
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q




(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

For the quarterly period ended      March 31, 2001
                               --------------------------

                                          OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

For the transition period from                      to
                               -------------------------------------------------

Commission File Number:                          1-11692
                        --------------------------------------------------------


                           Ethan Allen Interiors Inc.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


Delaware                                                           06-1275288
--------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)       (I.R.S.
                                                                Employer ID No.)


                  Ethan Allen Drive, Danbury, Connecticut 06811
--------------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (203) 743-8000
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


                                       N/A
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.[X] Yes [ ]No


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. [ ] Yes [ ]No


                     APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                          39,397,273 at March 31, 2001

<PAGE>


                           ETHAN ALLEN INTERIORS INC.
                                 AND SUBSIDIARY
                                      INDEX

                                                                           PAGE


Part I.  Financial Information:

     Item 1. Consolidated Financial Statements as of
                March 31, 2001 (unaudited) and June 30,
                2000 and for the three and nine months
                ended March 31, 2001 and 2000 (unaudited)

                Consolidated Balance Sheets                                 2
                Consolidated Statements of Operations                       3
                Consolidated Statements of Cash Flows                       4
                Consolidated Statements of Shareholders'
                   Equity                                                   5
                Notes to Consolidated Financial
                   Statements                                               6

      Item 2. Management's Discussion and Analysis of Financial
                Condition of Operations                                    10

      Item 3. Quantitative and Qualitative Disclosures
                about Market Risk                                          15



Part II. Other Information:                                                16

     Item 1.  Legal Proceedings
     Item 2.  Changes in Securities and Use of Proceeds
     Item 3.  Defaults Upon Senior Securities
     Item 4.  Submission of Matters to a Vote of Security Holders
     Item 5.  Other Information
     Item 6.  Exhibits and Reports on Form 8-K

Signatures                                                                 17



<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
                           Consolidated Balance Sheets
                             (Dollars in thousands)


                                                      March 31,
                                                        2001          June 30,
                                                     (unaudited)        2000
                                                     -----------      --------
ASSETS

Current assets:
   Cash and cash equivalents                          $  37,557     $  14,024
   Accounts receivable, less allowances of $2,828
      and $2,751 at March 31, 2001 and
      June 30, 2000, respectively                        37,276        34,336
   Inventories                                          169,640       159,006
   Prepaid expenses and other current assets             20,983       17, 670
   Deferred income taxes                                 12,049        10,751
                                                      ---------     ---------
       Total current assets                             277,505       235,787
Property, plant and equipment, net                      271,138       247,738
Intangibles, net                                         53,211        54,770
Other assets                                              7,882         5,276
                                                      ---------     ---------
       Total assets                                   $ 609,736     $ 543,571
                                                      =========     =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Current maturities of long-term debt and
      capital lease obligations                       $     232     $   8,420
   Accounts payable                                      76,210        65,879
   Accrued expenses                                      12,723        11,003
   Accrued compensation and benefits                     25,037        22,966
                                                      ---------     ---------
       Total current liabilities                        114,202       108,268

Long-term debt                                            9,389         9,487
Other long-term liabilities                               2,031         1,593
Deferred income taxes                                    33,542        33,714
                                                      ---------     ---------
       Total liabilities                                159,164       153,062
                                                      ---------     ---------
Shareholders' equity:
Class A common stock, par value $.01, 150,000,000
   shares authorized, 45,120,130 and 45,081,384
   shares issued at March 31, 2001 and
   June 30, 2000, respectively                              451           451
Preferred stock, par value $.01, 1,055,000 shares
   authorized, no shares issued and outstanding
   at March 31, 2001 and June 30, 2000                     --            --
Additional paid-in capital                              274,261       272,710
                                                      ---------     ---------
                                                        274,712       273,161
Less: Treasury stock (at cost), 5,722,859 shares
   at March 31, 2001 and 5,674,278 shares at
   June 30, 2000                                      (129,ll8)      (128,493)
                                                      ---------     ---------
                                                        145,594       144,668
Retained earnings                                       304,978       245,841
                                                      ---------     ---------
      Total shareholders' equity                        450,572       390,509
                                                      ---------     ---------
      Total liabilities and shareholders' equity      $ 609,736     $ 543,571
                                                      =========     =========


          See accompanying notes to consolidated financial statements.




                                       -2-
<PAGE>



                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
                      Consolidated Statements of Operations
                                   (Unaudited)
                  (Amounts in thousands, except per share data)


<TABLE>
<CAPTION>
                                              Three Months               Nine Months
                                             Ended March 31,           Ended March 31,
                                          2001         2000         2001          2000
                                         --------     --------     --------     --------

<S>                                      <C>          <C>          <C>          <C>
Net sales                                $233,791     $220,300     $677,689     $627,378
Cost of sales                             130,280      117,152      366,732      331,810
                                         --------     --------     --------     --------
       Gross profit                       103,511      103,148      310,957      295,568

Operating expenses:
Selling                                    42,026       37,197      121,618      107,246
General and administrative                 30,292       27,586       87,973       78,732
                                         --------     --------     --------     --------
    Operating income                       31,193       38,365     101, 366      109,590
                                         --------     --------     --------     --------
Interest and other miscellaneous
   income, net                              1,188           13       1, 829          328
Interest and other related financing
   costs                                      178          392          563          978
                                         --------     --------     --------     --------
    Income before income taxes             32,203       37,986      102,632      108,940
Income tax expense                         12,173       14,815       38,795       42,203
                                         --------     --------     --------     --------
       Net income                        $ 2O,O30     $ 23,171     $ 63,837     $ 66,737
                                         ========     ========     ========     ========

Per share data:
--------------

Basic earnings per common share:

    Net income per basic share           $   0.51     $   0.58     $   1.62     $   1.65
                                         ========     ========     ========     ========
    Basic weighted average common
     shares outstanding                   39, 397      39, 998      39, 386       40,562

Diluted earnings per common share:

    Net income per diluted share         $   0.50     $   0.57     $   1.59     $   1.61
                                         ========     ========     ========     ========
    Diluted weighted average common
       shares outstanding                  40,442       40,755       40,267       41,523
</TABLE>


          See accompanying notes to consolidated financial statements.


                                      -3-

<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                             (Dollars in thousands)


                                                             Nine Months
                                                           Ended March 31,
                                                         2001          2000
                                                       --------      --------
Operating activities:
    Net income                                         $ 63,837      $ 66,737
    Adjustments to reconcile net income to
       net cash provided by operating activities:
         Depreciation and amortization                   14,710        12,616
         Compensation expense related to
               restricted stock award                       324           641
         Provision for deferred income taxes             (1,470)       (1,537)
         Other non-cash (income) expense                 (1,621)         (553)
         Change in assets and liabilities, net of
            the effects from acquired and divested
            businesses:
               Accounts receivable                       (2,936)          370
               Inventories                              (11,814)      (10,401)
               Prepaid and other current assets          (4,441)       (4,661)
               Accounts payable                          11,311        14,016
               Accrued expenses                           3,664         4,056
               Other                                     (1,138)         (362)
                                                       --------      --------
Net cash provided by operating activities                70,426        80,922
                                                       --------      --------

Investing activities:
    Proceeds from the disposal of property, plant
       and equipment                                      6,965         1,096
    Capital expenditures                                (40,880)      (31,922)
    Acquisition of retail businesses                       (291)       (9,886)
    Other                                                   329           627
                                                       --------      --------
Net cash used in investing activities                   (33,877)      (40,085)
                                                       --------      --------

Financing activities:
    Borrowings on revolving credit facilities             1,500        66,000
    Payments on revolving credit facilities              (9,500)      (50,000)
    Other payments on long-term debt and
       capital leases                                      (287)         (701)
    Increase in deferred financing costs                   --            (507)
    Net proceeds from issuance of common stock              603         2,123
    Dividends paid                                       (4,707)       (4,894)
    Payments to acquire treasury stock                     (625)      (45,736)
                                                       --------      --------

Net cash used in financing activities                   (13,016)      (33,715)
                                                       --------      --------

Net increase in cash and cash equivalents                23,533         7,122
Cash and cash equivalents at beginning of period         14,024         8,968
                                                       --------      --------
Cash and cash equivalents at end of period             $ 37,557      $ 16,090
                                                       ========      ========



          See accompanying notes to consolidated financial statements.


                                       -4-
<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
                 Consolidated Statements of Shareholders' Equity
                        Nine Months Ended March 31, 2001
                                   (Unaudited)
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                      Additional
                                         Common       Paid-in        Treasury      Retained
                                          Stock       Capital         Stock        Earnings      Total
                                         ------       ----------     --------      --------      -----


<S>                                     <C>           <C>           <C>            <C>          <C>
Balance at June 30, 2000                $   451       $272,710      $(128,493)      $245,841    $390,509
   Issuance of common stock upon
      exercise of stock options
      and restricted stock award
      compensation                          --             927             --             --         927
   Purchase of treasury shares
      relating to employee benefit
      and compensation plans                --              --           (625)            --        (625)
   Tax benefit associated with the
      exercise of employee options
      and warrants                          --             624             --             --         624
   Dividends declared on common             --              --             --         (4,700)     (4,700)
      stock
   Net income                               --              --             --         63,837      63,837
                                        ------        --------      ---------       --------    --------
Balance at March 31, 2001               $  451        $274,261      $(129,118)      $304,978    $450,572
                                        ======        ========      =========       ========    ========
</TABLE>


          See accompanying notes to consolidated financial statements.




                                       -5-
<PAGE>



                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
                   Notes to Consolidated Financial Statements
                                   (Unaudited)


(1)  BASIS OF PRESENTATION

     Ethan  Allen  Interiors  Inc.  (the  "Company")  is a Delaware  corporation
     incorporated on May 25, 1989. The consolidated financial statements include
     the  accounts of the Company and its  wholly-owned  subsidiary  Ethan Allen
     Inc. ("Ethan Allen") and Ethan Allen's  subsidiaries.  All of Ethan Allen's
     capital  stock is owned by the Company.  The Company has no other assets or
     operating  results other than those associated with its investment in Ethan
     Allen.


(2)  INTERIM FINANCIAL PRESENTATION

     All significant intercompany accounts and transactions have been eliminated
     in the consolidated  financial  statements.  In the opinion of the Company,
     all adjustments, consisting only of normal recurring accruals necessary for
     fair  presentation,  have been  included in the financial  statements.  The
     results of  operations  for the three and nine months ended March 31, 2001,
     are not  necessarily  indicative  of  results  for the fiscal  year.  It is
     suggested that the interim  consolidated  financial  statements are read in
     conjunction with the consolidated  financial  statements and notes included
     in the  Company's  Annual  Report on Form 10-K for the year  ended June 30,
     2000.

     Certain   reclassifications   have  been  made  to  prior  year   financial
     information in order to conform to the current year's  presentation.  These
     changes were made for  disclosure  purposes only and did not have an impact
     on previously reported results of operations or shareholders' equity.


(3)  NEW ACCOUNTING STANDARDS

     In 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
     Financial   Accounting   Standards   ("SFAS")  No.  133,   "Accounting  for
     Derivatives and Hedging Activities" and in 2000, SFAS No. 138,  "Accounting
     for Certain  Derivative  Instruments  and Certain  Hedging  Activities,  an
     amendment  of No.  133."  These  statements  require  that  all  derivative
     instruments be recognized on the balance sheet at fair value effective July
     1, 2000.  Derivatives  that are not hedges should be adjusted to fair value
     through  earnings.  For derivatives that are effective  hedges,  changes in
     fair  value  of  the   derivative   should  be  recorded  in  either  other
     comprehensive income or earnings. The ineffective portion of the derivative
     classified  as a hedge will be  immediately  recognized  in  earnings.  The
     Company  adopted these  standards as required  beginning July 1, 2000. Upon
     review of the  Company's  current  contracts,  it was  determined  that the
     Company has no derivative instruments as defined under these standards.


(4) INVENTORIES

    Inventories at March 31, 2001 and June 30, 2000 are summarized as follows:
    (dollars in thousands):

                                   March 31,    June 30,
                                     2001         2000
                                   --------    ---------
               Finished goods      $103,203     $103,787
               Work in process       21,574       19,233
               Raw materials         44,863       35,986
                                   --------     --------
                                   $169,640     $159,006
                                   ========     ========



                                        -6-


<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

(5)  CONTINGENCIES

     The Company has been named as a Potentially  Responsible  Party ("PRP") for
     the cleanup of two sites currently  listed on the National  Priorities List
     ("NPL") under the Comprehensive  Environmental  Response,  Compensation and
     Liability  Act of 1980  ("CERCLA"),  which the  Company  may be  subject to
     future costs and/or  liabilities.  With respect to both of these sites, the
     Company  believes  it is not a major  contributor  based on the very  small
     volume of waste generated by the Company in relation to total volume at the
     sites; however, liability under CERCLA may be joint and several. For one of
     the  sites,  the SRSNE  Superfund  Site in  Southington,  Connecticut,  the
     remedial   investigation   is  ongoing.   A   volume-based   allocation  of
     responsibility  among the parties has been  prepared,  which includes other
     parties  identified  as PRP's at this site.  The Company is also a settling
     defendant and is  responsible,  in part,  for funding  remedial  design and
     construction   activities  at  the  Parker   Landfill   Superfund  Site  in
     Lyndonville,  Vermont.  Over  ninety-five  percent of these activities have
     been  successfully  completed.  The Company believes that the resolution of
     these matters will not,  either  individually  or in the aggregate,  have a
     material adverse effect on its financial  condition,  results of operations
     or cash flows.


(6)  EARNINGS PER SHARE

     Basic and diluted  earnings per share are  calculated  using the  following
     share data (amounts in thousands):


                                    Three Months Ended      Nine Months Ended
                                         March 31,              March 31,
                                     2001        2000       2001       2000
                                     -----       ----       ----       ----
    Weighted average common
       shares outstanding for
       basic calculation             39,397     39,998     39,386     40,562
    Add: Effect of stock options
       and warrants                   1,045        757        881        961
                                     ------     ------     ------     ------
    Weighted average common
       shares outstanding for
       diluted calculation           40,442     40,755     40,267     41,523
                                     ======     ======     ======     ======


     As of March 31, 2000,  stock options to purchase  998,950  shares of common
     stock had an exercise  price in excess of the average  market price.  These
     options have been excluded from the diluted earnings per share  calculation
     since their effect is anti-dilutive.


(7)  SEGMENT INFORMATION

     The Company's  reportable  segments are strategic  business  areas that are
     managed separately and offer different products and services. The Company's
     operations are classified into two main segments: wholesale and retail home
     furnishings. The wholesale home furnishings segment is principally involved
     in the manufacture,  sale and distribution of home furnishing products to a
     network of  independently-owned  and Ethan  Allen-owned  stores.  Wholesale
     profitability  includes  the  wholesale  gross  margin,  which is earned on
     wholesale sales to all retail stores, including Ethan Allen-owned stores.

     The retail home furnishings  segment sells home furnishing products through
     a network of Ethan Allen-owned stores.  Retail  profitability  includes the
     retail gross margin,  which is earned based on purchases from the wholesale
     segment.


                                       -7-
<PAGE>

                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
                    Notes to Consolidated Financial Statement
                                   (Unaudited)


(7)  Segment Information (continued)

     The operating  segments  follow the same accounting  policies.  The Company
     evaluates  performance of the  respective  segments based upon revenues and
     operating  income.   Inter-company   eliminations  primarily  comprise  the
     wholesale  sales and  profit  on the  transfer  of  inventory  between  the
     wholesale  and retail  segments.  Inter-company  eliminations  also include
     items not allocated to reportable segments.

     During the third quarter of 2001,  the Company  re-evaluated  its operating
     segments and as a result  changed its  reporting  format from five segments
     (Case  Goods,  Upholstery,  Home  Accessories,  Retail  and  Other)  to two
     segments  (Wholesale  and  Retail).  This change  reflects  how  management
     currently manages its operations,  resulting in part from the growth of the
     Company's retail business. The following table presents segment information
     for the three and nine months  ended  March 31,  2001 and 2000  (dollars in
     thousands):

<TABLE>
<CAPTION>
                                       Three Months Ended          Nine Months Ended
                                           March 31,                   March 31,
                                       2001         2000           2001           2000
                                       ----         ----           ----           ----

NET SALES:
---------
<S>                                <C>            <C>            <C>            <C>
Wholesale                          $ 188,887      $ 185,761      $ 530,220      $ 509,909
Retail                               104,333                     92,222311,592    270,174
Elimination of inter-company
sales                                (59,429)       (57,683)      (164,123)      (152,705)
                                   ---------      ---------      ---------      ---------
   Consolidated Total              $ 233,791      $ 220,300      $ 677,689      $ 627,378
                                   =========      =========      =========      =========

OPERATING INCOME:
----------------
Wholesale                          $  26,881      $  36,813      $  81,271      $  98,546
Retail                                 5,419          4,947         18,057         14,564
Elimination (1)                       (1,107)        (3,395)         2,038         (3,520)
                                   ---------      ---------      ---------      ---------
   Consolidated Total              $  31,193      $  38,365      $ 101,366      $ 109,590
                                   =========      =========      =========      =========

CAPITAL EXPENDITURES:
--------------------
Wholesale (2)                      $   5,362      $   5,106      $  26,420         17,118
Retail                                 4,498         14,575         14,460         14,804
Acquisition of retail
   businesses                             12              -            291          9,886
                                   ---------      ---------      ---------      ---------
     Consolidated Total            $   9,872      $   9,681      $  41,171      $  41,808
                                   =========      =========      =========      =========

TOTAL ASSETS:
------------

Wholesale                          $ 450,263      $ 392,313
Retail                               184,266        169,049
Inventory profit
   elimination (3)                   (24,793)       (26,308)
                                   ---------      ---------
        Consolidated Total         $ 609,736      $ 535,O54
                                   =========      =========
</TABLE>

(1) The elimination in operating income includes the elimination for retail
    profit in ending inventory.

(2) Wholesale capital expenditures for the nine months ended March 31, 2001
    include the purchase of a manufacturing facility in Dublin, Virginia in
    October of 2000.

(3) Inventory profit elimination reflects the embedded wholesale profit in
    the Company-owned store inventory that has not been realized. These profits
    will be recorded when shipped to the retail customer.


                                       -8-
<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY
                    Notes to Consolidated Financial Statement
                                   (Unaudited)


(7) SEGMENT INFORMATION (continued)

     There are 29 independent  retail stores located  outside the United States.
     Approximately  2.4% and 2.8% of the  Company's net sales for the nine month
     period ended March 31, 2001 and 2000,  respectively  are derived from sales
     to these retail stores.


(8) WHOLLY-OWNED SUBSIDIARY

     The  Company  owns all of the  outstanding  stock of  Ethan  Allen,  has no
     material assets other than its ownership of Ethan Allen stock, and conducts
     all significant operating transactions through Ethan Allen. The Company has
     guaranteed Ethan Allen's obligations under its Credit Agreement.

     The condensed  balance  sheets of Ethan Allen as of March 31, 2001 and June
     30, 2000 are as follows (dollars in thousands):


                                  March 31,    June 30,
                                   2001         2000
                                  --------     --------
     ASSETS
     Current assets               $277,462     $235,782
     Non-current assets            477,371      448,059
                                  --------     --------
            Total assets          $754,833     $683,841
                                  ========     ========

     LIABILITIES
      Current liabilities         $112,521     $106,595
     Non-current liabilities        44,962       44,794
                                  --------     --------
            Total liabilities     $157,483     $151,389
                                  ========     ========


     A summary of Ethan Allen's operating activity for the three and nine months
     ended March 31, 2001 and 2000, are as follows (dollars in thousands):


                                     Three Months            Nine Months
                                         Ended                   Ended
                                        March 31,              March 31,
                                    2001       2000         2001       2000
                                    ----       ----         ----       -----

     Net sales                    $233,791   $220,300     $677,689   $627,378
     Gross profit                  103,511    103,148      310,957    295,568
     Operating income               31,231     38,403      101,479    109,703
     Interest expense and other
     related financing costs           178        392          563        978
     Income before income
     tax expense                    32,241     38,024      102,745    109,053
     Net income                   $ 20,068   $ 23,209     $ 63,950   $ 66,850


                                       -9-

<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The discussions  set forth in this form 10-Q should be read in conjunction  with
the financial  information  included  herein and the Company's  Annual Report on
Form 10-K for the year ended June 30, 2000. Management's discussion and analysis
of financial  condition  and results of  operations  and other  sections of this
report  contain  forward-looking  statements  relating to future  results of the
Company.   Such   forward-looking   statements   are   identified   by   use  of
forward-looking words such as "anticipates",  "believes",  "plans", "estimates",
"expects",  and  "intends"  or words or  phrases of  similar  expression.  These
forward-looking  statements  are  subject  to  various  assumptions,   risk  and
uncertainties,  including but not limited to,  changes in political and economic
conditions,  demand for the  Company's  products,  acceptance  of new  products,
conditions in the various  geographical markets where the Company does business,
developments  affecting  the  Company's  products and to those  discussed in the
Company's  filings with the  Securities  and Exchange  Commission.  Accordingly,
actual  results  could  differ   materially  from  those   contemplated  by  the
forward-looking statements.


RESULTS OF OPERATIONS:

     Ethan Allen's revenues are comprised of wholesale sales to dealer-owned and
company-owned retail stores and retail sales of company-owned stores. See Note 7
to the Company's Consolidated Financial Statements for the three and nine months
ended March 31, 2001 and 2000.  The  components  of  consolidated  revenues  and
operating income are as follows (dollars in millions):


<TABLE>
<CAPTION>
                                        Three Months Ended       Nine Months Ended
                                          March 31,                    March 31,
                                         2001         2000        2001        2000
                                         ------       ------    ------       ------
Revenue:

<S>                                    <C>         <C>         <C>         <C>
Wholesale                              $  188.9    $  185.7    $  530.2    $  509.9
Retail 104.3                               92.2       311.6       270.2
Elimination of inter-segment sales        (59.4)      (57.6)     (164.1)     (152.7)
                                         ------      ------      ------      ------
  Consolidated Revenue                 $  233.8    $  220.3    $  677.7    $  627.4
                                         ======      ======      ======      ======

Operating Income:
Wholesale                              $   26.9    $   36.8    $   81.3    $   98.6
Retail                                      5.4         5.0        18.1        14.6
Eliminations                               (1.1)       (3.4)        2.0        (3.6)
                                         ------      ------      ------      ------
  Consolidated Operating Income        $   31.2    $   38.4    $  101.4    $  109.6
                                         ======      ======      ======      ======
</TABLE>


THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

     Consolidated revenue for the three months ended March 31, 2001 increased by
$13.5 million or 6.1% to $233.8 million from $220.3 million for the three months
ended  March  31,  2000.   The  growth  in  sales   resulted  from  new  product
introductions,  a selective price increase  effective February 2000, an increase
in company-owned comparable store sales of 10.7% and the addition of six net new
company-owned stores since March 2000.


     Total wholesale revenue for the third quarter of fiscal year 2001 increased
by $3.2  million  or 1.7% to $188.9  million  from  $185.7  million in the third
quarter of fiscal year 2000.  This  increase  resulted  from a  selective  price
increase and new product  introductions offered at more affordable price points,
which  attracted a larger and broader  consumer  base to our stores in the third
quarter of fiscal year 2001.  These  increases  were  partially  offset by a new
program  put into place  during the second  quarter of this  fiscal  year called
'Branding the Interior' of the stores. This program refers to the Company's plan
to feature the best selling items in the most  effective  display  settings.  In
preparation,  a slowdown in home accessory orders has occurred while many stores
reduced their overall home accessory  inventory items on display and for sale in
the retail stores.


                                       -10-


<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY


     Total  retail  revenue from Ethan  Allen-owned  stores for the three months
ended March 31, 2001  increased by $12.1 million or 13.1% to $104.3 million from
$92.2 million for the three months ended March 31, 2000.  The increase in retail
sales by Ethan Allen owned stores is  attributable  to an increase in comparable
store sales of $8.2  million,  or 10.7%,  and an increase in sales  generated by
newly  opened or acquired  stores of $8.4  million,  partially  offset by closed
stores,  which generated $3.8 million less sales in fiscal year 2001 as compared
to fiscal year 2000 and a prior  quarter  gain of $0.7  million on the sale of a
retail store to an independent  dealer.  The number of Ethan Allen-owned  stores
increased to 84 as of March 31, 2001 as compared to 78 as of March 31, 2000.

     Comparable  stores  are those  which  have been  operating  for at least 15
months.  Minimal  net sales,  derived  from the  delivery  of  customer  ordered
product,  are  generated  during the first three months of  operations  of newly
opened  stores.  Stores  acquired  from  dealers by Ethan Allen are  included in
comparable store sales in their 13th full month of Ethan Allen-owned operations.

     Booked  orders for the  quarter  were lower than the prior year  quarter by
6.0%,  however,  last year's increase was 19.2%.  Total orders include wholesale
orders and written  business of  company-owned  retail stores.  Wholesale orders
were down 7.2% and orders for company-owned  stores were down 1.7% reflecting an
overall slowdown in the economy during the quarter.

     Gross profit  increased  slightly during the quarter to $103.5 million from
$103.1 million in the third quarter of the prior year. The $0.4 million increase
in gross  profit was  mainly due to greater  sales  volume,  a  selective  price
increase  effective  February  2000 and a higher  percentage  of retail sales to
total sales,  offset by a decline in the wholesale  gross  margin.  Gross margin
decreased  to 44.3% in the third  quarter of fiscal  year 2001 from 46.8% in the
prior year third quarter  principally  from the sale of more  affordably  priced
products  manufactured  at lower margins,  impacting the wholesale gross margin.
Higher costs were also incurred from plant expansions, including the start-up of
the new  case  goods  manufacturing  facility  in  Dublin,  Virginia  and  other
initiatives necessary to increase production capacity.

     Operating  expenses  increased  $7.5  million or 11.6% to $72.3  million or
30.9% of net sales in the current  quarter as compared to $64.8 million or 29.4%
of net sales for the third quarter of fiscal year 2000. This increase was mainly
due to the expansion of the retail segment  resulting in the addition of six net
new Ethan  Allen-owned  stores since March 2000 and from increased  business for
comparable Ethan Allen-owned  stores.  Additionally,  this quarter,  the Company
also experienced increases in utilities,  fuel and freight, and employee benefit
costs.

     Operating  income  for the three  months  ended  March  31,  2001 was $31.2
million or 13.3% of net sales  compared  to $38.4  million or 17.4% of net sales
for the three months  ended March 31,  2000.  Operating  income  decreased  $7.2
million or 18.8% primarily due to a lower wholesale gross margin as noted above,
greater operating  expenses  resulting from the growth of the retail segment and
an  overall  increase  in  energy  costs and  employee  benefits  this  quarter,
partially  offset by higher sales volume,  a selective price increase  effective
February 2000, and a higher percentage of retail sales to total sales.


     Total wholesale  operating income for the third quarter of fiscal year 2001
was $26.9  million or 14.2% of net sales  compared to $36.8  million or 19.8% of
net sales in the third quarter of fiscal year 2000.  Wholesale  operating income
decreased $9.9 million or 26.9% this quarter due to greater  production of lower
margin items designed to broaden our consumer base,  higher  distribution  costs
due to increases in utilities,  fuel and freight, and employee benefit costs. In
addition,  wholesale  operating income was impacted by the costs relating to the
start  up of  the  Dublin,  Virginia  manufacturing  facility  and  other  plant
expansion projects necessary to increase production capacity.


                                      -11-


<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY


     Operating  income for the retail segment  increased by $0.4 million for the
three months ended March 31, 2001 to $5.4 million or 5.2% of net sales from $5.0
million or 5.4% of net sales for the three  months  ended  March 31,  2000.  The
increase in retail  operating  income is primarily  attributable to higher sales
volume and a selective price increase  effective  February 2000. These increases
were offset by higher operating  expenses related to the addition of six net new
stores since March 2000 and higher  compensation  costs  necessary to strengthen
the staffing of the retail division.

     Interest and other miscellaneous  income of $1.2 million increased over the
prior year third quarter  principally from the gain on the sale of real property
related to a retail store relocation.

     Interest  expense for the three months ended March 31, 2001  decreased $0.2
to  $0.2  from  $0.4  in the  prior  year  period  due to  lower  debt  balances
outstanding.

     Income tax expense of $12.2  million was  recorded in the third  quarter as
compared  to $14.8  million  in the prior  year  third  quarter.  The  Company's
effective tax rate was 37.8% for the third quarter of fiscal year 2001 and 39.0%
for the third quarter of fiscal year 2000.  The decline in the effective  income
tax rate in the current  quarter as compared to the prior year quarter  resulted
from  the  utilization  of  various  state  income  tax  credits  and  from  the
realization of tax planning strategies.

     For the three months ended March 31, 2001, the Company  recorded net income
of $20.0 million,  a decrease of 13.8%,  compared to $23.2 million for the three
months ended March 31, 2000. Earnings per diluted share of $0.50 decreased 12.3%
or $0.07 per diluted  share in the quarter  from $0.57 per diluted  share in the
prior year quarter.

NINE MONTHS ENDED MARCH 31, 2001 COMPARED TO NINE MONTHS ENDED MARCH 31, 2000

     Consolidated  revenue for the nine months ended March 31, 2001 increased by
$50.3 million or 8.0% to $677.7  million from $627.4 million for the nine months
ended March 31, 2000. The growth in sales resulted from new product offerings, a
selective price increase  effective  February 2000, an increase in company-owned
comparable  store  sales  of  12.2%  and  from  the  addition  of  six  net  new
company-owned stores since March 2000.

     Total  wholesale  revenue  for the nine  month  period in fiscal  year 2001
increased by $20.3 million or 4.0% to $530.2  million from $509.9 million in the
nine month period of fiscal year 2000. The increase in wholesale revenue was due
to a selective  price  increase  and new product  introductions  offered at more
affordable  price points,  offset by fewer  production  days in the current nine
month  period as  compared  to the  comparable  prior year period and from a new
program put into place during the three  months  ended  December 31, 2000 called
'Branding the Interior' of the stores. This program refers to the Company's plan
to feature the best selling items in the most  effective  display  settings.  In
preparation,  a slowdown in home  accessory  orders  occurred  while many stores
reduced their overall home accessory  inventory items on display and for sale in
the retail stores.

     Total  retail  revenue  from Ethan  Allen-owned  stores for the nine months
ended March 31, 2001  increased by $41.4 million or 15.3% to $311.6 million from
$270.2  million for the same period in the prior  year.  Comparable  store sales
increased  12.2%.  The increase in retail sales by Ethan  Allen-owned  stores is
attributable to a $30.4 million  increase in comparable store sales, an increase
in sales generated by newly opened or acquired stores of $21.6 million,  and the
gain on the sale of  retail  stores to  independent  dealers  for $0.2  million,
partially  offset by closed stores,  which generated $10.8 million less sales in
fiscal year 2001 as compared to fiscal year 2000.

     Booked  orders for the nine month period ended March 31, 2001 were slightly
lower than the same period in the prior year by 0.5%. The prior year's  increase
in booked orders was 18.4%.  Total orders include  wholesale  orders and written
business of  company-owned  retail stores.  Wholesale  orders were down 1.8% and
orders for  company-owned  stores were higher by 4.8% reflecting slower economic
growth in the second and third quarter of this fiscal year.


                                      -12-

<PAGE>

                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY


     Gross profit  increased by $15.4  million or 5.2% to $311.0  million in the
nine months ended March 31, 2001 from $295.6  million in the nine months  ending
March 31,  2000.  The $15.4  million  increase in gross profit was mainly due to
greater sales volume, a selective price increase  effective  February 2000 and a
higher  percentage  of retail sales to total  sales,  offset by a decline in the
wholesale  gross  margin.  Gross  margin  decreased to 45.9% for the nine months
ending  March 31,  2001 from 47.1% in the  comparable  period of the prior year.
Gross margin was negatively impacted by changes in production  scheduling mainly
due to new product  introductions  and from the sale of more  affordably  priced
products manufactured at lower margins. Margins were also negatively impacted by
higher costs incurred from plant  expansions,  including the start-up of the new
case goods  manufacturing  facility  in Dublin,  Virginia  and from other  plant
expansions initiated to increase production capacity.

     Operating  expenses  increased  $23.6 million or 12.7% to $209.6 million or
30.9% of net sales in the nine months  ended  March 31, 2001  compared to $186.0
million or 29.6% of net sales for the nine  months  ended March 31,  2000.  This
increase is mainly attributable to the expansion of the retail segment resulting
in the addition of six net new Ethan  Allen-owned  stores since March 2000,  and
from increased  business for comparable Ethan  Allen-owned  stores.  Advertising
expenses,  utilities,  fuel and freight,  and employee  benefit  costs have also
increased over the last nine months.

     Operating  income  for the nine  months  ended  March 31,  2001 was  $101.4
million or 15.0% of net sales  compared to $109.6  million or 17.5% of net sales
for the nine  months  ended  March 31,  2000.  This  represents  a  decrease  in
operating income of $8.2 million or 7.5%,  which is primarily  attributable to a
lower  wholesale  gross  margin  as  noted  above,  greater  operating  expenses
resulting from the growth of the retail segment and an increase in  advertising,
energy costs and employee  benefits,  partially offset by higher sales volume, a
selective  price increase  effective  February 2000, and a higher  percentage of
retail sales to total sales.

     Total wholesale  operating  income for the first nine months of fiscal year
2001 was $81.3 million or 15.3% of net sales  compared to $98.6 million or 19.3%
of net sales in the first nine months of fiscal year 2000.  Wholesale  operating
income  decreased  $17.3 million or 17.6%.  This decrease was  attributable to a
lower  wholesale  gross margin as noted above,  higher labor and material  costs
resulting in part from changes in production  scheduling  between  manufacturing
facilities  primarily  caused  by  the  introduction  of  new  products,   fewer
production  days in the nine month  period  ending March 31, 2001 as compared to
the comparable prior year period, the start up of the Dublin, Virginia case good
facility  and  the   implementation  of  plant  expansion   projects,   and  the
introduction of new products at lower margins.

     Operating  income for the retail  segment  increased by $3.5 million in the
nine  months  ended  March 31,  2001 to $18.1  million or 5.8% of net sales from
$14.6  million or 5.4% of net sales from the nine months  ended March 31,  2000.
The increase in retail operating income by Ethan Allen-owned stores is primarily
attributable  to increased sales volume,  a selective  price increase  effective
February  2000,  the gain  recorded on the sale of retail  stores,  and a higher
percentage of retail sales to total sales,  offset by higher operating  expenses
related  to the  addition  of six net new  stores  since  March  2000 and higher
compensation costs necessary to strengthen the staffing of the retail division.

     Interest  and other  miscellaneous  income of $1.8 million  increased  $1.5
million  from $0.3  million in the nine month period ended March 31, 2000 mainly
due to the gain recorded on the sale of real property  related to a retail store
relocation and from an increase in investment  income due to lower debt balances
outstanding.

     Interest  expense for the nine months ended March 31, 2001  decreased  $0.4
million to $0.6  million  from $1.0  million for the nine months ended March 31,
2000. The decrease in interest expense is due to lower debt balances outstanding
and lower amortization of deferred financing costs.


                                       -13-

<PAGE>


                   ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY


     Income tax expense of $38.8  million was  recorded in the first nine months
as compared to $42.2 million in the prior year. The Company's effective tax rate
was 37.8% for the first nine  months of fiscal year 2001 and 38.7% for the first
nine months of fiscal year 2000. The decline in the effective income tax rate in
the current nine months compared to the prior year nine months resulted from the
utilization of various state income tax credits and from the  realization of tax
planning strategies.

     For the nine months ended March 31, 2001,  the Company  recorded net income
of $63.8  million,  a decrease of 4.3%,  compared to $66.7  million for the nine
months ended March 31, 2000.  Earnings per diluted share of $1.59 decreased 1.2%
or $0.02 per  diluted  share in the  current  nine months from $1.61 per diluted
share in the prior year.


FINANCIAL CONDITION AND LIQUIDITY

     The Company's principal sources of liquidity are cash flows from operations
and borrowing  capacity under a revolving credit facility.  Net cash provided by
operating  activities  totaled $70.4 million for the nine months ended March 31,
2001 as compared to $80.9 million for the nine months ended March 31, 2000.  The
decrease of $10.5 million in net cash provided by operating  activities resulted
from lower  earnings and from changes in working  capital  requirements  for the
nine months  ended March 31,  2001  compared to the nine months  ended March 31,
2000. Total debt  outstanding at March 31, 2001 was $9.6 million.  There were no
revolving loans outstanding  under the Credit  Agreement.  As of March 31, 2001,
there were $16.7 million of trade and standby letters of credit outstanding.

     During the nine months ended March 31, 2001, capital spending, exclusive of
retail  acquisitions,  totaled $40.9 million as compared to $31.9 million in the
nine months  ended March 31,  2000.  Capital  expenditures  made during the nine
months  ended  March  31,  2001  primarily  relate  to  (i)  the  purchase  of a
manufacturing facility in Dublin,  Virginia, (ii) manufacturing plant expansions
in  Boonville,  New York  and  Andover,  Maine,  (iii)  manufacturing  equipment
purchases  and  upgrades,  (iv) the  expansion  of a  distribution  facility  in
Kentland,  Indiana,  and (v) new  store  construction  and  interior  redesigns.
Capital  expenditures,  exclusive  of  acquisitions,  for  fiscal  year 2001 are
expected to be approximately  $55.0 million.  The Company  anticipates that cash
from operations will be sufficient to fund this level of capital expenditures.

     As of March 31, 2001,  aggregate scheduled maturities of long-term debt for
each of the next five fiscal years are $0.1 million, $0.1 million, $0.1 million,
$4.7 million and $0.1 million,  respectively.  Management believes that its cash
flow from  operations,  together with its other available  sources of liquidity,
will be adequate to make all required  payments of principal and interest on its
debt, to permit anticipated capital expenditures and to fund working capital and
other cash  requirements  over the next twelve months. As of March 31, 2001, the
Company had working capital of $163.3 million and a current ratio of 2.43 to 1.


     The  Company  may from time to time,  either  directly  or through  agents,
repurchase its common stock in the open market through  negotiated  purchases or
otherwise,  at prices and on terms  satisfactory  to the  Company.  Depending on
market prices and other conditions  relevant to the Company,  such purchases may
be  discontinued  at any time.  During the nine months ended March 31, 2001, the
Company did not purchase any of its common shares through the open market.


                                       -14-





<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
        ---------------------------------------------------------

     The  Company  is  exposed  to  interest  rate risk  primarily  through  its
borrowing  activities.  The Company's  policy has been to utilize  United States
dollar denominated  borrowings to fund its working capital and investment needs.
Short term debt, if required,  is used to meet working capital  requirements and
long term debt is  generally  used to finance  long term  investments.  There is
inherent roll-over risk for borrowings as they mature and are renewed at current
market rates. The extent of this risk is not quantifiable or predictable because
of the variability of future interest rates and the Company's  future  financing
requirements.  Although the Company did not have any revolving loans outstanding
under the Credit Agreement as of March 31, 2001, the Company had $0.2 million of
short  term  debt   outstanding  and  $9.4  million  of  total  long  term  debt
outstanding, including capital lease obligations.

     The Company has one long term debt instrument  outstanding  with a variable
interest rate.  This debt  instrument  has a principal  balance of $4.6 million,
which  matures  in  2004.  Based on the  principal  balance  outstanding,  a one
percentage  point  increase in the variable  interest  rate would not have had a
significant impact on the Company's interest expense.

     Currently,   the  Company  does  not  enter  into   financial   instruments
transactions  for trading or other  speculative  purposes or to manage  interest
rate exposure.



                                      -15-
<PAGE>



                           PART II. OTHER INFORMATION
                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY




ITEM 1. - LEGAL PROCEEDINGS

     There has been no change to matters discussed in Business-Legal Proceedings
in the Company's Form 10-K as filed with the Securities and Exchange  Commission
on September 13, 2000.


ITEM 2. - CHANGES IN SECURITIES

     There has been no change to matters  discussed in Description and Ownership
of Capital Stock in the  Company's  Form 10-K as filed with the  Securities  and
Exchange Commission on September 13, 2000.


ITEM 3. - DEFAULTS UPON SENIOR SECURITIES

          None.


ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          None.


ITEM 5. - OTHER INFORMATION

          None.


ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K

          None.


                                       -16-



<PAGE>


                    ETHAN ALLEN INTERIORS INC. AND SUBSIDIARY


                                   SIGNATURES
                                   ----------


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                           ETHAN ALLEN INTERIORS INC.
                           --------------------------
                                  (Registrant)



  DATE:   05/10/01                         BY:      /s/ M. Faroog Kathwari
          --------                          ---------------------------------
                                            M. Farooq Kathwari
                                            Chairman of the Board
                                            President and Chief
                                            Executive Officer
                                            (Principal Executive and Financial
                                             Officer)




  DATE:   05/10/01                        BY:      /s/ Michele Bateson
          --------                            ---------------------------------
                                              Michele Bateson
                                              Corporate Controller
                                              (Principal Accounting Officer)



                                       -17-
