ETD Stock Forecast & Price Target

Ethan Allen Interiors has demonstrated resilience with an improvement in gross margin, expanding by approximately 55 basis points year-over-year to reach 61.4%, despite facing challenges in its contract business. The company's fourth quarter fiscal 2025 results showed a notable rebound from a disappointing third quarter, with earnings per share of $0.49 surpassing consensus estimates by $0.04, indicating better-than-expected order intake. Additionally, a projected operating margin expansion of 110 basis points to 9.2% further underscores the company's strong operational performance and ability to adapt in a competitive home furnishings market.

Ethan Allen Interiors Inc has experienced a significant decline in its operating margin, which has dropped approximately 434 basis points year-over-year to 7.2%, primarily due to a deleverage in selling, general, and administrative (SG&A) expenses. Additionally, the company anticipates a further contraction in the operating margin by 225 basis points year-over-year to 9.3%, alongside a reduction in gross margin by 75 basis points to 60.1%, attributed to decreased traffic and demand at its design galleries, which was reported to be down 11% year-over-year. The fluctuating demand, evidenced by inconsistent monthly orders and reliance on heavy promotions to stimulate sales, along with external pressures such as tariffs, suggests an unfavorable outlook for profitability and revenue growth moving forward.