ETD Stock Forecast & Price Target

Ethan Allen Interiors Inc. has shown multiple positive indicators in its financial performance, highlighted by an expansion in gross margin to 61.4%, despite challenges in the contract business and rising costs. The company's improvement in the fourth quarter of fiscal year 2025, with earnings per share of $0.49 exceeding consensus estimates, demonstrates resilience in its operating model. Additionally, projected sales growth of 1.0%, coupled with an anticipated operating margin expansion of 110 basis points to 9.2%, reinforces a favorable outlook for the company moving forward.

Ethan Allen Interiors Inc. has reported a significant decline in its operating margin, decreasing approximately 434 basis points year-over-year to 7.2%, primarily attributed to increased selling, general and administrative expenses. The company anticipates a continued downward trend in its operating margin, projected to decline by 225 basis points year-over-year to 9.3%, alongside a contraction in gross margin of 75 basis points to 60.1%. Additionally, the company's sales show concerning trends, including an 11% year-over-year decline in traffic to design galleries and a volatile order pattern, indicating potential ongoing pressures on profitability and revenue amidst competitive marketing challenges and external factors such as tariffs.