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Note 17 - Segment Information | 3 Months Ended
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Sep. 30, 2025
Notes to Financial Statements |
Segment Reporting Disclosure [Text Block] |
(17) | 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. 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. 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 our 143 Company-operated design centers. Retail revenue is generated upon the retail sale and delivery of our products to our retail customers through our network of retail home delivery centers. Retail profitability reflects (i) the retail gross margin, which represents the difference between the retail net sales price and the cost of goods, purchased from the wholesale segment, and (ii) other operating costs associated with retail segment activities. 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 our revenue from independent third-party transactions. The following tables present net sales and operating income by segment (in thousands):
|  | Three months ended September 30, 2025 |
|  | Wholesale |  |  | Retail |  |  | Eliminations |  |  | Consolidated |
Net sales |  | $ | 86,961 |  |  | $ | 128,563 |  |  | $ | (68,540 | ) |  | $ | 146,984 |
Less significant expense categories: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling expenses and cost of sales |  |  | 66,757 |  |  |  | 98,697 |  |  |  | (69,182 | ) |  |  | 96,272 |
General and administrative expenses |  |  | 8,992 |  |  |  | 26,147 |  |  |  | - |  |  |  | 35,139 |
Advertising expenses |  |  | 3,381 |  |  |  | 1,691 |  |  |  | - |  |  |  | 5,072 |
Restructuring and other charges, net of gains |  |  | (83 | ) |  |  | 617 |  |  |  | - |  |  |  | 534 |
Operating income |  |  | 7,914 |  |  |  | 1,411 |  |  |  | 642 |  |  |  | 9,967 |
Interest and other income, net |  |  | 4,080 |  |  |  | 18 |  |  |  | - |  |  |  | 4,098 |
Interest and other financing costs |  |  | 59 |  |  |  | - |  |  |  | - |  |  |  | 59 |
Income before income taxes |  | $ | 11,935 |  |  | $ | 1,429 |  |  | $ | 642 |  |  | $ | 14,006 |
|  | Three months ended September 30, 2024 |
|  | Wholesale |  |  | Retail |  |  | Eliminations |  |  | Consolidated |
Net sales |  | $ | 86,056 |  |  | $ | 132,753 |  |  | $ | (64,472 | ) |  | $ | 154,337 |
Less significant expense categories: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling expenses and cost of sales |  |  | 62,733 |  |  |  | 99,132 |  |  |  | (62,695 | ) |  |  | 99,170 |
General and administrative expenses |  |  | 8,770 |  |  |  | 25,076 |  |  |  | - |  |  |  | 33,846 |
Advertising expenses |  |  | 2,320 |  |  |  | 1,204 |  |  |  | - |  |  |  | 3,524 |
Restructuring and other charges, net of gains |  |  | 378 |  |  |  | (146 | ) |  |  | - |  |  |  | 232 |
Operating income |  |  | 11,855 |  |  |  | 7,487 |  |  |  | (1,777 | ) |  |  | 17,565 |
Interest and other income, net |  |  | 2,181 |  |  |  | 17 |  |  |  | - |  |  |  | 2,198 |
Interest and other financing costs |  |  | 60 |  |  |  | - |  |  |  | - |  |  |  | 60 |
Income before income taxes |  | $ | 13,976 |  |  | $ | 7,504 |  |  | $ | (1,777 | ) |  | $ | 19,703 |
The following table presents additional information by segment (in thousands):
|  | Three months ended |
|  | September 30, |
|  | 2025 |  |  | 2024 |
Depreciation and amortization |  |  |  |  |  |  |  |
Wholesale segment |  | $ | 1,619 |  |  | $ | 1,510 |
Retail segment |  |  | 2,225 |  |  |  | 2,362 |
Consolidated total |  | $ | 3,844 |  |  | $ | 3,872 |
Capital expenditures |  |  |  |  |  |  |  |
Wholesale segment |  | $ | 398 |  |  | $ | 2,795 |
Retail segment |  |  | 2,006 |  |  |  | 794 |
Consolidated total |  | $ | 2,404 |  |  | $ | 3,589 |
Total Assets |  |  |  |  |  |  |  |
Wholesale segment |  | $ | 370,474 |  |  | $ | 381,325 |
Retail segment |  |  | 398,008 |  |  |  | 385,378 |
Inventory profit elimination(1) |  |  | (31,376 | ) |  |  | (28,999 | )
Consolidated total |  | $ | 737,106 |  |  | $ | 737,704 |
| (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.

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- Definition The entire disclosure for reporting segments including data and tables. 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