ETD Stock Forecast & Price Target

Ethan Allen Interiors is showing signs of resilience, as evidenced by a gross margin expansion of approximately 55 basis points year-over-year to 61.4%, despite facing challenges in its contract business and rising costs. The company's fourth quarter performance marked an improvement from a disappointing prior quarter, with earnings per share of $0.49 exceeding expectations, alongside operational improvements signaled by a projected operating margin expansion of 110 basis points to 9.2%. Additionally, while sales are currently down 5%, the anticipated sales growth of 1.0% indicates a potential rebound and reflects a positive trend in order intake as customer demand at showrooms is on the rise.

Ethan Allen Interiors Inc. has experienced a significant decline in its operating margin, dropping approximately 434 basis points year-over-year to 7.2%, primarily due to a substantial increase in selling, general, and administrative expenses. The company's sales continue to face challenges, evidenced by an 11% year-over-year drop in foot traffic to its design galleries and a decrease in orders throughout the quarter. Moreover, despite promotional efforts to boost demand, the volatility in month-to-month performance and anticipated pressures on profitability from tariffs and lower revenues cast a negative outlook on the company's financial health.