Ethan Allen Interiors Inc (ETD)
Return on equity (ROE)
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 51,596 | 63,816 | 105,807 | 103,280 | 60,005 |
| Total stockholders’ equity | US$ in thousands | 482,355 | 482,980 | 471,028 | 407,349 | 351,443 |
| ROE | 10.70% | 13.21% | 22.46% | 25.35% | 17.07% |
June 30, 2025 calculation
ROE = Net income ÷ Total stockholders’ equity
= $51,596K ÷ $482,355K
= 10.70%
The analysis of Ethan Allen Interiors Inc's return on equity (ROE) over the period from June 30, 2021, to June 30, 2025, reveals notable trends and shifts in the company's profitability relative to shareholders' equity.
In 2021, the company's ROE stood at 17.07%, indicating a moderate level of profitability and efficient use of equity capital at that time. Moving into 2022, ROE experienced a significant increase to 25.35%, reflecting an improvement in profitability, possibly driven by higher net income margins, better asset utilization, or strategic operational enhancements. This uptick suggests that the company was generating greater profit relative to shareholders' equity during this period.
However, the ROE in 2023 saw a decline to 22.46%, though still higher than the 2021 figure, indicating a relative moderation in profitability gains. Although this represents a decrease from the prior year, the company continued to maintain a robust level of return on equity. The downturn may reflect rising costs, margin pressures, or changes in asset efficiency, warranting further analysis of underlying factors.
The downward trend persisted into 2024, with ROE decreasing markedly to 13.21%. This significant reduction suggests a deterioration in the company's ability to generate profits on shareholders' equity, potentially due to increased expenses, lower net income, or capital management shifts. The decline continued into 2025, with ROE reaching 10.70%, approaching levels indicative of more modest profitability margins and potentially signaling concern regarding sustainable returns.
Overall, the trend from 2021 to 2025 exhibits an initial period of strong profitability in 2022, followed by a consistent decline over subsequent years. This pattern warrants ongoing review of the company's operational efficiencies, cost structures, and strategic initiatives to understand the underlying causes driving these changes in ROE.
Peer comparison
Jun 30, 2025