Ethan Allen Interiors Inc (ETD)
Profitability ratios
Return on sales
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 60.54% | 60.82% | 60.70% | 59.27% | 57.37% |
| Operating profit margin | 10.14% | 12.07% | 17.34% | 16.91% | 11.28% |
| Pretax margin | 11.23% | 13.22% | 17.82% | 16.89% | 11.15% |
| Net profit margin | 8.39% | 9.88% | 13.37% | 12.63% | 8.76% |
The profitability ratios of Ethan Allen Interiors Inc. over the fiscal years from June 30, 2021, to June 30, 2025, indicate a pattern of gradual improvement followed by some fluctuations.
The Gross Profit Margin exhibited a steady increase, rising from 57.37% in 2021 to 60.70% in 2023. The margin further marginally improved to 60.82% in 2024 before experiencing a slight decline to 60.54% in 2025. This trend suggests the company has been able to enhance its cost of goods sold management or increase product pricing power over the period, leading to improved gross profitability.
The Operating Profit Margin showed more variability. It increased significantly from 11.28% in 2021 to 16.91% in 2022 and further to 17.34% in 2023, reflecting improved operational efficiency and cost control. However, in 2024, this margin decreased to 12.07%, and further declined to 10.14% in 2025. These fluctuations may indicate challenges in controlling operating expenses or increased competition impacting operational profitability in recent periods.
The Pretax Margin followed a trend similar to the operating margin, improving from 11.15% in 2021 to 17.82% in 2023, then decreasing to 13.22% in 2024 and further to 11.23% in 2025. This pattern reinforces the notion of a recent decline in overall profit efficiency before taxes, possibly due to increased expenses or lower revenue growth.
The Net Profit Margin increased from 8.76% in 2021 to a peak of 13.37% in 2023. However, it decreased to 9.88% in 2024 and further to 8.39% in 2025. Although still higher than the 2021 level, the downward trend in recent years suggests narrowing net profitability margins, which could be attributed to higher interest expenses, taxes, or other non-operating costs.
In summary, Ethan Allen Interiors Inc. demonstrated a period of robust margin improvements leading up to 2023, driven primarily by gains in gross and operating profits. Nevertheless, the subsequent decline in margins from 2024 onward indicates that the company may be facing margin pressure, potentially from rising costs or competitive market conditions, affecting overall profitability in recent years.
Return on investment
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.46% | 10.47% | 18.40% | 19.20% | 11.31% |
| Return on assets (ROA) | 7.00% | 8.57% | 14.19% | 14.35% | 8.78% |
| Return on total capital | 0.00% | 16.13% | 28.34% | 33.96% | 21.99% |
| Return on equity (ROE) | 10.70% | 13.21% | 22.46% | 25.35% | 17.07% |
The analysis of Ethan Allen Interiors Inc.'s profitability ratios over the period from June 30, 2021, to June 30, 2025, reveals notable fluctuations and underlying trends.
The Operating Return on Assets (Operating ROA) exhibited significant growth from 11.31% in 2021 to a peak of 19.20% in 2022, indicating improved efficiency in generating operating income from assets during this period. However, this ratio declined to 18.40% in 2023, followed by a substantial decrease to 10.47% in 2024 and further down to 8.46% in 2025. This downward trend suggests a diminishing ability to derive operating income from the company's asset base in recent years.
The Return on Assets (ROA), which incorporates net income relative to total assets, followed a similar trajectory. It increased markedly from 8.78% in 2021 to 14.35% in 2022, then slightly declined to 14.19% in 2023, and subsequently fell to 8.57% in 2024 and further to 7.00% in 2025. The pattern indicates that the company's overall efficiency in converting assets into profits has waned in the latter years, aligning with the decline observed in operating profitability.
Return on Total Capital showed a different pattern, peaking at 33.96% in 2022, up from 21.99% in 2021. After the peak, it declined to 28.34% in 2023 and then experienced a sharp decrease to 16.13% in 2024. By 2025, the ratio remarkably declined to 0.00%, indicating a potential lack of profitability or possible accounting adjustments affecting the measure. This trend underscores a significant deterioration in the company's capacity to generate returns on all invested capital.
Return on Equity (ROE) demonstrated a consistent decline over the period, from 17.07% in 2021 to 25.35% in 2022, then decreasing to 22.46% in 2023, and continuing downward to 13.21% in 2024, with a further reduction to 10.70% in 2025. This consistent decline in ROE reflects decreasing profitability attributable to shareholders, possibly driven by factors such as reduced net income, increased equity base, or both.
Overall, the profitability ratios collectively indicate that while Ethan Allen Interiors experienced a period of strong profitability and operational efficiency in 2022, recent years have seen a substantial decline in profitability metrics across operating income, asset utilization, and shareholder returns. The sharp decrease in return on total capital and ROE signals potential challenges in maintaining previous profit levels, which may warrant further investigation into underlying causes such as market dynamics, cost structures, or strategic shifts.