Ethan Allen reported consolidated net sales of $149.9 million for the fiscal 2026 second quarter ended December 31, 2025, compared with $157.3 million in the year-ago period. Gross margin improved to 60.9% from 60.3% a year earlier, driving adjusted operating income of $13.5 million and an adjusted operating margin of 9.0%. Adjusted diluted earnings per share were $0.44, surpassing last year’s $0.59 prior-year result when adjusted, and beating the consensus estimate of $0.38 per share. These results reflect disciplined cost control, production efficiencies at North American facilities and targeted marketing investments that increased 25.2% to $4.9 million, representing 3.2% of net sales.

At quarter-end the company held $179.3 million in cash and investments, following payment of $10.0 million in regular quarterly dividends and $2.9 million in capital expenditures. Operating cash flow for the quarter totaled $15.0 million. Inventories remained essentially flat at $141.9 million, while customer deposits from undelivered orders were $63.6 million. There was no outstanding debt on the balance sheet. The board approved a regular quarterly dividend of $0.39 per share, payable February 25, 2026.

Written orders in the retail segment declined 17.9% versus the prior year comparable quarter, while wholesale orders decreased 19.3%. Retail net sales held steady at $134.3 million year-over-year, whereas wholesale net sales fell to $79.1 million from $86.8 million. The wholesale backlog rose 2.0% to $49.8 million over the first half of the fiscal year due to timing of contract order fulfillment. Headcount ended at 3,149 associates, down 5.1% from a year ago, driving ongoing productivity gains.

Ethan Allen operates 172 retail design centers across North America, including 142 company-operated and 30 independently owned locations, with recent facility upgrades such as the new San Diego center. The company manufactures approximately 75% of its custom furniture in North America, leveraging vertical integration in manufacturing, logistics and design services. Sustainability efforts earned a “High Score” on the Wood Furniture Scorecard and Great Place to Work® certification for the Silao, Mexico upholstery operation. Management remains cautiously optimistic for fiscal 2026, highlighting product innovation, digital enhancements and a strong capital return program as pillars for future growth.