ETD Stock Forecast & Price Target

Ethan Allen Interiors Inc has demonstrated a notable 55 basis point year-over-year expansion in gross margin, reaching 61.4%, indicating improved profitability despite challenges in its contract business and rising costs. The fourth quarter of fiscal year 2025 reflected better-than-expected performance, with earnings per share of $0.49 surpassing consensus estimates by $0.04, and an anticipated sales growth of 1.0%. Furthermore, the company is projected to achieve an operating margin expansion of 110 basis points to 9.2%, signaling a recovery trend following a weaker previous quarter.

Ethan Allen Interiors Inc has experienced a significant decline in operating margins, decreasing approximately 434 basis points year-over-year to 7.2%, primarily due to a rise in selling, general, and administrative expenses. The company anticipates a further contraction in profit margins, with expectations of a 225 basis points decline to 9.3% year-over-year driven by reduced sales and ongoing challenges in traffic to design galleries, which decreased by 11% year-over-year. Additionally, despite targeted promotions that temporarily increased demand, the volatility in monthly sales trends and anticipated pressures from tariffs are expected to negatively impact profitability and revenue growth in the near term.