Ethan Allen (ETD) Q3 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool

Thu, April 30, 2026 astatine 11:55 AM CDT 16 min read

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DATE

Wednesday, April 29, 2026 astatine 5 p.m. ET

CALL PARTICIPANTS

• Chairman, President, and CEO — M. Farooq Kathwari

• Executive Vice President, CFO, and Treasurer — Matthew McNulty

Full Conference Call Transcript

M. Kathwari: Thanks, Matt, and convey you each for participating successful our 3rd 4th fiscal results call. As we reported, contempt galore challenges, we performed reasonably well. We were chiefly impacted by a simplification of concern from our State Department contract, chiefly owed to authorities shutdown, little planetary income and to immoderate extent, sluggish request for location furnishings. Our written income successful North America were level compared to past year, portion our wholesale orders declined 7.6% from reduced, arsenic I mentioned, governments -- U.S. authorities income and slowdown successful our planetary business. Tariffs besides impacted our earnings, particularly the unexpected tariffs connected our Mexico manufacturing products.

The accrued tariffs during the 4th of astir $4 cardinal were chiefly -- were the main crushed of our reduced earnings. Matt volition present supply much information. And aft Matt, I volition reappraisal our initiatives. Matt?

Matthew McNulty: Thank you, Mr. Kathwari. Our 3rd 4th fiscal show was highlighted by beardown operating currency travel and a robust equilibrium expanse contempt operating successful a challenging macroeconomic environment. Our consolidated nett income of $136 cardinal benefited from a higher mean summons price, accrued clearance income and less returns. These increases were offset by little declaration sales, a diminution successful delivered portion measurement and inclement weather. Retail conception written orders were level versus past year, portion our Wholesale conception declined 7.6% owed to macroeconomic challenges, reduced authorities enactment and a slowdown successful our planetary business. Demand levels were choppy and the gait of written orders declined somewhat passim the quarter.

Our retail written trends were strongest successful July contempt adverse weather, which slowed postulation precocious successful the period and continued into February. There was a pullback successful request during March pursuing the Iran conflict, but we are excited for the instauration of respective caller products this outpouring and judge they volition complement the existent location furnishings Ethan Allen has to offer. We ended the 4th with wholesale backlog of $42 million, down 23% from a twelvemonth ago. Lower U.S. State Department and planetary business, combined with improved lawsuit pb times helped trim our wholesale backlog.

Our consolidated gross borderline of 59.4% was impacted by incremental tariffs, delivering retired orders with accrued promotional enactment and higher clearance sales, partially offset by a alteration successful income mix, little inbound freight, reduced headcount and a higher mean ticket. Our adjusted operating income was $6.8 cardinal with an operating borderline of 5%. Lower operating borderline was driven by higher tariffs, incremental integer and exertion spend, less U.S. authorities income and delivering retired orders with higher promotions. Disciplined spending, outgo power initiatives and little headcount helped to thrust SG&A expenses down 3% and offset further investments we are making successful our business.