ETD Stock Forecast & Price Target

Ethan Allen Interiors Inc. has demonstrated resilient performance with a gross margin expansion of approximately 55 basis points year-over-year, reaching 61.4%, reflecting ongoing improvements in demand within its showrooms and the success of its marketing efforts to boost traffic to design centers. While facing challenges in its contract business and rising product costs, the company reported a fourth-quarter improvement, highlighted by an earnings per share (EPS) of $0.49, which exceeded both TAG and FactSet consensus estimates by $0.04. Furthermore, the anticipated sales growth of 1.0% and an operating margin expansion of 110 basis points to 9.2% signal a positive trajectory for the company, indicating potential for recovery and strengthened financial performance going forward.

Ethan Allen Interiors Inc. is experiencing a significant decline in operating margin, which fell approximately 434 basis points year-over-year to 7.2%, primarily due to a deleverage in the selling, general and administrative (SG&A) ratio. The company anticipates further contraction in profitability, projecting a year-over-year decrease of 225 basis points in operating margin to 9.3% amid ongoing traffic declines to its design galleries, which have dropped 11% year-over-year. Moreover, despite recent promotional efforts leading to increased demand, the overall volatile sales trends and anticipated pressures from tariffs coupled with lower year-over-year revenues suggest continued negative implications for the company's financial outlook.