholstery use foam made without harmful chemicals and substances ● Convert, where and when reasonably feasible, to becoming per- and polyfluoroalkyl substances (“PFAS”) free throughout all our products including area rugs, broadloom, draperies and fabrics ● Invest in machinery and technology to cut down the landfill waste we generate by packaging our furniture with custom-sized plastic wrap and cartons to reduce excess packaging waste ● Continually review and investigate ways to reduce our carbon footprint and greenhouse gas emissions The Company requires its sourcing facilities that manufacture Ethan Allen branded products to implement a labor compliance program and meet or exceed the standards established for preventing child labor, involuntary labor, coercion and harassment, discrimination, and restrictions to freedom of association.
During fiscal 2025 Ethan Allen was awarded the designation of “Most Improved” by The Sustainable Furnishings Council and the National Wildlife Federation for its wood sourcing policies and commitment to sustainable wood ● Use of finishes that are low in both volatile organic compounds and hazardous air pollutants ● Eliminating the use of heavy metals and hydrochlorofluorocarbons in all packaging; our mattresses and custom upholstery use foam made without harmful chemicals and substances ● Conversion, where and when reasonably feasible, to becoming per- and polyfluoroalkyl substances (“PFAS”) free throughout all our products including area rugs, broadloom, draperies and fabrics ● Investment in machinery and technology to cut down the landfill waste we generate by packaging our furniture with custom-sized plastic wrap and cartons to reduce excess packaging waste ● Continual review and investigation of ways to reduce our carbon footprint and greenhouse gas emissions The Company requires its sourcing facilities that manufacture Ethan Allen branded products to implement a labor compliance program and meet or exceed the standards established for preventing child labor, involuntary labor, coercion and harassment, discrimination, and restrictions to freedom of association.
We are a global luxury home fashion brand that is vertically integrated from product design through home delivery, which offers our customers stylish product offerings, artisanal quality, and personalized service.
ITEM 1. BUSINESS Overview Ethan Allen is a leading interior design company, manufacturer and retailer in the home furnishings marketplace. We are a global luxury home fashion brand that is vertically integrated from product design through home delivery, which offers our customers stylish product offerings, artisanal quality, and personalized service.
We evaluate the performance of our respective segments based upon net sales and operating income. Intersegment transactions result, primarily, from the wholesale sale of inventory to the retail segment, including the related profit margin.
These two segments represent strategic business areas of our enterprise that operate separately and provide their own distinctive services. We evaluate the performance of our respective segments based upon net sales and operating income. Intersegment transactions result from the wholesale sale of inventory to the retail segment, including the related profit margin.
Farooq Kathwari*, age 80 ● Chairman of the Board, President and Chief Executive Officer since 1988 Amy Franks, age 50 ● Executive Vice President, Retail Division since August 2024 ● Executive Vice President, Retail Network and Business Development from December 2021 to August 2024 ● Senior Vice President, Retail from March 2021 to December 2021 ● Previously held senior retail leadership position at Bassett Furniture Industries, Inc. from 2019 to 2021 ● Prior to joining Bassett in 2019, she was Vice President, Retail at Ethan Allen from 2013 to 2019 Matthew J.
McNulty, age 46 ● Senior Vice President, Chief Financial Officer and Treasurer since December 2021 ● Vice President, Finance and Treasurer from February 2020 to December 2021 ● Joined the Company in February 2019 as Vice President, Corporate Controller Amy Phillips, age 51 ● Executive Vice President, Retail Division since August 2024 ● Executive Vice President, Retail Network and Business Development from December 2021 to August 2024 ● Senior Vice President, Retail from March 2021 to December 2021 ● Previously held senior retail leadership position at Bassett Furniture Industries, Inc. from 2019 to 2021 ● Prior to joining Bassett in 2019, she was Vice President, Retail at Ethan Allen from 2013 to 2019 Catherine A.
Ethan Allen has a distinct vision of classic American style with a modern perspective, which we believe differentiates us from our competitors.
We strive to deliver value to our shareholders through the execution of our strategic initiatives focused on the concept of constant reinvention. Ethan Allen has a distinct vision of classic American style with a modern perspective, which we believe differentiates us from our competitors.
Competition The home furnishings industry is a highly fragmented and competitive business. There has been increased competition from both internet only retailers and those with a brick-and-mortar presence. We compete with numerous individual retail home furnishing stores as well as national and regional chains.
There has been increased competition from both digital retailers and those with a brick-and-mortar presence. We compete with numerous individual retail home furnishing stores as well as national and regional chains. We believe the home furnishings industry competes primarily on the basis of product styling and quality, personal service, prompt delivery, product availability and price.
Our practice has been to sell our products at the same delivered cost to all Company and independently operated design centers throughout the United States, regardless of their shipping point.
Our practice has been to sell our products at the same delivered cost to all Company and independently operated design centers throughout the U.S., regardless of their shipping point. 7 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Competition The home furnishings industry is a highly fragmented and competitive business.
Ethan Allen is dedicated to upholding the highest ethical standards in all aspects of our business operations. The Company’s Code of Conduct provides a clear and thorough ethics standard for all employees, officers, and directors with respect to interactions with clients, vendors, and other employees.
The Company’s Code of Conduct provides a clear and thorough ethics standard for all employees, officers, and directors with respect to interactions with clients, vendors and other employees. Ethan Allen provides multiple avenues through which to report inappropriate behavior, including a whistleblower hotline. Health and Safety Ethan Allen is committed to protecting the health and safety of our employees.
Recent improvements to our ethanallen.com website include enhanced search capabilities, expanded live chat services, online appointment booking capability, and product listing and display page enhancements. Most clients will use the internet for inspiration and as a start to their shopping process to view products and prices.
E-Commerce We consider our ethanallen.com website an extension of our retail design centers and not a separate segment of our business. Our website includes enhanced search capabilities, expanded live chat services, online appointment booking, and product listing and display pages. Most clients use our website for inspiration and as a start to their shopping journey to view products and prices.
In coordination with national healthcare systems for our manufacturing facilities outside of the United States, we provide on-site medical clinics staffed by a doctor and a team of experienced nurses, who also provide a pharmacy to prescribe over-the-counter medications. This commitment and focus enables us to run our business operations without sacrificing the safety of our employees and customers.
In coordination with national healthcare systems for our manufacturing facilities outside of the U.S., we provide on-site medical clinics. We believe this commitment enables us to run our business operations without sacrificing the safety of our employees. 8 ETHAN ALLEN INTERIORS INC.
With the 3D Room Planner, our designers generate both 2D floor plans and immersive 4K, realistic 3D walk-throughs of the interior designs they create. In addition, our website offers a virtual design center, which enables clients to access our home furnishings while either co-browsing live with a designer or browsing on their own, at their own pace.
In addition, our website offers a virtual design center, which enables clients to access our home furnishings while either co-browsing live with a designer or browsing on their own, at their own pace. 6 ETHAN ALLEN INTERIORS INC.
AND SUBSIDIARIES Intellectual Property We currently hold, or have registration applications pending for, trademarks, service marks and copyrights for the Ethan Allen name, logos and designs in a broad range of classes for both products and services in the United States and in many foreign countries.
We also believe that we differentiate ourselves further with the caliber of our interior design professionals, who combine personal service with technology. Intellectual Property We currently hold trademarks, service marks and copyrights for the Ethan Allen name, logos and designs in a broad range of classes for both products and services in the U.S. and in many foreign countries.
We believe that our compensation and employee benefits are competitive and allow us to attract and retain skilled labor. Certain of the benefits we offer include access to healthcare plans, financial and physical wellness programs, paid time off, parental leave and retirement benefits, including a 401(k) plan with Company matching contributions.
Benefits we offer include access to healthcare plans, financial and physical wellness programs, paid time off, parental leave and retirement benefits, including a 401(k) plan with Company-matching contributions. Talent Development and Career Mobility We invest in our employees through accessible resources and training programs that help our employees navigate and foster meaningful careers.
We believe our employees have an entrepreneurial spirit, a passion for style, a drive for excellence, and creativity that has fostered a culture that embraces integrity, diversity, innovation and inclusion of people from all backgrounds. We continue to maintain and enforce our policy prohibiting discrimination and harassment in our workplace.
Ethan Allen strives to promote individual initiative, excellence and hard work. We believe our employees have an entrepreneurial spirit, a passion for style, a drive for excellence, and creativity, which has fostered a culture that embraces integrity and innovation.
For the second year in a row Ethan Allen was named to Newsweek’s list of America’s Best Retailers, including the #1 retailer of Premium Furniture.
We operate our business with an entrepreneurial attitude, staying focused on long-term growth, and treating our employees, vendors, and clients with dignity and respect. For the third year in a row, Ethan Allen was named to Newsweek’s list of America’s Best Retailers, including America’s #1 Premium Furniture Retailer.
This information is presented as of August 23, 2024, the date of this Annual Report on Form 10-K. M.
This information is presented as of August 22, 2025, the date of this Annual Report on Form 10-K. M. Farooq Kathwari*, age 81 ● Chairman of the Board, President and Chief Executive Officer since 1988 Douglas H.
We operate our business with an entrepreneurial attitude, staying focused on long-term growth, and treating our employees, vendors, and clients with dignity and respect, which we believe are important amidst the constant changes taking place in the world.
We are required to receive GSA approval to apply list price increases during the term of the Multiple Award Schedule Contract period. Human Capital Management We operate our business with an entrepreneurial attitude, staying focused on long-term growth, and treating our employees, vendors, and clients with dignity and respect.
Our diversity initiatives include developing impactful practices to advance our Company’s diversity and inclusion policies, supporting diversity awareness across our organization, maintaining an inclusive environment free from discrimination or harassment of any kind, and continuing to offer our employees equal employment opportunities based solely on merit and qualifications.
We believe in creating and fostering a workplace in which all our employees feel valued and empowered to do their best work and contribute their ideas and perspectives. Our initiatives include maintaining an environment free from discrimination or harassment of any kind, and continuing to offer opportunities based solely on merit and qualifications.
The majority of our employees are employed on a full-time basis and none of our employees are represented by unions or collective bargaining agreements. In managing our business, we focus on a number of key human capital objectives, which are rooted in our core values and include the following.
At June 30, 2025, our employee count totaled 3,211, with 2,239 employees in our wholesale segment and 972 in our retail segment. The majority of our employees are employed on a full-time basis and none of our employees are represented by unions or collective bargaining agreements.
At June 30, 2024, we own and operate ten manufacturing facilities, including four manufacturing plants, one sawmill, one rough mill and one kiln dry lumberyard in the United States, two manufacturing plants in Mexico and one manufacturing plant in Honduras.
We own and operate eleven manufacturing facilities, including four manufacturing plants, one sawmill, one rough mill and one kiln dry lumberyard in the U.S., three manufacturing plants in Mexico and one manufacturing plant in Honduras. The Company also partners with suppliers located in Europe, Asia, and other countries to produce and import various products that support the business.
When clients enter, they see a gallery showroom with a certain number of room projections depending on the design center’s square footage. Touchscreens located throughout the sales floor enable clients to browse at their own pace or with a designer’s guidance.
Projection Our design centers are interior design destinations, with technology-driven projections and dedicated workstations that foster collaboration between designers and clients. When clients enter, they see a gallery showroom with a certain number of room projections depending on the design center’s square footage.
Product By harnessing the expertise of skilled artisans within our North American facilities, we manufacture 75% of the furniture we offer. Every product bears the distinctive quality of the Ethan Allen brand. Meticulously hand-guided stitching dress our upholstery frames and our case goods wood furniture is crafted from premium lumber and veneers, which are individually finished and customized.
Product We manufacture 75% of the furniture we offer by combining the craftsmanship of our skilled associates with technology in our North American facilities. Every product bears the distinctive quality of the Ethan Allen brand.
Our vertically integrated approach empowers us to seamlessly introduce new products, oversee design specifications, and uphold consistent levels of excellence across all product lines. Alongside our seven manufacturing facilities in the United States, we possess two upholstery manufacturing plants in Mexico and a case goods manufacturing facility in Honduras.
These elements are part of Ethan Allen's identity, solidifying our reputation for quality and style in home furnishings. 5 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Our vertically integrated approach empowers us to introduce new products, oversee design specifications, and uphold consistent levels of excellence across all product lines.
Our commitment to using leading construction techniques is evident, including using mortise and tenon joinery and four-corner glued dovetail joinery for drawers. These elements are part of Ethan Allen's identity, solidifying our reputation for quality and style in home furnishings.
Meticulously hand-guided stitching dress our upholstery frames and our case goods wood furniture is crafted from premium lumber and veneers, which are individually finished and customized. Our commitment to using leading construction techniques is evident, including using mortise and tenon joinery and four-corner glued dovetail joinery for drawers.
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ITEM 1. BUSINESS Overview Ethan Allen Interiors Inc., through its wholly-owned subsidiary, Ethan Allen Global, Inc., and Ethan Allen Global, Inc.’s subsidiaries (collectively, “we,” “us,” “our,” “Ethan Allen” or the “Company”), is a leading interior design company, manufacturer and retailer in the home furnishings marketplace.
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We regularly update display presentations and floor plans, strengthen the qualifications of our designers through training and certifications and combine technology with personal service in our design centers. Over the past 10 years, 38% of our design centers are new or have been relocated as we continually evaluate our retail footprint.
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We also partner with suppliers located in Europe, Asia, and other countries to produce and import various products that support our business. Business Strategy We strive to deliver value to our shareholders through the execution of our strategic initiatives focused on the concept of constant reinvention.
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In the past five years, we have either opened or relocated 17 design centers with an average size of 7,200 square feet. These smaller footprint design centers reflect our shift to lifestyle centers that better project our brand and offer increased traffic opportunities while reducing excess space.
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We believe our strategic investments in manufacturing facilities and the sourcing from foreign and domestic suppliers positions us to accommodate future growth while retaining control over costs, quality and customer service. 5 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Projection Our design centers are interior design destinations, with technology-driven projections and dedicated workstations that foster collaboration between designers and clients.
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During fiscal 2025, four new Company-operated design centers were opened that showcase Ethan Allen home furnishings while combining complimentary interior design services with technology. Business Strategy Our vertical integration is a competitive advantage for us. Our North American manufacturing and logistics operations are an integral part of an overall strategy to maximize production efficiencies and maintain this competitive advantage.
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During fiscal 2024, new state-of-the-art design centers were opened in The Villages, FL, Avon, OH, New York, NY, Albuquerque, NM and Louisville, KY that showcase the Company’s unique vision of American style while combining complimentary interior design services with technology. We plan to further expand our retail design center footprint in fiscal 2025 through the addition of new design centers.
Added
Alongside our seven manufacturing facilities in the U.S., we possess three upholstery manufacturing plants in Mexico and a case goods manufacturing facility in Honduras. We selectively outsource the remaining 25% of our products, primarily from Asia. Our sourcing partners must adhere to our quality standards, specifications and social responsibility.
Removed
By adopting a fresh, ever-evolving creative approach, using digital marketing to drive traffic to our retail locations, we continue to broaden our reach and enhance desirability and visibility. Our combination of creative and analytics-driven strategies enables us to secure both new and repeat client traffic to our design centers and to our website at ethanallen.com.
Added
During fiscal 2025, new design centers were opened in Middleton, WI, Toronto, Canada, Peoria, AZ and Watchung, NJ that showcase our ability to combine complimentary interior design services with technology.
Removed
Taken together, these strategies help ensure that we are continuing to add to our client base while maintaining existing relationships. E-Commerce We consider our website an extension of our retail design centers and not a separate segment of our business.
Added
With the 3D Room Planner, our designers generate both 2D floor plans and immersive 4K, realistic 3D walk-throughs of the interior designs they create.
Removed
With so much of our product customizable, we encourage our website customers to get personalized help from our interior design professionals either in person or by chatting online. We believe this complimentary direct contact creates a competitive advantage through our excellent personal service. 6 ETHAN ALLEN INTERIORS INC.
Added
By using a variety of mediums, we look to attract and meet the needs of our clients as well as drive traffic to our retail locations, broaden our reach and enhance desirability.
Removed
Our operating segments are aligned with how the Company, including our chief executive officer (defined as our chief operating decision maker), manages the business. These two segments represent strategic business areas of our vertically integrated enterprise that operate separately and provide their own distinctive services. This vertical structure enables us to offer home furnishings while better controlling quality and cost.
Added
Client Base We sell home furnishings and accents to clients through our 142 Company-operated design centers that make up our retail segment and 45 independently operated design centers located in the U.S., Asia, the Middle East and Europe, which are included within our wholesale segment.
Removed
Our sales volume and production schedules were impacted by the pandemic and thus did not follow the aforementioned historical trends. As a result of heightened post-pandemic demand during fiscal years 2021 and 2022, significant backlog was built.
Added
Our wholesale segment net sales include sales to our retail segment, which are eliminated in consolidation, and sales to our independent retailers and other third parties. No single client represented more than 10% of our consolidated net sales during fiscal 2025.
Removed
During fiscal 2023, our wholesale and retail business sales volumes began trending to more historical levels and at June 30, 2024, backlogs were near pre-pandemic levels. Backlog We define backlog as any written order received that has not yet been delivered.
Added
Our ten largest clients were all within our wholesale segment and accounted for 11% of consolidated net sales during fiscal 2025 compared with 13% of consolidated net sales during fiscal 2024.
Removed
This policy creates pricing credibility with our wholesale customers while providing our retail segment the opportunity to achieve more consistent margins by removing fluctuations attributable to the cost of shipping. 7 ETHAN ALLEN INTERIORS INC.
Added
These clients were nine independent retailers and the U.S. government General Services Administration (“GSA”), which individually represented 6% of our consolidated net sales in fiscal 2025 compared with 7% a year ago. Backlog We define backlog as any written order received that has not yet been delivered.
Removed
AND SUBSIDIARIES Human Capital Management We operate our business with an entrepreneurial attitude, staying focused on long-term growth, and treating our employees, vendors, and clients with dignity and respect. At June 30, 2024, our employee count totaled 3,404, with 2,376 employees in our wholesale segment and 1,028 in our retail segment.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

49 edited+15 added−21 removed49 unchanged
Biggest changeWe are self-insured for our health benefits and maintain per employee stop loss coverage; however, we retain the insurable risk at an aggregate level. Therefore, unforeseen or significant losses in excess of our insured limits could have a material adverse effect on the Company’s financial condition and operating results.
Biggest changeIf actual results differ from Company estimates, additional charges for asset impairments may be required in the future. If impairment charges are significant, our financial results could be negatively affected. We are subject to self-insurance risks. We are self-insured for our health benefits and maintain per employee stop loss coverage; however, we retain the insurable risk at an aggregate level.
We may not be able to maintain our current design center locations at current costs. We may also fail to successfully select and secure design center locations. Our design centers are typically located in busy urban settings as freestanding destinations or as part of suburban shopping malls, depending upon the real estate opportunities in a particular market.
We may not be able to maintain our current design center locations at current costs. We may also fail to successfully select and secure design center locations. Our design centers are typically located in urban settings as freestanding destinations or as part of suburban shopping malls, depending upon the real estate opportunities in a particular market.
In addition, because many foreign manufacturers are able to maintain lower production costs, including the cost of labor and overhead, imported product may be capable of being sold at a lower price to consumers, which, in turn, could lead to some measure of further industry‐wide price deflation.
In addition, because many foreign manufacturers are typically able to maintain lower production costs, including the cost of labor and overhead, imported product may be capable of being sold at a lower price to consumers, which, in turn, could lead to some measure of further industry‐wide price deflation.
AND SUBSIDIARIES The market for qualified employees and personnel in the retail and manufacturing industries is highly competitive. Our success depends upon our ability to attract, retain and motivate qualified artisans, professional and clerical employees and upon the continued contributions of these individuals. We cannot provide assurance that we will be successful in attracting and retaining qualified personnel.
The market for qualified employees and personnel in the retail and manufacturing industries is highly competitive. Our success depends upon our ability to attract, retain and motivate qualified artisans, professional and clerical employees and upon the continued contributions of these individuals. We cannot provide assurance that we will be successful in attracting and retaining qualified personnel.
AND SUBSIDIARIES Product recalls or product safety concerns could materially adversely affect our sales and operating results. If the Company's merchandise offerings do not meet applicable safety standards or consumers' expectations regarding safety, the Company could experience decreased sales, increased costs and/or be exposed to legal and reputational risk.
Product recalls or product safety concerns could materially adversely affect our sales and operating results. If the Company's merchandise offerings do not meet applicable safety standards or consumers' expectations regarding safety, the Company could experience decreased sales, increased costs and/or be exposed to legal and reputational risk.
Home Furnishings Industry Risks Declines in certain economic conditions, which impact consumer confidence and consumer spending, could negatively impact our sales, results of operations and liquidity. Historically, the home furnishings industry has been subject to cyclical variations in the general economy and to uncertainty regarding future economic prospects.
Home Furnishings Industry Risks Declines in certain economic conditions, which impact consumer confidence and consumer spending, could negatively impact our sales, results of operations and liquidity. Historically, the home furnishings industry has been subject to cyclical variations in the economy and to uncertainty regarding future economic prospects.
Should we have to close or abandon one of these leased locations, we could incur additional impairment charges if rental market conditions do not support a fair value for the right of use asset in excess of carrying value.
Should we have to close or abandon one or more of these leased locations, we could incur additional impairment charges if rental market conditions do not support a fair value for the right of use asset in excess of carrying value.
AND SUBSIDIARIES Fluctuations in the price, availability and quality of raw materials and imported finished goods could result in increased costs and cause production delays which could result in a decline in sales, either of which could materially adversely impact our earnings.
Fluctuations in the price, availability and quality of raw materials and imported finished goods could result in increased costs and cause production delays which could result in a decline in sales, either of which could materially adversely impact our earnings.
Moreover, the costs to eliminate or alleviate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful, resulting potentially in the theft, loss, destruction or corruption of information we store electronically, as well as unexpected interruptions, delays or cessation of service, any of which could cause harm to our business operations. 15 ETHAN ALLEN INTERIORS INC.
Moreover, the costs to eliminate or alleviate network security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful, resulting potentially in the theft, loss, destruction or corruption of information we store electronically, as well as unexpected interruptions, delays or cessation of service, any of which could cause harm to our business operations. 14 ETHAN ALLEN INTERIORS INC.
We currently compete with many other manufacturers and retailers, including online retailers, some of which offer widely advertised products, and others, several of which are large retail dealers offering their own store-branded products. Competition in the residential home furnishings industry is based on quality, style of products, perceived value, price, service to the customer, promotional activities, and advertising.
We currently compete with many other manufacturers and retailers, including digital retailers, some of which offer widely advertised products, and others, several of which are large retail dealers offering their own store-branded products. Competition in the residential home furnishings industry is based on quality, style of products, perceived value, price, service to the customer, promotional activities, and advertising.
Disruption of the Company’s supply chain capabilities due to trade restrictions, political instability, severe weather, natural disasters, public health crises, terrorism, product recalls, global unrest, war, labor supply or stoppages, the financial and/or operational instability of key suppliers and carriers, or other reasons could impair the Company’s ability to distribute its products.
Disruption of the Company’s supply chain capabilities due to trade restrictions, political instability, increased tariffs, severe weather, natural disasters, public health crises, terrorism, product recalls, global unrest, war, labor supply or stoppages, the financial and/or operational instability of key suppliers and carriers, or other reasons could impair the Company’s ability to distribute its products.
Though losses arising from some of these issues may be covered by insurance, interruptions of our critical business information technology systems or failure of our back-up systems could result in longer production times or negatively impact customers resulting in damage to our reputation and a reduction in sales.
Though losses arising from some of these issues may be covered by insurance, interruptions to our critical business information technology systems or failure of our back-up systems could result in longer production times or negatively impact clients resulting in damage to our reputation and a reduction in sales.
Our principal products are consumer goods that may be considered discretionary purchases. Economic downturns and prolonged negative conditions in the economy have in the past and could in the future affect consumer spending habits by decreasing the overall demand for discretionary items, including home furnishings.
Our principal products are consumer goods that may be considered discretionary purchases. Economic downturns and prolonged negative conditions in the economy have in the past and could in the future effect consumer spending habits by decreasing the overall demand for discretionary items, including home furnishings.
A prolonged shortage or inability to retain qualified labor could decrease our ability to effectively produce and meet customer demand and efficiently operate our facilities, which could negatively impact our business and have a material adverse effect on our results of operations.
A prolonged shortage or inability to retain qualified labor could decrease our ability to effectively produce and meet client demand and efficiently operate our facilities, which could negatively impact our business and have a material adverse effect on our results of operations.
A majority of our business relies on physical design centers that merchandise and sell our products and a significant shift in consumer preference towards exclusively purchasing products online could have a materially adverse impact on our sales and operating margin.
A majority of our business relies on physical brick and mortar design centers that merchandise and sell our products and a significant shift in consumer preference towards exclusively purchasing products online could have a materially adverse impact on our sales and operating margin.
In addition, we may become subject to potentially material liabilities for the investigation and cleanup of contaminated properties and to claims alleging personal injury or property damage resulting from exposure to or releases of hazardous substances or personal injury because of an unsafe workplace.
We may also become subject to potentially material liabilities for the investigation and cleanup of contaminated properties and to claims alleging personal injury or property damage resulting from exposure to or releases of hazardous substances or personal injury because of an unsafe workplace.
In addition, noncompliance with, or stricter enforcement of, existing laws and regulations, adoption of more stringent new laws and regulations, discovery of previously unknown contamination or imposition of new or increased requirements could require us to incur costs or become the basis of new or increased liabilities that could be material. 13 ETHAN ALLEN INTERIORS INC.
In addition, noncompliance with, or stricter enforcement of, existing laws and regulations, adoption of more stringent new laws and regulations, discovery of previously unknown contamination or imposition of new or increased requirements could require us to incur costs or become the basis of new or increased liabilities that could be material.
Any disruption in the services of our key personnel could make it more difficult to successfully operate our business and achieve our business goals and could adversely affect our results of operation and financial condition. These changes could also increase the volatility of our stock price. 16 ETHAN ALLEN INTERIORS INC.
Any disruption in the services of our key personnel could make it more difficult to successfully operate our business and achieve our business goals and could adversely affect our results of operation and financial condition. These changes could also increase the volatility of our stock price.
Changes in the United States trade and tax policy could materially adversely affect our business and results of operations. Changes in the political environment in the United States may require us to modify our current business practices.
Changes in the U.S. trade and tax policy could materially adversely affect our business and results of operations. Changes in the political environment in the U.S. may require us to modify our current business practices.
We are also exposed to risk related to conditions in the commercial real estate rental market with respect to the right-of-use assets we carry on our balance sheet for leased design centers and retail service centers. At June 30, 2024, the unamortized balance of such right-of-use assets totaled $114.2 million.
We are also exposed to risk related to conditions in the commercial real estate rental market with respect to the right-of-use assets we carry on our balance sheet for leased design centers and retail home delivery centers. At June 30, 2025, the unamortized balance of such right-of-use assets totaled $109.2 million.
Higher wages to attract new and retain existing employees, as well as higher costs to purchase services from third parties, could negatively impact our results of operations. Financial Risks Our total assets include substantial amounts of long-lived assets.
Higher wages to attract new and retain existing employees, as well as higher costs to purchase services from third parties, could negatively impact our results of operations. 16 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Financial Risks Our total assets include substantial amounts of long-lived assets.
As a result, our ability to obtain adequate supplies or to control our costs may be adversely affected by events affecting international commerce and businesses located outside the United States, including natural disasters, public health crises, changes in international trade including tariffs, central bank actions, changes in the relationship of the U.S. dollar versus other currencies, labor availability and cost, and other domestic governmental policies and the countries from which we import our merchandise or in which we operate facilities.
As a result, our ability to obtain adequate supplies or to control our costs may be adversely affected by events affecting global commerce, including natural disasters, public health crises, changes in international trade including tariffs, central bank actions, changes in the U.S. dollar versus other currencies, labor availability and cost, and other governmental policies of countries from which we operate our manufacturing facilities in as well as import from.
The global and diverse nature of our business means that there could be additional examinations by governmental tax authorities and the resolution of ongoing and other probable audits, which could impose a future risk to the results of our business.
In the ordinary course of business, we are subject to tax examinations by various governmental tax authorities. The global and diverse nature of our business means that there could be additional examinations by governmental tax authorities and the resolution of ongoing and other probable audits, which could impose a future risk to the results of our business.
These risks resulting from global and local economic uncertainty could also severely disrupt our manufacturing operations, which could have a material adverse effect on our financial performance. We import approximately 25% of our merchandise from outside of the United States as well as operate manufacturing plants in Mexico and Honduras and retail design centers in Canada.
These risks resulting from economic uncertainty could also severely disrupt our manufacturing operations, which could have a material adverse effect on our financial performance. We import approximately 25% of our finished goods as well as operate manufacturing plants in Mexico and Honduras and retail design centers in Canada.
Our primary and back-up information technology systems are subject to damage or interruption from power outages, computer and telecommunications failures, viruses, phishing attempts, cyberattacks, malware and ransomware attacks, security breaches, severe weather, natural disasters, and errors by employees or third-party contractors.
Disruptions in both our primary and back-up systems could adversely affect our business and operating results. Our primary and back-up information technology systems are subject to damage or interruption from power outages, computer and telecommunications failures, viruses, phishing attempts, spoofing, cyberattacks, malware and ransomware attacks, security breaches, severe weather, natural disasters, and errors by employees or third-party contractors.
In our current operating environment, due in part to macroeconomic factors, we continue to experience various labor challenges, including, for example significant competition for skilled manufacturing and production employees; pressure to increase wages as a result of inflationary pressures, and at times, a shortage of qualified full-time labor. Outside suppliers that we rely on have also experienced similar labor challenges.
In our current operating environment, due in part to macroeconomic factors, we continue to experience various labor challenges, including competition for skilled manufacturing and production employees, pressure to increase wages as a result of inflationary pressures, and at times, a shortage of qualified full-time labor.
To the extent we are unable to mitigate the likelihood or potential impact of such events, there could be a material adverse effect on our operating and financial results. For example, the COVID-19 pandemic, resulted in supply chain challenges for the entire home furnishings industry, including the Company.
To the extent we are unable to mitigate the likelihood or potential impact of such events, there could be a material adverse effect on our operating and financial results. For example, the COVID-19 pandemic resulted in supply chain challenges for the entire home furnishings industry, including transportation delays, increases on shipping containers, extensive travel restrictions and temporary closing of businesses.
The tariffs, along with any additional tariffs or retaliatory trade restrictions implemented by other countries, could negatively impact customer sales, including potential delays in product received from our vendors, our cost of goods sold and results of operations. Our business may be materially adversely affected by changes to tax policies.
The tariffs, along with any additional tariffs or retaliatory trade restrictions implemented by other countries, could negatively impact customer sales, including potential delays in product received from our vendors, our cost of goods sold and results of operations.
Factors influencing consumer spending include general economic and financial market conditions, consumer disposable income, fuel prices, recession and fears of recession, United States government default or shutdown or the risk of such default or shutdown, unemployment, war and fears of war, availability of consumer credit, consumer debt levels, conditions in the housing market, increased interest rates, sales tax rates and rate increases, inflation, civil disturbances and terrorist activities, consumer confidence in future economic and political conditions, natural disasters and inclement weather and consumer perceptions of personal well‑being and security, including health epidemics or pandemics.
Factors influencing consumer spending include general economic and financial market conditions, consumer disposable income, fuel prices, recession and fears of recession, U.S. government default or shutdown, high unemployment, war, availability of consumer credit, consumer debt levels, the housing market, increased interest rates, sales tax rates, changes in global trade policies including tariffs, inflation, civil disturbances and terrorist activities, consumer confidence, natural disasters and consumer perceptions of personal well‑being and security, including health epidemics or pandemics.
At June 30, 2024, there were 142 Company-operated retail design centers averaging approximately 13,800 square feet in size per location. Of these 142 properties, we own 49 and lease 93.
At June 30, 2025, there were 142 Company-operated retail design centers averaging approximately 14,000 square feet in size per location. Of these 142 properties, we own 48 and lease 94.
Imported finished goods represent approximately 25% of our consolidated sales. The prices paid for these imported products include inbound freight. Elevated ocean freight container rates may be impacted by container supply and elevated demand. To the extent that we experience incremental costs in any of these areas, we may increase our selling prices to offset the impact.
Imported finished goods represent approximately 25% of our consolidated sales. The prices paid for these imported products include inbound freight. To the extent that we experience incremental inbound freight costs, we may increase our selling prices to offset the impact.
Industry globalization has led to increased competitive pressures brought about by the increasing volume of imported finished goods and components, particularly for case good products, and the development of manufacturing capabilities in other countries, specifically within Asia.
This competition could materially adversely affect our future financial performance. Industry globalization has led to increased competitive pressures brought about by the increasing volume of imported finished goods and components, and the development of manufacturing capabilities in other countries, specifically within Asia.
Legal and Regulatory Risks Global and local economic uncertainty may materially adversely affect our manufacturing operations or sources of merchandise and international operations. Economic uncertainty, as well as other variations in global economic conditions such as fuel costs, wage and benefit inflation, and currency fluctuations, may cause inconsistent and unpredictable consumer spending habits, while increasing our own input costs.
Economic uncertainty, as well as other variations in global economic conditions such as fuel costs, wage inflation, global trade policies including tariffs, and currency fluctuations, may cause inconsistent and unpredictable consumer spending habits, while increasing our own input costs.
We are subject to risks relating to increased tariffs on United States imports, and other changes affecting imports, as we manufacture components and finished goods in Mexico and Honduras and purchase components and finished goods manufactured in foreign countries.
In some cases, these tariffs have since been followed by announcements of limited exemptions and temporary pauses. We are subject to risks relating to increased tariffs on U.S. imports, and other changes affecting imports, as we manufacture components and finished goods in Mexico and Honduras and purchase components and finished goods manufactured in foreign countries.
Uninsured losses and liabilities from operating risks could reduce the funds available to us for capital and investment spending and could have a material adverse impact on the results of operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Uninsured losses and liabilities from operating risks could reduce the funds available to us for capital and investment spending and could have a material adverse impact on the results of operations. Access to consumer credit could be interrupted as a result of conditions outside of our control, which could reduce sales and profitability.
Our retail network sells home furnishings to consumers through a network of independently operated and Company-operated design centers, and competes against a diverse group of retailers ranging from specialty stores to traditional home furnishings and department stores, any of which may operate locally, regionally, nationally or globally, as well as over the internet.
Our retail network competes with a diverse group of retailers ranging from specialty stores to traditional home furnishings and department stores, any of which may operate locally, regionally, nationally or globally, as well as online. We also compete with these and other retailers for retail locations as well as for design professionals and management personnel.
In addition, the tightening of credit markets as well as increased borrowing rates has in the past and may in the future restrict the ability and willingness of customers to make purchases. We are subject to self-insurance risks.
In addition, the tightening of credit markets as well as increased borrowing rates may restrict the ability and willingness of clients to make purchases. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
If any of our manufacturing sites experience significant business interruption, our ability to manufacture or deliver our products in a timely manner would likely be impacted.
Our case goods operations are supported by two manufacturing plants located in in Vermont and Honduras, as well as one sawmill, one rough mill and one kiln dry lumberyard. If any of our manufacturing sites experience significant business interruption, our ability to manufacture or deliver our products in a timely manner would likely be impacted.
We rely on patent, trademark, copyright and trade secret laws, and confidentiality and restricted use agreements, to protect our intellectual property and may seek licenses to intellectual property of others. Some of our intellectual property is not covered by any patent, trademark, or copyright or any applications for the same.
Some of our intellectual property is not covered by any patent, trademark, or copyright or any applications for the same.
Changes in United States or international income tax laws and regulations may have a material adverse effect on our business in the future or require us to modify our current business practices. In the ordinary course of business, we are subject to tax examinations by various governmental tax authorities.
Changes in U.S. or international tax laws and regulations, such as those caused by the recent enactment of the federal One Big Beautiful Bill Act, may have a material adverse effect on our business in the future or require us to modify our current business practices.
AND SUBSIDIARIES Technology and Data Security Risks We rely extensively on information technology systems to process transactions, summarize results, and manage our business and that of certain independent retailers. Disruptions in both our primary and back-up systems could adversely affect our business and operating results.
Reputational damage caused by real or perceived product safety concerns or product recalls could negatively affect the Company's business and results of operations. 13 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Technology and Data Security Risks We rely extensively on information technology systems to process transactions, summarize results, and manage our business and that of certain independent retailers.
Farooq Kathwari, whose employment agreement was amended on July 30, 2024, extending his term for an additional two years, ending June 30, 2027. We face risks related to loss of any key personnel and we also face risks related to any changes that may occur in key senior leadership executive positions.
We face risks related to loss of any key personnel and we also face risks related to any changes that may occur in key senior leadership executive positions.
General Risk Factors Failure to protect our intellectual property could materially adversely affect us. We believe that our copyrights, trademarks, service marks, trade secrets, and all of our other intellectual property are important to our success.
We believe that our copyrights, trademarks, service marks, trade secrets, and all of our other intellectual property are important to our success. We rely on patent, trademark, copyright and trade secret laws, and confidentiality and restricted use agreements, to protect our intellectual property and may seek licenses to intellectual property of others.
Human Capital Risk Our business is dependent on certain key personnel; if we lose key personnel or are unable to hire additional qualified personnel, our business may be harmed. The success of our business depends upon our ability to retain continued service of certain key personnel, including our Chairman of the Board, President and Chief Executive Officer, M.
If we have to litigate to protect or defend any of our rights, such litigation could result in significant expense. Human Capital Risk Our business is dependent on certain key personnel; if we lose key personnel or are unable to hire additional qualified personnel, our business may be harmed.
The extent of these costs and risks is difficult to predict and will depend in large part on the extent of new regulations and the ways in which those regulations are enforced. We operate manufacturing facilities in multiple regions across the globe, and the impact of additional regulations in this area is likely to vary by region.
Further, enhanced regulation in other environmental, health and safety matters could result in increased compliance costs and subject us to additional potential liabilities. The extent of these costs and risks is difficult to predict and will depend in large part on the extent of new regulations and the ways in which those regulations are enforced.
Supply Chain Risks Disruptions of our supply chain and supply chain management could have a material adverse effect on our operating and financial results.
Fewer locations could result in longer distances for delivery and could result in higher costs to transport products if fuel costs significantly increase. 12 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Disruptions of our supply chain and supply chain management could have a material adverse effect on our operating and financial results.
If we have to litigate to protect or defend any of our rights, such litigation could result in significant expense. 17 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Our operations present hazards and risks which may not be fully covered by insurance, if insured.
Therefore, unforeseen or significant losses in excess of our insured limits could have a material adverse effect on the Company’s financial condition and operating results. Our operations present hazards and risks which may not be fully covered by insurance, if insured.
Fewer locations have also resulted in longer distances for delivery and could result in higher costs to transport products if fuel costs significantly increase. Environmental, Health and Safety Risks Our current and former manufacturing and retail operations and products are subject to environmental, health and safety requirements. We use and generate hazardous substances in our manufacturing operations.
However, increases in selling prices may not fully mitigate the impact of the cost increases which would adversely impact operating income. Environmental, Health and Safety Risks Our current and former manufacturing and retail operations and products are subject to environmental, health and safety requirements. We use and generate hazardous substances in our manufacturing operations.
We have a limited number of manufacturing sites within our case goods and upholstery operations. Our upholstery operations consist of three upholstery plants in North Carolina and two plants in Mexico. Our case goods operations is supported by two manufacturing plants in Vermont and Honduras and one sawmill, one rough mill and one kiln dry lumberyard.
Manufacturing and Supply Chain Risks Our number of manufacturing sites may increase our exposure to business disruptions and could result in higher costs. We have a limited number of manufacturing locations. Our upholstery operations consist of three upholstery plants in North Carolina as well as three plants in Mexico.
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While the pandemic-era disruptions have subsided, if in the future there are transportation delays, increases on shipping containers, more extensive travel restrictions, closures or disruptions of businesses and facilities or social, economic, political or labor instability in the affected areas, as a result of pandemics or otherwise, it could impact either our or our suppliers’ operations and have a material adverse effect on our consolidated results of operations. 12 ETHAN ALLEN INTERIORS INC.
Added
Competition from manufacturers and retailers may materially adversely affect our business, operating results or financial condition. Our wholesale segment competes with other U.S. and foreign manufacturers.
Removed
However, increases in selling prices may not fully mitigate the impact of the cost increases which would adversely impact operating income. Furthermore, supply chain disruptions could materially adversely impact our manufacturing production and fulfillment of backlog. Manufacturing Risks Competition from overseas manufacturers and domestic retailers may materially adversely affect our business, operating results or financial condition.
Added
If a similar pandemic or event should occur, it could impact either our or our suppliers’ operations and have a material adverse effect on our consolidated results of operations. Furthermore, supply chain disruptions could materially adversely impact our manufacturing production and fulfillment of backlog.
Removed
Our wholesale business segment is involved in the development of our brand, which encompasses the design, manufacture, sourcing, sales and distribution of our home furnishings products, and competes with other United States and foreign manufacturers.
Added
Legal and Regulatory Risks Global and local economic uncertainty may materially adversely affect our manufacturing operations or sources of merchandise and international operations.
Removed
We also compete with these and other retailers for retail locations as well as for qualified design professionals and management personnel. Such competition could adversely affect our future financial performance.
Added
During fiscal 2025, the U.S. announced its intention and/or actively took actions to increase tariffs at various rates, including on certain products imported from many countries and individualized higher tariffs on certain other countries. Other countries have announced reciprocal tariffs or other similar actions.
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We cannot provide assurance that we will be able to establish or maintain relationships with sufficient or appropriate manufacturers, whether foreign or domestic, to supply us with selected case goods, upholstery and home accent items to enable us to maintain our competitive advantage. In addition, the emergence of foreign manufacturers has served to broaden the competitive landscape.
Added
The recent enactment of these tariffs, along with the unpredictability of the rates, poses a risk to our business operations and may materially increase our costs and reduce our margins. There continues to be significant uncertainty about the future relationship between the U.S. and other countries regarding such trade policies, treaties and tariffs.
Removed
Some of these competitors produce products not manufactured by us and may have greater financial resources available to them or lower costs of operating. This competition could materially adversely affect our future financial performance. Our number of manufacturing sites may increase our exposure to business disruptions and could result in higher costs.
Added
As such, we can make no assurances about the eventual impact on our consolidated operating results and business. However, based on information currently available to us, the recent introduction of additional tariffs by the U.S. and reciprocal tariffs by other countries is expected to result in incremental costs for our imported raw materials and finished goods.
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For example, in July 2023, our wood furniture manufacturing operations located in Orleans, Vermont sustained damage from flooding, which resulted in losses of $2.2 million, net of insurance recoveries and grant proceeds, and a temporary work stoppage for many Vermont associates and a disruption and delay of shipments.
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These higher costs are expected to impact certain of our margins and could lead to an increase in our retail selling prices, potentially reducing consumer demand and impacting our sales volume.
Removed
Reputational damage caused by real or perceived product safety concerns or product recalls could negatively affect the Company's business and results of operations. We may incur significant increased costs and become subject to additional potential liabilities under environmental and other laws and regulations aimed at combating climate change.
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We continue to work to determine our overall tariff cost exposure, the potential impact of retaliatory responses thereto, if any, and mitigation plans.
Removed
We believe it is likely that the increased focus by the United States and other governmental authorities on climate change and other environmental matters will lead to enhanced regulation in these areas, which could also result in increased compliance costs and subject us to additional potential liabilities.
Added
Our inability to minimize the impact of tariffs on our raw material input costs, pass through price increases or find alternative sources for our raw materials, may have a material adverse impact on our sales volume, earnings and liquidity. For more information, see Item 7A.
Removed
It is possible the costs we incur to comply with any such new regulations and implementation of our own sustainability goals could be material. Our practices and future disclosures related to Environmental, Social and Governance ( “ ESG ” ) matters may expose us to numerous risks, including risks to our reputation and stock price.
Added
Quantitative and Qualitative Disclosures About Market Risks , under the heading of “Duties and Tariffs Risks”, of this Annual Report on Form 10-K. 15 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Our business may be materially adversely affected by changes to tax policies.
Removed
There has been an increased focus on ESG practices within the general markets. Our efforts to accomplish and accurately report on ESG matters present numerous operational, reputational, financial, legal, and other risks, any of which could have a material negative impact, including on our reputation, stock price and results of operation.
Added
Initiatives aimed at reducing the level of spending within the U.S. government may result in lower future revenues from our contract with the U.S. government. Ethan Allen sells to the U.S. government both through GSA Multiple Award Schedule Contracts and through competitive bids.
Removed
We could also incur additional costs and require additional resources to implement various ESG initiatives and to monitor and track performance with respect to such initiatives. The standards for tracking and reporting on ESG matters are relatively new and continue to evolve.
Added
Total net sales to the U.S. government individually represented 6% of our consolidated net sales in fiscal 2025. The U.S. government has and may continue to implement initiatives focused on efficiencies, affordability and cost reductions, such as those pursued by the Department of Government Efficiency (“DOGE”).
Removed
In March 2024, the SEC finalized new rules that would require public companies to include extensive climate-related disclosures in their SEC filings, which the SEC voluntarily stayed in April 2024 pending completion of a judicial review that is currently pending in the U.S. Court of Appeals for the Eighth Circuit.
Added
On January 20, 2025, President Trump announced an executive order establishing the DOGE to maximize government efficiency and productivity. In February 2025, President Trump stated that he has directed DOGE to review U.S. government spending for potential waste and fraud.
Removed
While we continue to assess the materiality of climate-related topics to our operations, we could incur substantial additional compliance costs to the extent these or similar rules are implemented and we determine such topics are material. Collecting, measuring, and reporting ESG information and metrics can be difficult and time consuming.
Added
Pressures on and uncertainty surrounding the U.S. federal government’s budget and potential changes in budgetary priorities, could adversely affect our revenue, financial condition, and results of operations. These initiatives and changes may change the way U.S. government contracts are solicited, negotiated and managed. Failure to protect our intellectual property could materially adversely affect us.
Removed
Our current selected disclosure framework or standards may need to be changed from time to time, including as a result of new rules, which may result in a lack of consistent or meaningful comparative data from period to period.
Added
The success of our business depends upon our ability to retain continued service of certain key personnel, including our Chairman of the Board, President and Chief Executive Officer, M. Farooq Kathwari, whose employment agreement was amended on July 30, 2024, extending his term for an additional two years, ending June 30, 2027.
Removed
In addition, our interpretation of reporting frameworks, standards or rules may differ from those of others and such frameworks, standards or rules may change over time, any of which could result in significant revisions to our goals or reported progress in achieving such goals.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity risk management and strategy are led by our Vice President of Information Technology, and our Manager of Security. Such individuals have over 50 years of work experience, collectively, in various roles managing information security, developing cybersecurity strategy, and implementing effective information and cybersecurity programs.
Biggest changeOur cybersecurity risk management and strategy are led by our Vice President of Information Technology, and our Manager of Security. Such individuals have over 50 years of work experience, collectively, in various roles managing information security, developing cybersecurity strategy, and implementing effective information and cybersecurity programs, as well as relevant degrees and certifications. 18 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy We have policies, procedures and processes in place to identify, assess and monitor material risks from cybersecurity threats. These plans are part of our overall enterprise risk management strategy and are part of our operating procedures, internal controls, and information systems.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We have policies, procedures and processes in place to identify, assess and monitor material risks from cybersecurity threats. These plans are part of our overall enterprise risk management strategy and are part of our operating procedures, internal controls, and information systems.
Our key cybersecurity processes include the following: ● Risk-based controls for information systems and information on our networks: We seek to maintain an information technology infrastructure that implements physical, administrative and technical controls that are calibrated based on risk and designed to protect the confidentiality, integrity and availability of our information systems and information stored on our networks, including customer and employee information. ● Cybersecurity incident response plan and testing: We have a cybersecurity incident response plan and dedicated teams to respond to cybersecurity incidents.
AND SUBSIDIARIES Our key cybersecurity processes include the following: ● Risk-based controls for information systems and information on our networks: We seek to maintain an information technology infrastructure that implements physical, administrative and technical controls that are calibrated based on risk and designed to protect the confidentiality, integrity and availability of our information systems and information stored on our networks, including customer and employee information. ● Cybersecurity incident response plan and testing: We have a cybersecurity incident response plan and dedicated teams to respond to cybersecurity incidents.
Risk Factors under the heading of “Technology and Data Security Risks”, of this Annual Report on Form 10-K. Cybersecurity Governance The Company’s Board of Directors (the “Board”), as a whole, has oversight responsibility for our strategic and operational risks.
Risk Factors under the heading of “Technology and Data Security Risks”, of this Annual Report on Form 10-K. Governance The Company’s Board of Directors (the “Board”), as a whole, has oversight responsibility for our strategic and operational risks.
AND SUBSIDIARIES While the Company has experienced cybersecurity incidents, we are not aware of any cybersecurity incidents to date, including as a result of any previous cybersecurity incidents, that has materially affected or is reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
While the Company has experienced cybersecurity incidents, we are not aware of any cybersecurity incidents to date, including as a result of any previous cybersecurity incidents, that has materially affected or is reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
The framework is informed in part by the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, although this does not imply that we meet all technical standards, specifications or requirements under the NIST.
The framework is informed in part by the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework, although this does not imply that we meet all technical standards, specifications or requirements under the NIST. 17 ETHAN ALLEN INTERIORS INC.
We also regularly engage with consultants, auditors, and other third-parties to help identify areas for continued focus, improvement and compliance. 18 ETHAN ALLEN INTERIORS INC.
We also regularly engage with consultants, auditors, and other third-parties to help identify areas for continued focus, improvement and compliance.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAND SUBSIDIARIES Design center activity and geographic distribution of our retail network for fiscal years ended June 30, 2024 and 2023, respectively, are as follows: Fiscal 2024 Fiscal 2023 Independent Company- Independent Company- retailers operated Total retailers operated Total Retail Design Center activity: Balance at July 1 48 139 187 50 141 191 New locations - 5 5 2 2 4 Closures (3 ) (2 ) (5 ) (4 ) (4 ) (8 ) Balance at June 30 45 142 187 48 139 187 Relocations (in new and closures) - 2 2 1 2 3 Retail Design Center geographic locations: United States 30 138 168 33 135 168 Canada - 4 4 - 4 4 Middle East and Asia 14 - 14 14 - 14 Europe 1 - 1 1 - 1 Total 45 142 187 48 139 187 For additional information regarding leases for our properties, see Note 6, Leases , of the notes to our consolidated financial statements included under Item 8 of this Annual Report on Form 10-K.
Biggest changeThe following table sets forth the size of our properties, including both owned and leased locations (in thousands): Properties Owned or Leased Square Footage Corporate Headquarters 144 Case Goods Manufacturing facilities 1,306 Upholstery Manufacturing facilities 1,362 National Distribution centers 1,175 Retail 2,830 Total 6,817 Design center activity and geographic distribution of our retail network for fiscal years ended June 30, 2025 and 2024, respectively, are as follows: Fiscal 2025 Fiscal 2024 Independent Company- Independent Company- retailers operated Total retailers operated Total Retail Design Center activity: Balance at July 1 45 142 187 48 139 187 New locations 3 4 7 - 5 5 Closures (3 ) (4 ) (7 ) (3 ) (2 ) (5 ) Balance at June 30 45 142 187 45 142 187 Relocations (in new and closures) 2 2 5 - 2 2 Retail Design Center geographic locations: United States 30 137 167 30 138 168 Canada - 5 5 - 4 4 Middle East and Asia 14 - 14 14 - 14 Europe 1 - 1 1 - 1 Total 45 142 187 45 142 187 For additional information regarding leases for our properties, see Note 6, Leases , of the notes to our consolidated financial statements included under Item 8 of this Annual Report on Form 10-K.
We also own three and lease 14 retail home delivery centers located throughout North America that support our various retail design centers.
We also own four and lease 13 retail home delivery centers located throughout North America that support our various retail design centers.
There are 142 Company-operated retail design centers located in the United States and Canada, averaging approximately 13,800 square feet in size per location, of which 49 are owned and 93 are leased with a weighted average remaining lease term of 5.6 years.
There are 142 Company-operated retail design centers located in the U.S. and Canada, averaging approximately 14,000 square feet in size per location, of which 48 are owned and 94 leased with a weighted average remaining lease term of 5.6 years.
At June 30, 2024, we own and operate 10 manufacturing facilities located in the United States, Mexico and Honduras and three national distribution centers in the United States.
At June 30, 2025, we own and operate 11 manufacturing facilities located in the U.S., Mexico and Honduras and three national distribution centers in the U.S.
Removed
The following table sets forth the size of our properties, including both owned and leased locations: Properties Owned or Leased Square Footage (in thousands) Corporate Headquarters 144 Case Goods manufacturing facilities 1,305 Upholstery manufacturing facilities 1,308 Distribution centers 1,175 Retail 2,800 Total Property 6,732 19 ETHAN ALLEN INTERIORS INC.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(b) Recent Sales of Unregistered Securities There were no sales of unregistered equity securities during fiscal 2024. 21 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES (c) Purchases of Equity Securities by the Issuer We did not repurchase any shares of our outstanding common stock during the fourth quarter of fiscal 2024 under our existing Share Repurchase Program.
Biggest change(c) Purchases of Equity Securities by the Issuer We did not repurchase any shares of our outstanding common stock during the fourth quarter of fiscal 2025 under our existing Share Repurchase Program. At June 30, 2025, we had a remaining Board authorization to repurchase 2,007,364 shares of our common stock pursuant to the Share Repurchase Program.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Market Information, Holders of Record, Dividends, Securities Authorized for Issuance and Stock Performance Graph Market Information. Ethan Allen common stock is traded on the New York Stock Exchange (the “NYSE”) under ticker symbol “ETD”. Holders of Record.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a) Market Information, Holders of Record, Dividends, Securities Authorized for Issuance and Stock Performance Graph Market Information. Ethan Allen common stock is traded on the New York Stock Exchange (the “NYSE”) under the ticker symbol “ETD”. Holders of Record.
The annual changes for the five-year period shown in the graph below are based on the assumption that $100 had been invested in our common stock, the S&P 500® Index and the Dow Jones U.S. Furnishings Index on June 30, 2019.
The annual changes for the five-year period shown in the graph below are based on the assumption that $100 had been invested in our common stock, the S&P 500® Index and the Dow Jones U.S. Furnishings Index on June 30, 2020.
Our credit agreement also includes covenants that include limitations on our ability to pay dividends. Securities Authorized for Issuance under Equity Compensation Plans. Refer to Part III of this Annual Report on Form 10-K. Stock Performance Graph.
Our credit agreement also includes covenants with certain limitations on our ability to pay dividends. Securities Authorized for Issuance under Equity Compensation Plans. Refer to Part III of this Annual Report on Form 10-K. Stock Performance Graph.
As of August 16, 2024, there were 261 registered holders of record of our Ethan Allen common stock. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividends.
As of August 15, 2025, there were 263 registered holders of record of Ethan Allen common stock. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividends. In August 2024 we paid a special cash dividend of $0.40 per share.
Total cash dividends paid to shareholders in fiscal 2024 were $1.97 per share and totaled $50.3 million.
In addition to the special cash dividend, we paid four regular quarterly cash dividends during fiscal 2025. Total cash dividends paid to shareholders during fiscal 2025 were $1.96 per share and totaled $50.1 million.
The total cumulative dollar returns shown on the graph represent the value that such investments would have had on June 30, 2024.
The total cumulative dollar returns shown on the graph represent the value that such investments would have had on June 30, 2025. Stockholder returns over the indicated period are based on historical data and should not be considered indicative of future stockholder returns.
At June 30, 2024, we had a remaining Board authorization to repurchase 2,007,364 shares of our common stock pursuant to the Share Repurchase Program. In the future we may from time to time make repurchases in the open market and through privately negotiated transactions, subject to market conditions, including pursuant to our previously announced Share Repurchase Program.
In the future we may from time to time make repurchases in the open market and through privately negotiated transactions, subject to market conditions, including pursuant to our previously announced Share Repurchase Program. There is no expiration date on the repurchase authorization. 20 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES ITEM 6. RESERVED
Removed
In August 2023 we paid a special cash dividend of $0.50 per share. In April 2024, our Board of Directors increased the regular quarterly cash dividend by 8.3% to $0.39 per share. In addition to the special cash dividend of $0.50 per share, we paid four regular quarterly cash dividends during fiscal 2024.
Added
Company/Index/Market 2020 2021 2022 2023 2024 2025 Ethan Allen Interiors Inc. $ 100.00 $ 233.31 $ 170.84 $ 239.05 $ 235.76 $ 235.42 S&P 500 Index $ 100.00 $ 138.62 $ 122.10 $ 143.55 $ 176.13 $ 200.14 Dow Jones U.S.
Removed
Stockholder returns over the indicated period are based on historical data and should not be considered indicative of future stockholder returns. *This performance graph shall not be deemed “ soliciting material ” or to be “ filed ” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Ethan Allen under the Securities Act of 1933, as amended, or the Exchange Act whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
Added
Furnishings Index $ 100.00 $ 163.14 $ 116.61 $ 113.34 $ 104.65 $ 133.21 (b) Recent Sales of Unregistered Securities There were no sales of unregistered equity securities during fiscal 2025.
Removed
There is no expiration date on the repurchase authorization. ITEM 6. RESERVED

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeForward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that are expected. Ethan Allen Interiors Inc. and its subsidiaries (the “Company”) derive many of its forward-looking statements from operating budgets and forecasts, which are based upon many detailed assumptions.
Biggest changeForward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that are expected. Ethan Allen Interiors Inc. and its subsidiaries (collectively, “we,” “us,” “our,” “Ethan Allen” or the “Company”) derive many of its forward-looking statements from operating budgets and forecasts, which are based upon many detailed assumptions.
These forward-looking statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “continue,” “may,” “will,” “short-term,” “target,” “outlook,” “forecast,” “future,” “strategy,” “opportunity,” “would,” “guidance,” “non-recurring,” “one-time,” “unusual,” “should,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
These forward-looking statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “continue,” “confident,” “may,” “will,” “short-term,” “target,” “outlook,” “forecast,” “future,” “strategy,” “opportunity,” “would,” “guidance,” “non-recurring,” “one-time,” “unusual,” “should,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
Other Information 70 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 70 PART III Item 10. Directors, Executive Officers and Corporate Governance 71 Item 11. Executive Compensation 71 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 71 Item 13. Certain Relationships and Related Transactions, and Director Independence 72 Item 14.
Other Information 68 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 68 PART III Item 10. Directors, Executive Officers and Corporate Governance 69 Item 11. Executive Compensation 69 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 69 Item 13. Certain Relationships and Related Transactions, and Director Independence 70 Item 14.
Principal Accountant Fees and Services 72 PART IV Item 15. Exhibits and Financial Statement Schedules 73 Item 16. Form 10-K Summary 74 Signatures 75 3 ETHAN ALLEN INTERIORS INC.
Principal Accountant Fees and Services 70 PART IV Item 15. Exhibits and Financial Statement Schedules 71 Item 16. Form 10-K Summary 72 Signatures 73 3 ETHAN ALLEN INTERIORS INC.
Item 6. [Reserved] 22 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 35 Item 8. Financial Statements and Supplementary Data 36 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 70 Item 9A. Controls and Procedures 70 Item 9B.
Item 6. [Reserved] 21 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 21 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33 Item 8. Financial Statements and Supplementary Data 35 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 68 Item 9A. Controls and Procedures 68 Item 9B.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

92 edited+35 added−40 removed48 unchanged
Biggest changeFiscal Year Ended June 30, 2024 % of Sales % Chg 2023 % of Sales % Chg 2022 % of Sales % Chg Net sales $ 646.2 100.0 % (18.3 %) $ 791.4 100.0 % (3.2 %) $ 817.8 100.0 % 19.4 % Gross profit $ 393.1 60.8 % (18.2 %) $ 480.4 60.7 % (0.9 %) $ 484.7 59.3 % 23.3 % Operating income $ 78.0 12.1 % (43.2 %) $ 137.2 17.3 % (0.8 %) $ 138.3 16.9 % 78.9 % Adjusted operating income (1) $ 77.9 12.1 % (41.6 %) $ 133.5 16.9 % (0.5 %) $ 134.2 16.4 % 67.1 % Net income $ 63.8 9.9 % (39.7 %) $ 105.8 13.4 % 2.4 % $ 103.3 12.6 % 72.1 % Adjusted net income (1) $ 63.8 9.9 % (38.1 %) $ 103.1 13.0 % 2.8 % $ 100.3 12.3 % 67.0 % Diluted EPS $ 2.49 (39.7 %) $ 4.13 2.0 % $ 4.05 70.9 % Adjusted diluted EPS (1) $ 2.49 (38.2 %) $ 4.03 2.5 % $ 3.93 65.8 % Cash flow from operating activities $ 80.2 (20.3 %) $ 100.7 45.1 % $ 69.4 (46.6 %) Return on equity 13.4 % 23.5 % 26.4 % Wholesale written orders (10.9 %) (9.0 %) (0.5 %) Retail written orders (8.4 %) (12.3 %) (4.6 %) (1) Refer to the Regulation G Reconciliation of Non-GAAP Financial Measures section within this MD&A for the reconciliation of GAAP to adjusted key financial metrics.
Biggest changeFiscal Year Ended June 30, 2025 % of Sales % Chg 2024 % of Sales % Chg 2023 % of Sales % Chg Net sales $ 614.6 100.0 % (4.9% ) $ 646.2 100.0 % (18.3% ) $ 791.4 100.0 % (3.2% ) Gross profit $ 372.1 60.5 % (5.3% ) $ 393.1 60.8 % (18.2% ) $ 480.4 60.7 % (0.9% ) Operating income $ 62.0 10.1 % (20.5% ) $ 78.0 12.1 % (43.2% ) $ 137.2 17.3 % (0.8% ) Adjusted operating income (1) $ 62.9 10.2 % (19.3% ) $ 77.9 12.1 % (41.6% ) $ 133.5 16.9 % (0.5% ) Net income $ 51.6 8.4 % (19.1% ) $ 63.8 9.9 % (39.7% ) $ 105.8 13.4 % 2.4 % Adjusted net income (1) $ 52.3 8.5 % (18.0% ) $ 63.8 9.9 % (38.1% ) $ 103.1 13.0 % 2.8 % Diluted EPS $ 2.01 (19.3% ) $ 2.49 (39.7% ) $ 4.13 2.0 % Adjusted diluted EPS (1) $ 2.04 (18.1% ) $ 2.49 (38.2% ) $ 4.03 2.5 % Cash flow from operating activities $ 61.7 (23.1% ) $ 80.2 (20.3% ) $ 100.7 45.1 % Return on equity 10.8 % 13.4 % 23.5 % Wholesale written orders (3.2% ) (10.9% ) (9.0% ) Retail written orders (1.5% ) (8.4% ) (12.3% ) (1) Refer to the Regulation G Reconciliation of Non-GAAP Financial Measures section within this MD&A for the reconciliation of GAAP to adjusted key financial metrics.
Although we expect to continue to declare and pay quarterly cash dividends for the foreseeable future, the payment of future cash dividends is within the discretion of our Board of Directors and will depend on our earnings, operations, financial condition, capital requirements and general business outlook, among other factors.
Although we expect to continue to declare and pay quarterly cash dividends for the foreseeable future, the payment of future cash dividends is within the discretion of our Board and will depend on our earnings, operations, financial condition, capital requirements and general business outlook, among other factors.
AND SUBSIDIARIES Goodwill and Indefinite-Lived Intangible Assets We review the carrying value of our goodwill and intangible assets with indefinite lives at least annually, during the fourth quarter, or more frequently if an event occurs or circumstances change, for possible impairment.
Goodwill and Indefinite-Lived Intangible Assets We review the carrying value of our goodwill and intangible assets with indefinite lives at least annually, during the fourth quarter, or more frequently if an event occurs or circumstances change, for possible impairment.
Results of Operations For an understanding of the significant factors that influenced our financial performance in fiscal 2024 compared with fiscal 2023, the following discussion should be read in conjunction with the consolidated financial statements and related notes presented under Item 8 in this Annual Report on Form 10-K.
Results of Operations For an understanding of the significant factors that influenced our financial performance in fiscal 2025 compared with fiscal 2024, the following discussion should be read in conjunction with the consolidated financial statements and related notes presented under Item 8 in this Annual Report on Form 10-K.
We performed our annual indefinite-lived intangible asset impairment test during the fourth quarter of fiscal 2024 utilizing a qualitative analysis and concluded it was more likely than not the fair value of our trade name was greater than its carrying value and no impairment charge was required.
We performed our annual indefinite-lived intangible asset impairment test during the fourth quarter of fiscal 2025 utilizing a qualitative analysis and concluded it was more likely than not the fair value of our trade name was greater than its carrying value and no impairment charge was required.
The Company performed its annual goodwill impairment test during the fourth quarter of fiscal 2024 utilizing a qualitative analysis and concluded it was more likely than not the fair value of our wholesale reporting unit was greater than its respective carrying value and no impairment charge was required.
The Company performed its annual goodwill impairment test during the fourth quarter of fiscal 2025 utilizing a qualitative analysis and concluded it was more likely than not the fair value of our wholesale reporting unit was greater than its respective carrying value and no impairment charge was required.
As of June 30, 2024, we were not subject to the fixed-charge coverage ratio requirement, had no borrowings outstanding under the Facility, were in compliance with all other covenants, and had borrowing availability of $121.0 million of the $125.0 million credit commitment.
As of June 30, 2025, we were not subject to the fixed-charge coverage ratio requirement, had no borrowings outstanding under the Facility, were in compliance with all other covenants, and had borrowing availability of $121.0 million of the $125.0 million credit commitment.
Qualitative factors reviewed included a review for significant adverse changes in customer demand or business climate that could affect the value of the asset, a product recall or an adverse action or assessment by a regulator.
Qualitative factors reviewed included a review for significant adverse changes in client demand or business climate that could affect the value of the asset, a product recall or an adverse action or assessment by a regulator.
Both goodwill and indefinite-lived intangible assets are assigned to our wholesale reporting unit which is principally involved in the development of the Ethan Allen brand and encompasses all aspects of design, manufacturing, sourcing, marketing, sale and distribution of the Company’s broad range of home furnishings and accents. Goodwill.
Both goodwill and indefinite-lived intangible assets are assigned to our wholesale reporting unit which is principally involved in the development of the Ethan Allen brand and encompasses all aspects of design, manufacturing, sourcing, marketing, sale and distribution of our home furnishings and accents. Goodwill.
Refer to Results of Operations under Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations , contained in Part II of our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the SEC on August 24, 2023, for an analysis of the fiscal 2023 results as compared to fiscal 2022.
Refer to Results of Operations under Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations , contained in Part II of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on August 23, 2024, for an analysis of the fiscal 2024 results as compared to fiscal 2023.
The following tables below show a reconciliation of non-GAAP financial measures used in this filing to the most directly comparable GAAP financial measures.
AND SUBSIDIARIES The following tables below show a reconciliation of non-GAAP financial measures used in this filing to the most directly comparable GAAP financial measures.
AND SUBSIDIARIES Regulation G Reconciliations of Non-GAAP Financial Measures To supplement the financial measures prepared in accordance with GAAP, we use non-GAAP financial measures, including adjusted operating income and margin, adjusted wholesale operating income and margin, adjusted retail operating income and margin, adjusted net income and adjusted diluted EPS.
Regulation G Reconciliations of Non-GAAP Financial Measures To supplement the financial measures prepared in accordance with GAAP, we use non-GAAP financial measures, including adjusted operating income and margin, adjusted net income and adjusted diluted EPS.
At June 30, 2024 our inventory reserves totaled $1.8 million, which we estimate for excess quantities and obsolete items based on specific identification and historical write-downs, taking into account future demand and market conditions.
At June 30, 2025 our inventory reserves totaled $1.5 million, which we estimate for excess quantities and obsolete items based on specific identification and historical write-downs, taking into account future demand and market conditions.
AND SUBSIDIARIES For a discussion of our liquidity and capital resources and our cash flow activities for the fiscal year ended June 30, 2023, see Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations , of our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, filed with the SEC on August 24, 2023.
For a discussion of our liquidity and capital resources and our cash flow activities for the fiscal year ended June 30, 2024, see Item 7, Management ’ s Discussion and Analysis of Financial Condition and Results of Operations , of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on August 23, 2024.
Despite the limitations of these non-GAAP financial measures, we believe these adjusted financial measures and the information they provide are useful in viewing our performance using the same tools that management uses to assess progress in achieving our goals. Adjusted measures may also facilitate comparisons to our historical performance.
Despite the limitations of these non-GAAP financial measures, we believe these adjusted financial measures and the information they provide are useful in viewing our performance using the same tools that management uses to assess progress in achieving our goals. Adjusted measures may also facilitate comparisons to our historical performance. 25 ETHAN ALLEN INTERIORS INC.
Our credit agreement also includes covenants that include limitations on our ability to pay dividends. Share Repurchase Program. There were no share repurchases under our existing multi-year share repurchase program during fiscal 2024 or 2023. At June 30, 2024, we had a remaining Board authorization to repurchase 2,007,364 shares of our common stock pursuant to our share repurchase program.
Our credit agreement also includes covenants with certain limitations on our ability to pay dividends. Share Repurchase Program. There were no share repurchases under our existing multi-year share repurchase program during fiscal 2025 or 2024. At June 30, 2025, we had a remaining Board authorization to repurchase 2,007,364 shares of our common stock pursuant to our share repurchase program.
At June 30, 2024 and 2023, our product warranty liability totaled $1.0 million and $1.3 million, respectively. Our products, including our case goods, upholstery and home accents, generally carry explicit product warranties and are provided based on terms that are generally accepted in the industry.
At both June 30, 2025 and 2024, our product warranty liability totaled $1.0 million. Our products, including case goods, upholstery and home accents, generally carry explicit product warranties and are provided based on terms that are generally accepted in the industry.
In performing the qualitative assessment, we considered such factors as macroeconomic conditions, industry and market conditions in which we operate including the competitive environment and any significant changes in demand. We also considered our stock price both in absolute terms and in relation to peer companies. Indefinite-Lived Intangible Assets.
In performing the qualitative assessment, we considered such factors as macroeconomic conditions, industry and market conditions in which we operate, including the competitive environment and any significant changes in demand. We also considered our stock price both in absolute terms and in relation to peer companies. 31 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Indefinite-Lived Intangible Assets.
We had purchase obligations, defined as agreements that are enforceable and legally binding that specify all significant terms, including fixed or minimum quantities to be purchased, of $30.7 million at June 30, 2024, comparable to $29.2 million in the prior year period.
We had purchase obligations, defined as agreements that are enforceable and legally binding that specify all significant terms, including fixed or minimum quantities to be purchased, of $21.0 million at June 30, 2025, comparable to $30.7 million in the prior year period.
Factors used in the valuation of intangible assets with indefinite lives include, but are not limited to, management’s plans for future operations, recent results of operations and projected future cash flows. 33 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Similar to goodwill, we may elect to perform a qualitative assessment.
Factors used in the valuation of intangible assets with indefinite lives include, but are not limited to, management’s plans for future operations, recent results of operations and projected future cash flows. Similar to goodwill, we may elect to perform a qualitative assessment.
We adjust insurance reserves, as needed, in the event that future loss experience differs from historical loss patterns. 34 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Significant Accounting Policies See Note 3, Summary of Significant Accounting Policies , in the notes to our consolidated financial statements included under Part II, Item 8, for a full description of our significant accounting policies.
We adjust insurance reserves, as needed, in the event that future loss experience differs from historical loss patterns. Significant Accounting Policies See Note 3, Summary of Significant Accounting Policies , in the notes to our consolidated financial statements included under Part II, Item 8, for a full description of our significant accounting policies.
Our effective tax rate of 25.3% varies from the 21% federal statutory rate primarily due to state taxes. Net Income and Diluted EPS Net income for fiscal 2024 was $63.8 million compared with $105.8 million in the prior year period.
Our effective tax rate was 25.2% compared with 25.3% in the prior year. Our effective tax rate of 25.2% varies from the 21% federal statutory rate primarily due to state taxes. Net Income and Diluted EPS Net income for fiscal 2025 was $51.6 million compared with $63.8 million in the prior year period.
We make frequent comparisons throughout the year of actual experience to our assumptions to reduce the likelihood of significant adjustments and will record adjustments when differences are known. The following critical accounting estimates affect our consolidated financial statements.
We make frequent comparisons throughout the year of actual experience to our assumptions to reduce the likelihood of significant adjustments and will record adjustments when differences are known. 30 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES The following critical accounting estimates affect our consolidated financial statements.
For retail design center level long-lived assets, expected cash flows are determined based on our estimate of future net sales, margin rates and expenses over the remaining expected terms of the leases. 32 ETHAN ALLEN INTERIORS INC.
For retail design center long-lived assets, expected cash flows are determined based on our estimate of future net sales, margin rates and expenses over the remaining expected terms of the leases.
Wholesale selling expenses, which include our logistics operation, decreased 16.8% primarily from a 17.1% decline in wholesale units shipped, lower freight costs including fuel, and less outgoing distribution costs combined with reduced headcount partially offset by an increase in technology spend.
Wholesale selling expenses, which include our logistics operation, decreased 0.1% from a 9.8% decline in wholesale units shipped, lower freight costs including fuel, and less outgoing distribution costs combined with reduced headcount partially offset by an increase in advertising expenses and digital and web-technology spend.
(in millions) Fiscal Year Ended June 30, 2024 2023 2022 Operating activities Net income $ 63.8 $ 105.8 $ 103.3 Non-cash operating lease cost 32.0 30.2 30.3 Restructuring and other charges, net of gains (0.1 ) (3.7 ) (4.4 ) Payments on restructuring and other charges, net of proceeds (1.0 ) (1.0 ) (1.6 ) Depreciation and amortization and other non-cash items 17.4 17.4 17.3 Deferred income taxes (0.2 ) (1.2 ) (0.4 ) Changes in operating assets and liabilities (31.7 ) (46.8 ) (75.1 ) Total provided by operating activities $ 80.2 $ 100.7 $ 69.4 Investing activities Capital expenditures $ (9.6 ) $ (13.9 ) $ (13.4 ) Proceeds from sales of property, plant and equipment - 9.9 10.6 Purchases of investments, net of sales (10.4 ) (97.5 ) (11.2 ) Total used in investing activities $ (20.0 ) $ (101.5 ) $ (14.0 ) Financing activities Taxes paid related to net share settlement of equity awards $ (2.1 ) $ (0.8 ) $ (0.8 ) Dividend payments (50.3 ) (46.4 ) (48.3 ) Proceeds from employee stock plans 0.5 0.1 1.1 Payments for debt issuance costs - - (0.5 ) Payments on financing leases and other (0.4 ) (0.5 ) (0.5 ) Total used in financing activities $ (52.3 ) $ (47.6 ) $ (49.0 ) Our cash and cash equivalents increased $7.6 million or 12.2% during fiscal 2024 due to net cash provided by operating activities of $80.2 million partially offset by $50.3 million in cash dividends paid, capital expenditures of $9.6 million, $10.4 million in net purchases of investments and $2.1 million in taxes paid related to net share settlement of vested RSUs and PSUs.
(in millions) Fiscal Year Ended June 30, 2025 2024 2023 Operating activities Net income $ 51.6 $ 63.8 $ 105.8 Non-cash operating lease cost 32.7 32.0 30.2 Restructuring and other charges, net of gains 0.3 (0.1 ) (3.7 ) Payments on restructuring and other charges, net of proceeds (0.6 ) (1.0 ) (1.0 ) Depreciation and amortization 15.5 16.0 15.6 Deferred income taxes and other non-cash items 1.6 1.2 0.6 Changes in operating assets and liabilities (39.4 ) (31.7 ) (46.8 ) Total provided by operating activities $ 61.7 $ 80.2 $ 100.7 Investing activities Capital expenditures $ (11.3 ) $ (9.6 ) $ (13.9 ) Proceeds from sales of property, plant and equipment - - 9.9 Proceeds from sales of investments, net of purchases 8.9 (10.4 ) (97.5 ) Total used in investing activities $ (2.4 ) $ (20.0 ) $ (101.5 ) Financing activities Taxes paid related to net share settlement of equity awards $ (2.2 ) $ (2.1 ) $ (0.8 ) Dividend payments (50.1 ) (50.3 ) (46.4 ) Proceeds from employee stock plans - 0.5 0.1 Payments on financing leases and other (0.3 ) (0.4 ) (0.5 ) Total used in financing activities $ (52.6 ) $ (52.3 ) $ (47.6 ) Our cash, cash equivalents and restricted cash increased $6.7 million or 9.6% during fiscal 2025 due to $61.7 million in net cash provided by operating activities and $8.9 million of proceeds from sales of investments, net of purchases, partially offset by $50.1 million in cash dividends paid, capital expenditures of $11.3 million and $2.2 million in taxes paid related to net share settlement of vested equity awards.
We also own and operate ten manufacturing facilities, including four manufacturing plants, one sawmill, one rough mill and a kiln dry lumberyard in the United States, two upholstery manufacturing plants in Mexico and one case goods manufacturing plant in Honduras. Approximately 75% of our furniture is manufactured in our North American plants.
We also own and operate eleven manufacturing facilities, including four manufacturing plants, one sawmill, one rough mill and a kiln dry lumberyard in the U.S., three upholstery manufacturing plants in Mexico and one case goods manufacturing plant in Honduras. Approximately 75% of our furniture is manufactured in our North American plants.
AND SUBSIDIARIES The following table illustrates the main components of our cash flows for each of the last three fiscal years.
The following table illustrates the main components of our cash flows during each of the last three fiscal years.
We remain focused on a disciplined approach to cost savings and expense control in a declining net sales environment, which helped mitigate the impact of the reduction in consolidated net sales. Wholesale operating income for fiscal 2024 was $48.7 million or 13.1% of net sales, compared to $68.8 million or 15.3% in the prior year period.
We remain focused on a disciplined approach to cost savings and expense control in a challenging environment, which helped mitigate the impact of reduced consolidated net sales. Wholesale operating income for fiscal 2025 was $47.0 million or 13.1% of net sales, compared to $48.7 million or 13.1% in the prior year.
The tax laws also require us to allocate our taxable income to many jurisdictions based on subjective allocation methodologies and information collection processes. We use the asset and liability method to account for income taxes.
The tax laws also require us to allocate our taxable income to many jurisdictions based on subjective allocation methodologies and information collection processes. Our effective tax rate varies from the 21% federal statutory rate primarily due to state taxes. We use the asset and liability method to account for income taxes.
At both June 30, 2024 and 2023, we held $0.5 million of restricted cash related to the Ethan Allen insurance captive. Exchange Rate Changes Due to changes in exchange rates, our cash and cash equivalents were negatively impacted by $0.3 million during fiscal 2024 compared with a $0.2 million positive impact in the prior year period.
At June 30, 2025 we held $0.8 million of restricted cash related to the Ethan Allen insurance captive compared to $0.5 million in the prior year. Exchange Rate Changes Due to changes in exchange rates, our cash and cash equivalents were impacted by less than $0.1 million during fiscal 2025 compared with $0.3 million in the prior year period.
Non-Operating Income (Expense) (in thousands) Fiscal Year Ended June 30, 2024 2023 % Change Interest and other income, net $ 7,700 $ 4,042 90.5 % Interest and other financing costs $ 245 $ 213 15.0 % Interest and other income, net includes interest income on investments, foreign currency gains or losses and other income or expense incurred outside our normal course of business.
AND SUBSIDIARIES Other Income (Expense) (in thousands) Fiscal Year Ended June 30, 2025 2024 % Change Interest and other income, net $ 7,275 $ 7,700 (5.5% ) Interest and other financing costs $ 243 $ 245 (0.8% ) Interest and other income, net includes interest income on investments, foreign currency gains or losses and other income (expense) incurred outside our normal course of business.
These business insurance reserves are recorded within Accrued compensation and benefits on our consolidated balance sheets. Although we believe that the reserves are adequate, the estimates are based on historical experience, which may not be indicative of current and future losses. In addition, the actuarial calculations used to estimate reserves are based on numerous assumptions, some of which are subjective.
Although we believe that the reserves are adequate, the estimates are based on historical experience, which may not be indicative of current and future losses. In addition, the actuarial calculations used to estimate reserves are based on numerous assumptions, some of which are subjective.
Our purchase obligations at June 30, 2024, all payable within 12 months, related to purchase orders for the procurement of selected finished goods sourced from third-party suppliers, lumber, fabric, leather and other raw materials used in our manufacturing. ● Long-term Debt. We had no outstanding borrowings under our revolving credit facility at June 30, 2024.
Our purchase obligations at June 30, 2025, all payable within 12 months, related to purchase orders for the procurement of selected finished goods sourced from third-party suppliers, lumber, fabric, leather and other raw materials used in our manufacturing.
Wholesale gross margin was down 70 basis points over the prior year period due to reduced production volumes which led to increased plant inefficiencies and related manufacturing variances, inflationary pressure on labor and rising fuel costs partially offset by lower raw material input costs, reduced headcount and investments in technology, which helped streamline production workflows.
Wholesale gross margin was up 70 basis points over the prior year due to lower raw material and fuel input costs, reduced headcount and investments in technology, which helped streamline production workflows. These benefits were partially offset by reduced production volumes from lower incoming written orders, which led to increased plant inefficiencies and higher manufacturing variances.
During fiscal 2024, we had $10.4 million of net purchases of investments, which represent $124.5 million of U.S. Treasuries that matured during the year and were subsequently reinvested at a higher amount totaling $134.9 million.
The prior year included an outgoing $10.4 million of net purchases of investments, which related to $124.5 million of U.S. treasuries that matured during the year and were subsequently reinvested at a higher amount of $134.9 million.
Retail gross profit decreased 18.8% due to the 18.4% decrease in net shipments combined with a 30-basis point reduction in gross margin. 24 ETHAN ALLEN INTERIORS INC.
Retail gross profit decreased 3.8% due to the 3.2% decrease in net shipments combined with a 30-basis point reduction in gross margin.
Our material cash requirements for our contractual obligations at June 30, 2024 were as follows: ● Lease Obligations. We lease real estate for retail stores, distribution centers and office space and also have equipment leases for IT and office equipment.
AND SUBSIDIARIES Our material cash requirements for our contractual obligations at June 30, 2025 were as follows: ● Lease Obligations. We lease real estate for both retail design centers and home delivery centers and also have equipment leases for certain equipment.
We have a strong history of returning capital to shareholders and continued this practice during fiscal 2024 as the following actions were taken pertaining to dividends. ● On August 1, 2023, our Board declared a $0.50 per share special cash dividend in addition to our regular quarterly cash dividend of $0.36 per share, both paid on August 31, 2023 ● On October 24, 2023, our Board declared a regular quarterly cash dividend of $0.36 per share, which was paid on November 22, 2023 ● On January 23, 2024, our Board declared a regular quarterly cash dividend of $0.36 per share, which was paid on February 22, 2024 ● On April 22, 2024, our Board increased our regular quarterly cash dividend by 8.3% to $0.39 per share, which was paid on May 23, 2024 30 ETHAN ALLEN INTERIORS INC.
We have a strong history of returning capital to shareholders and continued this practice during fiscal 2025 as the following actions were taken pertaining to dividends. ● On July 30, 2024, our Board declared a $0.40 per share special cash dividend in addition to our regular quarterly cash dividend of $0.39 per share, both paid on August 29, 2024 ● On October 29, 2024, our Board declared a regular quarterly cash dividend of $0.39 per share, which was paid on November 27, 2024 ● On January 28, 2025, our Board declared a regular quarterly cash dividend of $0.39 per share, which was paid on February 26, 2025 ● On May 5, 2025, our Board declared a regular quarterly cash dividend of $0.39 per share, which was paid on May 29, 2025 During fiscal 2025 we paid a total of $1.96 per share in cash dividends for an aggregate total of $50.1 million.
The MD&A is based upon, and should be read in conjunction with, our Consolidated Financial Statements and related Notes included under Item 8 of this Annual Report on Form 10-K. Executive Overview Who We Are . Founded in 1932, Ethan Allen is a leading interior design company, manufacturer and retailer in the home furnishings marketplace.
The MD&A is based upon, and should be read in conjunction with Item 7A. Quantitative and Qualitative Disclosures About Market Risks and our Consolidated Financial Statements and related Notes included under Item 8 of this Annual Report on Form 10-K. Executive Overview Who We Are .
These areas of focus along with our interior design professionals combining personal service with technology contributed to Ethan Allen being named to Newsweek’s list of America’s Best Retailers 2024, for the second year in a row. Business Model.
These areas of focus along with our interior design professionals combining personal service with technology contributed to Ethan Allen recently being named America’s #1 Premium Retailer by Newsweek , for the third year in a row.
Treasury bills totaled $91.3 million with maturities of less than one year while our U.S. Treasury notes totaled $34.8 million with maturities ranging between one and two years. We believe our cash, cash equivalents and investments are available to meet short-term liquidity needs. 28 ETHAN ALLEN INTERIORS INC.
Treasury bills and notes, which we expect will further enhance our returns on excess cash. Our U.S. Treasury bills with maturities of less than one year totaled $60.0 million while our U.S. Treasury notes with maturities ranging between one and two years totaled $60.0 million. We believe our cash, cash equivalents and investments are available to meet short-term liquidity needs.
Retail sales, when expressed as a percentage of total consolidated net sales, was 83.6% in fiscal 2024, comparable to 83.7% in the prior year period, which had a neutral effect on our consolidated gross margin.
Retail sales, when expressed as a percentage of total consolidated net sales, were 85.1% in fiscal 2025, up from 83.6% in the prior year period, which had a positive impact on our consolidated gross margin.
The fiscal 2024 restructuring credit was due to a $2.6 million gain related to the amortization of the deferred liability generated from the August 1, 2022 sale-leaseback transaction partially offset by a $2.2 million net loss incurred from the damage sustained in the July 2023 Vermont flooding and severance costs of $0.4 million.
The prior year gain of $0.1 million related to a $2.6 million gain related to the amortization of the deferred liability generated from the sale-leaseback transaction completed on August 1, 2022 partially offset by $2.2 million in net losses from the July 2023 Vermont flood and $0.4 million in severance and other charges.
We believe these sources remain adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, invest in capital expenditures and fulfill other cash requirements for day-to-day operations and contractual obligations. We are committed to maintaining a strong balance sheet and monitoring our liquidity closely.
We believe these sources remain adequate to meet our short-term requirements and contractual obligations and fulfill other cash requirements for day-to-day operations for at least the next twelve months, as well as to meet long-term liquidity requirements and contractual obligations, finance our long-term growth plans and invest in capital expenditures for the foreseeable future.
Income Taxes We are subject to income taxes in the United States and other foreign jurisdictions. Our tax provision is an estimate based on our understanding of laws in Federal, state and foreign tax jurisdictions. These laws can be complicated and are difficult to apply to any business, including ours.
Our effective tax rate for fiscal 2025 was 25.2% compared with 25.3% in the prior year. Our tax provision is an estimate based on our understanding of laws in Federal, state and foreign tax jurisdictions. These laws can be complicated and are difficult to apply to any business, including ours.
Our Board increased our regular quarterly cash dividend by 8.3% to $0.39 per share and declared a special cash dividend of $0.50 per share, bringing the total amount of dividends paid to $50.3 million during the fiscal year.
We continued our history of returning capital to shareholders by paying four regular cash dividends of $0.39 and declared a special cash dividend of $0.40 per share, bringing the total amount of dividends paid to $50.1 million during fiscal 2025.
Further discussion of our contractual obligations associated with long-term debt can be found in Note 12, Credit Agreement , to the consolidated financial statements included under Item 8 of this Annual Report on Form 10-K. ● Other Purchase Obligations.
For more information, see Note 12, Credit Agreement , in the notes to the consolidated financial statements included under Item 8 of this Annual Report on Form 10-K. ● Other Purchase Obligations.
(in thousands) Fiscal Year Ended June 30, 2024 2023 % Change Consolidated net sales $ 646,221 $ 791,382 (18.3% ) Wholesale net sales $ 371,087 $ 449,591 (17.5% ) Retail net sales $ 540,550 $ 662,555 (18.4% ) Consolidated gross profit $ 393,062 $ 480,370 (18.2% ) Consolidated gross margin 60.8 % 60.7 % 23 ETHAN ALLEN INTERIORS INC.
(in thousands) Fiscal Year Ended June 30, 2025 2024 % Change Consolidated net sales $ 614,649 $ 646,221 (4.9% ) Wholesale net sales $ 359,057 $ 371,087 (3.2% ) Retail net sales $ 523,142 $ 540,550 (3.2% ) Consolidated gross profit $ 372,121 $ 393,062 (5.3% ) Consolidated gross margin 60.5 % 60.8 % 22 ETHAN ALLEN INTERIORS INC.
Income Taxes, Net Income and Diluted Earnings per Share ( “ EPS ” ) (in thousands) Fiscal Year Ended June 30, 2024 2023 % Change Income tax expense $ 21,630 $ 35,218 (38.6% ) Effective tax rate 25.3 % 25.0 % Net income $ 63,816 $ 105,807 (39.7% ) Adjusted net income $ 63,758 $ 103,057 (38.1% ) Diluted EPS $ 2.49 $ 4.13 (39.7% ) Adjusted diluted EPS $ 2.49 $ 4.03 (38.2% ) Income Tax Expense Income tax expense was $21.6 million compared with $35.2 million in the prior year due to the $55.6 million decrease in income before income taxes as our consolidated effective tax rate was 25.3% compared with 25.0% in the prior year.
Income Taxes, Net Income and Diluted Earnings per Share ( “ EPS ” ) (in thousands) Fiscal Year Ended June 30, 2025 2024 % Change Income tax expense $ 17,424 $ 21,630 (19.4% ) Effective tax rate 25.2 % 25.3 % Net income $ 51,596 $ 63,816 (19.1% ) Adjusted net income $ 52,271 $ 63,758 (18.0% ) Diluted EPS $ 2.01 $ 2.49 (19.3% ) Adjusted diluted EPS $ 2.04 $ 2.49 (18.1% ) Income Tax Expense Income tax expense for fiscal 2025 decreased $4.2 million or 19.4% compared with the prior year due to the $16.4 million decrease in income before income taxes.
We provide complimentary interior design service to our clients and sell a full range of home furnishings through a retail network of design centers located throughout the United States and internationally as well as online at ethanallen.com. Ethan Allen design centers represent a mix of locations operated by independent licensees and Company-operated locations.
We are known for the quality and craftsmanship of our products as well as for the exceptional personal service from design to delivery. We provide complimentary interior design service to our clients and sell a full range of home furnishings through a retail network of design centers located throughout the U.S. and internationally as well as online at ethanallen.com.
Adjusted operating income, which excludes restructuring and other charges, net of gains, was $77.9 million, or 12.1% of net sales compared with $133.5 million, or 16.9% of net sales in the prior year period. The decrease in operating income was driven by lower consolidated net sales partially offset by lower SG&A expenses.
Consolidated Operating Income Consolidated operating income for fiscal 2025 decreased $16.0 million or 20.5%. Adjusted operating income was $62.9 million, or 10.2% of net sales compared with $77.9 million, or 12.1% of net sales in the prior year. The primary driver of reduced operating income was lower consolidated net sales partially offset by lower SG&A expenses.
Diluted EPS for fiscal 2024 was $2.49 compared to $4.13 per diluted share in the prior year period. Adjusted diluted EPS was $2.49, down 38.2% compared with the prior year period. The decrease in diluted EPS was primarily due to lower consolidated net sales partially offset by lower operating expenses. 26 ETHAN ALLEN INTERIORS INC.
Adjusted diluted EPS was $2.04, down 18.1% compared with the prior year period. The decrease in diluted EPS was primarily due to lower consolidated net sales partially offset by lower SG&A expenses.
We are required to receive GSA approval to apply list price increases during the term of the Multiple Award Schedule Contract period. Contingencies We are involved in various claims and litigation as well as environmental matters, which arise in the normal course of business.
Contingencies We are involved in various claims and litigation as well as environmental matters, which arise in the normal course of business.
We are a global luxury home fashion brand that is vertically integrated from product design through home delivery, which offers clients stylish product offerings, artisanal quality and personalized service. We are known for the quality and craftsmanship of our products as well as for the exceptional personal service from design to delivery.
Founded in 1932, Ethan Allen is a leading interior design company, manufacturer and retailer in the home furnishings marketplace. We are a global luxury home fashion brand that is vertically integrated from product design through home delivery, which offers clients stylish product offerings, artisanal quality and personalized service.
At June 30, 2024, we had working capital of $179.0 million compared with $196.4 million at June 30, 2023 and a current ratio of 2.16 at June 30, 2024, comparable to 2.20 a year ago. Our non-U.S. subsidiaries held $4.3 million in cash and cash equivalents at June 30, 2024, which we have determined to be permanently reinvested.
Our non-U.S. subsidiaries held $3.6 million in cash and cash equivalents at June 30, 2025, which we have determined to be permanently reinvested. Summary of Cash Flows At June 30, 2025, we held cash and cash equivalents of $76.2 million compared with $69.7 million at June 30, 2024.
With our dividends, we have returned $671.2 million to shareholders since our initial public offering in 1993. We have paid a special cash dividend each of the past four years and paid an annual cash dividend every year since 1996.
We have paid a special cash dividend each of the past five years and paid an annual cash dividend every year since 1996.
AND SUBSIDIARIES Net Sales Consolidated net sales in fiscal 2024 decreased $145.2 million or 18.3% compared to the prior year period due to an 18.4% reduction in retail sales through our Company-operated design centers and a decline of 17.5% in wholesale net sales.
Wholesale net sales in fiscal 2025 decreased 3.2% compared to the prior year primarily due to a decline in contract sales partially offset by an increase in intersegment sales to our Company-operated design centers. Excluding intersegment sales to our retail segment, wholesale net sales decreased $14.2 million or 13.4% compared to the prior year period.
Selling, General & Administrative ( “ SG&A ” ) Expenses (in thousands) Fiscal Year Ended June 30, 2024 2023 % Change SG&A expenses $ 315,148 $ 346,894 (9.2% ) Restructuring and other impairment charges, net of gains $ (77 ) $ (3,720 ) (97.9% ) Consolidated operating income $ 77,991 $ 137,196 (43.2% ) Consolidated operating margin 12.1 % 17.3 % Wholesale operating income $ 48,707 $ 68,792 (29.2% ) Retail operating income $ 24,704 $ 67,256 (63.3% ) SG&A expenses for fiscal 2024 decreased $31.7 million or 9.2% compared to the prior year period due to lower selling expenses from less delivered net sales and a reduction in general and administrative costs.
AND SUBSIDIARIES Selling, General & Administrative ( “ SG&A ” ) Expenses (in thousands) Fiscal Year Ended June 30, 2025 2024 % Change SG&A expenses $ 309,790 $ 315,148 (1.7% ) Restructuring and other impairment charges, net of gains $ 343 $ (77 ) (545.5% ) Consolidated operating income $ 61,988 $ 77,991 (20.5% ) Consolidated operating margin 10.1 % 12.1 % Consolidated adjusted operating income $ 62,895 $ 77,914 (19.3% ) Consolidated adjusted operating margin 10.2 % 12.1 % Wholesale operating income $ 46,989 $ 48,707 (3.5% ) Retail operating income $ 19,781 $ 24,704 (19.9% ) SG&A expenses for fiscal 2025 decreased $5.4 million or 1.7% compared to the prior year.
Other purchase commitments for services such as telecommunication, computer-related software, web development, financial and accounting software services, insurance and other maintenance contracts was $14.9 million at June 30, 2024, down from $16.9 million in the prior year period primarily due to timing of contract signing and extensions combined with use of other more-cost effective services. 31 ETHAN ALLEN INTERIORS INC.
Other purchase commitments for services such as telecommunication, software, web development, financial and accounting services, insurance and other maintenance contracts was $14.8 million at June 30, 2025 compared with $14.9 million in the prior year period.
At June 30, 2024, the Company operates 142 retail design centers, 138 located in the United States and four in Canada. Our independently operated design centers are located in the United States, Asia, the Middle East and Europe.
Ethan Allen design centers represent a mix of locations operated by independent licensees and Company-operated locations. At June 30, 2025, the Company operates 142 retail design centers, 137 located in the U.S. and five in Canada. Our independently operated design centers are located in the U.S., Asia, the Middle East and Europe.
We seek to constantly reinvent our projection and product offerings through a broad selection of products, designed to complement one another, reflecting current fashion trends in home furnishing. Our vertical integration is a competitive advantage for us.
We seek to constantly reinvent our projection and product offerings through a broad selection of products, designed to complement one another, reflecting current fashion trends in home furnishing. Talent. At June 30, 2025, our employee count totaled 3,211, with 2,239 employees in our wholesale segment and 972 in our retail segment.
At June 30, 2024, we had operating and finance lease obligations of $151.3 million and $1.1 million, respectively, with $33.9 million and $0.4 million payable within 12 months, respectively. For more information, see Note 6, Leases , in the notes to consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. ● Open Purchase Orders.
For more information, see Note 6, Leases , in the notes to consolidated financial statements included under Item 8 of this Annual Report on Form 10-K. ● Open Purchase Orders.
June 30, June 30, 2024 2023 Cash and cash equivalents $ 69,710 $ 62,130 Investments, short-term 91,319 110,577 Investments, long-term (1) 34,772 - Availability under existing credit facility 120,952 120,952 Total Available Liquidity $ 316,753 $ 293,659 (1) Our long-term investments in U.S. Treasury notes are classified as non-current as they have stated maturities greater than one year.
June 30, 2025 2024 Cash and cash equivalents $ 76,178 $ 69,710 Investments, short-term 59,955 91,319 Investments, long-term (1) 60,030 34,772 Availability under existing credit facility 120,952 120,952 Total available liquidity $ 317,115 $ 316,753 (1) Our long-term investments in U.S.
Summary of Cash Flows At June 30, 2024, we held cash and cash equivalents of $69.7 million compared with $62.1 million at June 30, 2023. Cash and cash equivalents aggregated to 9.4% of our total assets at June 30, 2024, compared with 8.3% a year ago.
Cash and cash equivalents aggregated to 10.3% of our total assets at June 30, 2025, compared with 9.4% a year ago. In addition to cash and cash equivalents of $76.2 million, we had aggregated investments of $120.0 million at June 30, 2025 compared with $126.1 million at June 30, 2024. Our investments at June 30, 2025 are within U.S.
We are pleased with the continued strengthening of our teams and the performance of our employees during fiscal 2024 while at the same time being able to reduce headcount through operational efficiencies. Our employee count decreased 9.2% during fiscal 2024, with 46 fewer employees in retail and 298 fewer employees in wholesale. Fiscal 2024 Financial Year in Review (1) .
Our employee count decreased 5.7% or 193 associates during fiscal 2025, with 56 fewer employees in retail and 137 fewer employees in wholesale. We were pleased to strengthen our teams during fiscal 2025 while at the same time reducing headcount through operational efficiencies. 21 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Fiscal 2025 Financial Year in Review (1) .
The decrease in adjusted wholesale operating income was driven primarily by the 17.5% decline in wholesale net sales partially offset by the 13.8% reduction in wholesale SG&A expenses. Retail operating income for fiscal 2024 was $24.7 million or 4.6% of retail net sales, compared to $67.3 million or 10.2% in the prior year period.
Retail operating income for fiscal 2025 was $19.8 million or 3.8% of retail net sales, compared to $24.7 million or 4.6% in the prior year.
The programs, which are funded through self-insured retention, are subject to stop-loss limitations. We accrue estimated losses using actuarial models and assumptions based on historical loss experience. At June 30, 2024, we recorded a liability of $1.5 million for incurred but not reported healthcare claims and $3.9 million related to workers’ compensation claims.
AND SUBSIDIARIES Business Insurance Reserves We have insurance programs in place for workers’ compensation and healthcare under certain employee benefit plans provided by the Company. The programs, which are funded through self-insured retention, are subject to stop-loss limitations. We accrue estimated losses using actuarial models and assumptions based on historical loss experience.
Cash Provided by Operating Activities During fiscal 2024 we generated $80.2 million in cash from operating activities, a decrease from $100.7 million in the prior year period due to lower net income partially offset by improvements in net working capital. Restructuring payments made during fiscal 2024 of $1.0 million related primarily to the Orleans flood restoration.
Cash Provided by Operating Activities Cash provided by operating activities in fiscal 2025 was primarily attributable to net income, adjusted for non-cash items, partially offset by changes in working capital. We generated $61.7 million in cash from operating activities during fiscal 2025 compared with $80.2 million in the prior year.
The effect of our contractual obligations on our liquidity and capital resources in future periods should be considered in conjunction with the factors mentioned here. At June 30, 2024, we had total contractual obligations of $197.9 million, comparable to $199.1 million a year ago as there were no material changes during fiscal 2024.
The effect of our contractual obligations on our liquidity and capital resources in future periods should be considered in conjunction with the factors mentioned here.
AND SUBSIDIARIES Consolidated gross margin was 60.8%, a 10-basis point improvement over the prior year period due to reduced headcount, disciplined promotional activity, lower manufacturing raw material input costs and favorable intercompany inventory profit eliminations partially offset by deleveraging from lower delivered sales and increased designer floor sample sales. Our sales mix was comparable to the prior year.
Our consolidated gross margin of 60.5% was comparable to 60.8% in the prior year as benefits from a change in sales mix, lower input costs, reduced headcount, fewer designer floor sample sales and selective price increases were offset by lower unit volume sales, increased promotional activity and higher financing costs.
Our North American manufacturing and logistics operations are an integral part of an overall strategy to maximize production efficiencies and maintain this competitive advantage. 22 ETHAN ALLEN INTERIORS INC. AND SUBSIDIARIES Talent. At June 30, 2024, our employee count totaled 3,404, with 2,376 employees in our wholesale segment and 1,028 in our retail segment.
Our North American manufacturing and logistics operations are an integral part of an overall strategy to maximize production efficiencies and maintain this competitive advantage.
Adjusted net income, which removes the after-tax impact of restructuring and other charges, net of gains, was $63.8 million, a decrease of 38.1% compared to $103.1 million in the prior year period. The decrease in net income and adjusted net income was driven by the $145.2 million reduction in consolidated net sales partially offset by lower operating expenses.
Adjusted net income was $52.3 million, a decrease of 18.0% compared with $63.8 million in the prior year period. The decrease in net income was driven by the $31.6 million reduction in consolidated net sales partially offset by lower SG&A expenses. Diluted EPS for fiscal 2025 was $2.01 compared to $2.49 per diluted share in the prior year period.
The liability associated with an unrecognized tax benefit is classified as a long-term liability except for the amount for which a cash payment is expected to be made or tax positions settled within one year. Business Insurance Reserves We have insurance programs in place for workers’ compensation and healthcare under certain employee benefit plans provided by the Company.
The liability associated with an unrecognized tax benefit is classified as a long-term liability except for the amount for which a cash payment is expected to be made or tax positions settled within one year. As of June 30, 2025, we had gross unrecognized tax benefits totaling $3.9 million, consistent with the year ago period. 32 ETHAN ALLEN INTERIORS INC.
Capital expenditures during fiscal 2024 were $9.6 million compared with $13.9 million in the prior year period. Fiscal 2024 capital expenditures primarily related to design center openings, relocations and improvements, replacement of machinery and equipment used within our manufacturing and distribution facilities, and investments in technology.
Capital expenditures during fiscal 2025 totaled $11.3 million compared with $9.6 million in the prior year. Current year capital expenditures related primarily to the further expansion of our manufacturing facilities in Mexico, new retail design centers, investments in technology, and remodeling costs associated with our hotel.
The decrease in adjusted retail operating income is driven primarily by the 18.4% decrease in retail net sales partially offset by the 7.6% reduction in retail SG&A expenses.
The decrease in operating income was driven primarily by the $17.4 million reduction in retail net sales combined with a 30-basis point drop in gross margin partially offset by a decline in SG&A expenses. 24 ETHAN ALLEN INTERIORS INC.
The decline in retail net sales was primarily from a decline in delivered unit volume as a result of lower manufacturing levels, combined with lower written orders, reduced backlog and decreased premier home delivery revenue partially offset by higher designer floor sample sales and selective price increases.
Retail net sales from Company-operated design centers decreased 3.2% during fiscal 2025 compared to the prior year primarily from reduced delivered unit volumes, lower written orders, less available backlog, lower designer floor sample sales and decreased premier home delivery revenue partially offset by an increase in average ticket price.
New state-of-the-art design centers in The Villages, FL, Avon, OH, New York, NY, Albuquerque, NM and Louisville, KY were also opened during fiscal 2024 and showcase our unique vision of American style while combining complimentary interior design services with technology.
During fiscal 2025, we opened four new design centers in Middleton, WI, Toronto, Canada, Peoria, AZ and Watchung, NJ that showcase our unique vision of American style while combining complimentary interior design services with technology.
We incurred financing costs of $0.5 million during fiscal 2022, which are being amortized as interest expense over the remaining life of the Facility using the effective interest method. See Note 12, Credit Agreement , to the consolidated financial statements included under Item 8 of this Annual Report on Form 10-K, for a further description of the Credit Agreement.
See Note 12, Credit Agreement , to the consolidated financial statements included under Item 8 of this Annual Report on Form 10-K, for a further description of the Credit Agreement. Letters of Credit . At both June 30, 2025 and 2024 there were $4.0 million of standby letters of credit outstanding under the Facility. Uses of Liquidity Capital Expenditures.
SG&A expenses were down 9.2% while consolidated sales decreased 18.3%, which led to a decrease in operating leverage. Consolidated selling expenses were down 14.4% during fiscal 2024.
When expressed as a percentage of sales, SG&A expenses were 50.4%, an increase from 48.8% in the prior year primarily due to fixed cost deleveraging from lower delivered sales. SG&A expenses were down 1.7% while consolidated sales decreased 4.9%, which led to a decrease in operating leverage. Consolidated selling expenses were down 3.6% during fiscal 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAND SUBSIDIARIES A hypothetical 10% weaker United States dollar against all foreign currencies at June 30, 2024 would have had an immaterial impact on our consolidated results of operations and financial condition. We currently do not engage in any foreign currency hedging activity and we have no intention of doing so in the foreseeable future.
Biggest changeForeign exchange gains or losses resulting from market changes in the value of foreign currencies did not have a material impact during any of the fiscal periods presented. A hypothetical 10% weaker U.S. dollar against all foreign currencies at June 30, 2025 would have had an immaterial impact on our consolidated results of operations and financial condition.
Raw Materials and other Commodity Price Risk We are exposed to market risk from changes in the cost of raw materials used in our manufacturing processes, principally wood, fabric and foam products. The cost of foam products, which are petroleum-based, is sensitive to changes in the price of oil.
AND SUBSIDIARIES Raw Materials and other Commodity Price Risk We are exposed to market risk from changes in the cost of raw materials used in our manufacturing processes, principally wood, fabric and foam products. The cost of foam products, which are petroleum-based, is sensitive to changes in the price of oil.
We do not believe that the value or liquidity of our cash equivalents and investments have been materially impacted by current market events. Our available-for-sale securities are held for purposes other than trading and are not leveraged at June 30, 2024. We monitor our interest rate and credit risks and believe the overall credit quality of our portfolio is strong.
We do not believe that the value or liquidity of our cash equivalents and investments have been materially impacted by current market events. Our available-for-sale securities are held for purposes other than trading and are not leveraged at June 30, 2025. We monitor our interest rate and credit risks and believe the overall credit quality of our portfolio is strong.
While we had no fixed or variable rate borrowings outstanding at June 30, 2024, we could be exposed to market risk from changes in risk-free interest rates if we incur variable rate debt in the future as interest expense will fluctuate with changes in the Secured Overnight Financing Rate (“SOFR”).
While we had no fixed or variable rate borrowings outstanding at June 30, 2025, we could be exposed to market risk from changes in risk-free interest rates if we incur variable rate debt in the future as interest expense will fluctuate with changes in the Secured Overnight Financing Rate (“SOFR”).
Foreign Currency Exchange Risk Foreign currency exchange risk is primarily limited to our four Company-operated retail design centers located in Canada and our manufacturing plants in Mexico and Honduras, as substantially all purchases of imported parts and finished goods are denominated in U.S. dollars.
AND SUBSIDIARIES Foreign Currency Exchange Risk Foreign currency exchange risk is primarily limited to our retail design centers located in Canada and manufacturing plants in Mexico and Honduras, as substantially all purchases of imported parts and finished goods are denominated in U.S. dollars.
It is anticipated that the fair market value of our cash equivalents and investments will continue to be immaterially affected by fluctuations in interest rates.
It is anticipated that the fair market value of our cash equivalents and investments will continue to be immaterially affected by fluctuations in interest rates. 33 ETHAN ALLEN INTERIORS INC.
Commercial Real Estate Market Risk We have potential exposure to market risk related to conditions in the commercial real estate market. At June 30, 2024, there were 142 Company-operated retail design centers, of which 49 are owned and 93 leased.
Commercial Real Estate Market Risk We have exposure to market risk related to conditions in the commercial real estate market. At June 30, 2025, there were 142 Company-operated retail design centers, of which 48 are owned and 94 leased.
We are also exposed to risk with respect to transportation costs, including fuel prices, for delivering our products. As commodity prices and transportation costs rise, we determine whether a price increase to our customers to offset these costs is warranted.
We are also exposed to risk with respect to transportation costs, including shipping container and fuel prices, for delivering our products. Should commodity prices and transportation costs rise, we will determine whether a retail price increase to offset these costs is warranted.
We are also exposed to risk related to conditions in the commercial real estate rental market with respect to the right-of-use assets we carry on our balance sheet for leased design center and service center locations. At June 30, 2024, the unamortized balance of such right-of-use assets totaled $114.2 million.
We are also exposed to risk related to conditions in the commercial real estate rental market with respect to the right-of-use assets we carry on our balance sheet for leased properties. At June 30, 2025, the unamortized balance of such right-of-use assets totaled $109.2 million.
Cash and Cash Equivalents and Investments The fair market value of our cash and cash equivalents at June 30, 2024 was $69.7 million while our investments (both current and non-current) totaled $126.1 million. Our cash and cash equivalents consist of demand deposits and money market funds with original maturities of three months or less and are reported at fair value.
Cash and Cash Equivalents and Investments The fair market value of our cash and cash equivalents at June 30, 2025 was $76.2 million while our investments (current and non-current) totaled $120.0 million. Our cash and cash equivalents consist of demand deposits and money market funds with original maturities of three months or less and are reported at fair value.
During fiscal 2024, a period marked by ongoing high inflation, we have been able to reduce certain manufacturing input costs by identifying lower cost alternatives in raw materials as well as implemented operational efficiencies, including reduced headcount, which have helped to minimize the impact of high inflation.
We believe any material inflationary impact on our product and operating costs would be partially offset by our ability to increase retail selling prices. We have been able to reduce certain manufacturing input costs by identifying lower cost alternatives in raw materials as well as implemented operational efficiencies, including reduced headcount, which have helped to minimize the impact of inflation.
As these tariffs and duties increase, we determine whether a price increase to our customers to offset these costs is warranted. To the extent that an increase in these costs would have a material impact on our results of operations, we believe that our competitors would experience a similar impact.
To the extent that an increase in these operating costs would have a material impact on our results of operations, we believe that our competitors would experience a similar impact. For more information, see Item 1A. Risk Factors , under the heading of “Legal and Regulatory Risks”, of this Annual Report on Form 10-K. 34 ETHAN ALLEN INTERIORS INC.
Duties and Tariffs Market Risk We are exposed to market risk with respect to duties and tariffs assessed on raw materials, component parts, and finished goods we import. Additionally, we are exposed to duties and tariffs on our finished goods that we export from our manufacturing plants.
We are exposed to risk with respect to tariffs assessed on raw materials, component parts and finished goods we import into the U.S. We are also subject to risks relating to other changes affecting imports, as we manufacture components and finished goods in Mexico and Honduras.
Removed
Foreign exchange gains or losses resulting from market changes in the value of foreign currencies did not have a material impact during any of the fiscal periods presented. 35 ETHAN ALLEN INTERIORS INC.
Added
We currently do not engage in any foreign currency hedging activity and we have no intention of doing so in the foreseeable future. Duties and Tariffs Risk During fiscal 2025, the U.S. announced its intention and took actions to increase tariffs at various rates, including on certain products imported from many countries and individualized higher tariffs on certain other countries.
Removed
We believe any material inflationary impact on our product and operating costs would be partially offset by our ability to increase selling prices, create operational efficiencies and seek lower cost alternatives.
Added
Other countries have announced reciprocal tariffs or other similar actions. In some cases, these tariffs have since been followed by announcements of limited exemptions and temporary pauses. Given these events, there continues to be significant uncertainty about the future relationship between the U.S. and other countries regarding such trade policies, treaties and tariffs.
Added
Our upholstery products produced and exported out of our Mexican manufacturing facilities are compliant with the U.S.-Mexico-Canada Agreement, which reduces our exposure with Mexico.
Added
Our case goods products produced and exported out of our Honduras facility are subject to tariff, but are reduced based on the consumption of U.S. sourced raw material wood under the Central America-Dominican Republic Free Trade Agreement.
Added
With regards to our imported finished goods and select raw materials, our exposure is primarily concentrated on imported case goods from Indonesia, select fabrics from East Asia and imported home accent products, consisting mostly of lighting from China.
Added
Given the size of our imported business relative to the entire Company, the exposure to our cost of goods in fiscal 2025 was minimal. Additionally, we are exposed to tariffs on our finished goods that we export to Canada.
Added
Based on information currently available to us, the recent introduction of additional tariffs by the U.S. and reciprocal tariffs by other countries is expected to result in incremental costs for our imported raw materials and finished goods. These higher costs are expected to impact certain of our margins and could lead to an increase in our retail selling prices.
Added
As duties rise and new tariffs are enacted, we will continually evaluate whether a retail price increase to help offset these incremental costs is warranted. Additionally, we believe our North America manufacturing (which represents approximately 75% of the furniture we sell) provides us with a strategic advantage to mitigate the impact of higher tariffs.
Added
By controlling more aspects of the production process within North America, we believe we can mitigate some of our vulnerability to disruptions and cost increases associated with importing materials and finished goods from tariff-affected regions. We continue to work to determine our overall tariff cost exposure, the potential impact of retaliatory responses thereto, if any, and mitigation plans.
Added
Our inability to minimize the impact of tariffs on our raw material input costs, pass through price increases or find alternative sources for our raw materials, may have a material adverse impact on sales volume, earnings and liquidity. As such, we can make no assurances about the eventual impact on our consolidated operating results and business.

Other ETD 10-K year-over-year comparisons