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Note 20 - Segment Information | 12 Months Ended
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Jun. 30, 2025
Notes to Financial Statements |
Segment Reporting Disclosure [Text Block] |
(20) | Segment Information
Ethan Allen conducts business globally and has strategically aligned its business into two reportable segments: Wholesale and Retail. These two segments represent strategic business areas of our vertically integrated enterprise that operate separately and provide their own distinctive services. Our operating segments are aligned with how the Company, including our chief operating decision maker (the “CODM”) who is our Chairman of the Board, President and Chief Executive Officer, evaluates the operating results and performance of the business. Wholesale Segment. The wholesale segment is principally involved in the development of the Ethan Allen brand and encompasses all aspects of design, manufacturing, sourcing, marketing, sale and distribution of our broad range of home furnishings and accents. Wholesale revenue is recorded upon the shipment of our products to our retail network of independently operated design centers, Company-operated design centers, and other third-party contract business clients. Our wholesale segment’s net sales to Company-operated design centers are eliminated in consolidation. Retail Segment. The retail segment sells home furnishings and accents to clients through 142 Company-operated design centers. Ethan Allen design centers are typically located in retail settings as freestanding destinations or as part of town centers, lifestyle centers, and suburban shopping malls, and average approximately 14,000 square feet in size. The geographic distribution of our retail design center locations is disclosed under Item 2, Properties, contained in Part I of this Annual Report on Form 10-K. Intersegment. We account for intersegment sales transactions between our segments consistent with independent third-party transactions, that is, at current market prices. As a result, the manufacturing profit related to sales to our retail segment is included within our wholesale segment. Operating income realized on intersegment revenue transactions is therefore generally consistent with the operating income realized on revenue from independent third-party transactions. We evaluate the performance of our two segments based upon net sales and operating income in order to allocate resources. Segment operating income is based on operating income before interest and other financing costs, interest and other income, net and income tax expense. The CODM assesses performance by regularly reviewing each segment’s significant expense categories which include selling expenses and cost of sales, general and administrative expenses, and advertising expenses. The accounting policies of the operating segments are the same as those described in Note 3, Summary of Significant Accounting Policies. The following tables present net sales and operating income by segment (in thousands):
|  | Fiscal Year Ended June 30, 2025 |
|  | Wholesale |  |  | Retail |  |  | Intersegment Eliminations |  |  | Consolidated |
Net sales |  | $ | 359,057 |  |  | $ | 523,142 |  |  | $ | (267,550 | ) |  | $ | 614,649 |
Less significant expense categories: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling expenses and cost of sales |  |  | 267,556 |  |  |  | 396,156 |  |  |  | (262,768 | ) |  |  | 400,944 |
General and administrative expenses |  |  | 33,260 |  |  |  | 100,411 |  |  |  | - |  |  |  | 133,671 |
Advertising expenses |  |  | 10,797 |  |  |  | 6,906 |  |  |  | - |  |  |  | 17,703 |
Restructuring expenses |  |  | 455 |  |  |  | (112 | ) |  |  | - |  |  |  | 343 |
Operating income |  |  | 46,989 |  |  |  | 19,781 |  |  |  | (4,782 | ) |  |  | 61,988 |
Interest and other income, net |  |  | 7,214 |  |  |  | 61 |  |  |  | - |  |  |  | 7,275 |
Interest and other financing costs |  |  | 243 |  |  |  | - |  |  |  | - |  |  |  | 243 |
Income before income taxes |  | $ | 53,960 |  |  | $ | 19,842 |  |  | $ | (4,782 | ) |  | $ | 69,020 |
|  | Fiscal Year Ended June 30, 2024 |
|  | Wholesale |  |  | Retail |  |  | Intersegment Eliminations |  |  | Consolidated |
Net sales |  | $ | 371,087 |  |  | $ | 540,550 |  |  | $ | (265,416 | ) |  | $ | 646,221 |
Less significant expense categories: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling expenses and cost of sales |  |  | 280,504 |  |  |  | 409,065 |  |  |  | (269,996 | ) |  |  | 419,573 |
General and administrative expenses |  |  | 31,058 |  |  |  | 101,309 |  |  |  | - |  |  |  | 132,367 |
Advertising expenses |  |  | 8,433 |  |  |  | 7,934 |  |  |  | - |  |  |  | 16,367 |
Restructuring expenses |  |  | 2,385 |  |  |  | (2,462 | ) |  |  | - |  |  |  | (77 | )
Operating income |  |  | 48,707 |  |  |  | 24,704 |  |  |  | 4,580 |  |  |  | 77,991 |
Interest and other income, net |  |  | 7,562 |  |  |  | 138 |  |  |  | - |  |  |  | 7,700 |
Interest and other financing costs |  |  | 245 |  |  |  | - |  |  |  | - |  |  |  | 245 |
Income before income taxes |  | $ | 56,024 |  |  | $ | 24,842 |  |  | $ | 4,580 |  |  | $ | 85,446 |
|  | Fiscal Year Ended June 30, 2023 |
|  | Wholesale |  |  | Retail |  |  | Intersegment Eliminations |  |  | Consolidated |
Net sales |  | $ | 449,591 |  |  | $ | 662,555 |  |  | $ | (320,764 | ) |  | $ | 791,382 |
Less significant expense categories: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling expenses and cost of sales |  |  | 337,034 |  |  |  | 492,153 |  |  |  | (321,912 | ) |  |  | 507,275 |
General and administrative expenses |  |  | 34,204 |  |  |  | 99,260 |  |  |  | - |  |  |  | 133,464 |
Advertising expenses |  |  | 9,371 |  |  |  | 7,796 |  |  |  | - |  |  |  | 17,167 |
Restructuring expenses |  |  | 190 |  |  |  | (3,910 | ) |  |  | - |  |  |  | (3,720 | )
Operating income |  |  | 68,792 |  |  |  | 67,256 |  |  |  | 1,148 |  |  |  | 137,196 |
Interest and other income, net |  |  | 3,939 |  |  |  | 103 |  |  |  | - |  |  |  | 4,042 |
Interest and other financing costs |  |  | 213 |  |  |  | - |  |  |  | - |  |  |  | 213 |
Income before income taxes |  | $ | 72,518 |  |  | $ | 67,359 |  |  | $ | 1,148 |  |  | $ | 141,025 |
The following table presents additional information by segment (in thousands):
|  | Fiscal Year Ended June 30, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  |
Wholesale segment |  | $ | 6,232 |  |  | $ | 6,336 |  |  | $ | 6,328 |
Retail segment |  |  | 9,291 |  |  |  | 9,620 |  |  |  | 9,286 |
Consolidated total |  | $ | 15,523 |  |  | $ | 15,956 |  |  | $ | 15,614 |
Capital expenditures |  |  |  |  |  |  |  |  |  |  |  |
Wholesale segment |  | $ | 6,337 |  |  | $ | 4,240 |  |  | $ | 6,787 |
Retail segment |  |  | 4,931 |  |  |  | 5,366 |  |  |  | 7,098 |
Consolidated total |  | $ | 11,268 |  |  | $ | 9,606 |  |  | $ | 13,885 |
Total Assets |  |  |  |  |  |  |  |  |  |  |  |
Wholesale segment |  | $ | 375,126 |  |  | $ | 379,693 |  |  | $ | 373,921 |
Retail segment |  |  | 393,918 |  |  |  | 392,243 |  |  |  | 403,651 |
Inventory profit elimination (1) |  |  | (31,945 | ) |  |  | (27,019 | ) |  |  | (32,119 | )
Consolidated total |  | $ | 737,099 |  |  | $ | 744,917 |  |  | $ | 745,453 |
(1) | Represents the wholesale profit contained in the retail segment inventory that has not yet been realized. These profits are realized when the related inventory is sold.
Geographic Information International net sales are comprised of our wholesale segment sales to non-U.S. independent retailers and our retail segment sales to clients through our Company-operated design centers in Canada. Sales are attributed to countries on the basis of the client's location. The following table sets forth consolidated net sales by geographic area for each of the past three fiscal years:
|  | Fiscal Year Ended June 30, |
Sales by Country |  | 2025 |  |  | 2024 |  |  | 2023 |
U.S. |  |  | 97.3 | % |  |  | 96.7 | % |  |  | 97.0 | %
All Others |  |  | 2.7 | % |  |  | 3.3 | % |  |  | 3.0 | %
The following table sets forth long-lived assets by geographic area at June 30 (in thousands):
|  | 2025 |  |  | 2024 |  |  | 2023 |
U.S. |  | $ | 287,379 |  |  | $ | 296,849 |  |  | $ | 301,951 |
Mexico |  |  | 17,627 |  |  |  | 17,986 |  |  |  | 20,695 |
Honduras |  |  | 10,773 |  |  |  | 11,245 |  |  |  | 10,686 |
Canada |  |  | 3,632 |  |  |  | 3,420 |  |  |  | 4,696 |
Total long-lived assets(1) |  | $ | 319,411 |  |  | $ | 329,500 |  |  | $ | 338,028 |
(1) | Long-lived assets consist of property, plant and equipment and operating lease right-of-use assets and exclude goodwill, intangible assets, deferred income taxes and other assets.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name 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