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Farooq Kathwari, Chairman, President, and CEO of Ethan Allen Interiors Inc . (NYSE:ETD), recently sold shares of the company in a series of transactions. According to a Form 4 filing with the Securities and Exchange Commission, Kathwari disposed of a total of 10,700 shares on February 18, 2025, at a price of $29.27 per share, amounting to a total transaction value of $313,189. The furniture retailer, currently trading at $29.28, boasts impressive gross profit margins of 60.8% and offers a substantial 6.69% dividend yield. InvestingPro analysis suggests the stock is currently undervalued, with multiple positive indicators including strong financial health and 30 consecutive years of dividend payments.
The sales were part of a pre-established Rule 10b5-1 trading plan, which was adopted on March 14, 2024, and became effective on June 17, 2024. This plan had been previously disclosed in the company’s quarterly report filed on April 24, 2024. Additionally, on the same day, 8,000 shares were sold by the Irfan Kathwari Foundation, which Kathwari is deemed to beneficially own, although he has no reportable pecuniary interest in these shares. The company maintains a healthy P/E ratio of 12.23, reflecting its solid market position.
Following these transactions, Kathwari retains direct ownership of 1,641,905 shares, with additional holdings through indirect ownership, including shares held by family members and trusts. For a deeper understanding of ETD’s valuation and financial metrics, investors can access comprehensive analysis through InvestingPro, which offers detailed insights into the company’s financial health and growth prospects.
In other recent news, Ethan Allen Interiors Inc. reported a sequential acceleration in orders, despite a miss on quarterly revenue and earnings expectations. The company’s second quarter consolidated net sales were $157.3 million, a decrease from $167.3 million in the same quarter the previous year. Furthermore, diluted earnings per share (EPS) came in at $0.59, a drop from the prior year’s $0.68. Despite these figures, Ethan Allen’s retail segment written orders increased by 15.8%, and wholesale segment written orders rose by 14.3%.
Analyst Bradley Thomas from Keybanc noted the company’s strong written order trends, attributing the performance to a December promotion, new product offerings, and improved conversion rates. Ethan Allen’s CEO, Farooq Kathwari, also highlighted the company’s manufacturing capabilities, with approximately 75% of its furniture produced in its North American facilities.
Despite the downturn in net sales and EPS, Ethan Allen ended the quarter with a strong balance sheet, boasting total cash and investments of $184.2 million, an increase from the year prior. The company also paid $10.0 million in cash dividends during the quarter and announced a regular quarterly cash dividend of $0.39 per share. These recent developments suggest that investors are focusing on the company’s recovery prospects in housing and home-related spending projected for the years 2025-2027.
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