ETD Stock Forecast & Price Target

Ethan Allen Interiors Inc. is experiencing an expansion in its gross margin, which improved by approximately 55 basis points year-over-year to 61.4%, indicating a positive trend in profitability. The company reported an operating margin expansion of 110 basis points to 9.2%, driven by a sales growth of 4.6%, reflecting improving demand at its showrooms despite challenges in the contract business. Additionally, strategic measures such as a 5% price increase to offset rising tariff costs and enhanced marketing investments signal a proactive approach to driving future growth and maintaining competitive positioning in the home furnishings market.

Ethan Allen Interiors Inc. has experienced a significant decline in its operating margin, falling approximately 434 basis points year-over-year to 7.2%, attributed to a deleverage in selling, general, and administrative expenses. The company has also faced decreased traffic to its design centers, with footfall down 11% in 2QF26, compounded by an 18% year-over-year drop in retail written orders. Despite managing gross margin effectively, the overall sales contraction, projected at a decline of 4.5% for FY26, indicates ongoing challenges within its wholesale segment and a softer demand outlook for the latter half of the fiscal year.