Ethan Allen CEO sells over $294k in company stock By Investing.com

Ethan Allen (NYSE:) Interiors Inc. (NYSE:ETD) Chairman, President, and CEO M. Farooq Kathwari sold a total of $294,250 worth of company stock, according to a recent SEC filing. The transactions, all executed on June 17, 2024, involved the sale of common stock at a uniform price of $27.50 per share.

The filing detailed multiple sales, including 10,000 shares directly owned by Kathwari, and smaller amounts of 175 shares each held in trusts for Kolhai Gibran Kathwari, Zavier Irfan Kathwari, Gabriel Alexander Van Puyenbroeck-Kathwari, and Samantha Maxime Van Puyenbroeck-Kathwari. Following these transactions, Kathwari’s direct ownership in the company stands at 1,725,193 shares.

The sales were conducted under a Rule 10b5-1 stock selling plan, which allows company insiders to sell shares at predetermined times to avoid any accusations of trading on non-public information. The plan was put into place on March 14, 2024, and was disclosed in Ethan Allen’s Quarterly Report filed on April 24, 2024. Additionally, the Irfan Kathwari Foundation sold 8,000 shares as part of the same plan, although Kathwari does not have a reportable pecuniary interest in these shares.

Investors often monitor insider sales for signals about executives’ confidence in their company’s prospects. However, it’s important to note that such sales can also be part of standard financial planning strategies and may not necessarily indicate a lack of confidence in the firm.

Ethan Allen, known for its wood household furniture manufacturing, has seen its stock price fluctuate in recent months amidst a changing economic landscape. The transactions reported by Kathwari come at a time when the market is closely observing insider trading activity for hints of corporate health and future performance.

In other recent news, Ethan Allen Interiors Inc . reported its fiscal 2024 third-quarter results, revealing a strong balance sheet with a robust cash position of $181.1 million and no outstanding debt. Despite facing a softening market and other challenges, the company announced a 61.3% consolidated gross margin and a 10% adjusted operating margin. The Board of Directors also declared an increased quarterly cash dividend of $0.39 per share, up by 8.3%.

Consolidated net sales reached $146.4 million amid lower delivered unit volume and manufacturing reductions. Written order trends were impacted by market softness, high interest and inflation rates, less designer center traffic, and adverse weather. Despite these challenges, Ethan Allen ended the quarter with a wholesale backlog worth $57.7 million.

The company is cautiously optimistic about the future, expecting an improved home furnishings environment. It is repositioning design centers and reducing their size to enhance efficiency. Furthermore, Ethan Allen is focusing on strengthening product programs and utilizing technology in marketing and merchandising. These are among the recent developments for the company.

InvestingPro Insights

Amidst the recent insider trading activity by Ethan Allen Interiors Inc. (NYSE:ETD) Chairman, President, and CEO M. Farooq Kathwari, investors are keen on understanding the financial stability and future prospects of the company. InvestingPro data and tips provide a deeper dive into the company’s financials and analyst expectations which may offer additional context to the insider transactions.

InvestingPro data shows that Ethan Allen holds a market capitalization of $690.7 million, with a price-to-earnings (P/E) ratio standing at 9.83. This valuation metric suggests that the company’s stock is trading at a relatively moderate earnings multiple. Additionally, the gross profit margin for the last twelve months as of Q3 2024 is notably high at 61.02%, indicating the company’s ability to retain a significant portion of sales as gross profit.

Investors should note that the dividend yield is substantial at 7.43%, reflecting the company’s commitment to returning value to shareholders. This aligns with one of the InvestingPro Tips highlighting that Ethan Allen pays a significant dividend to shareholders and has maintained these payments for 29 consecutive years. Such a consistent dividend payout history often signals a stable financial position and a management team that prioritizes shareholder returns.

While the company’s financials show strengths in certain areas, an InvestingPro Tip points out that analysts have revised their earnings downwards for the upcoming period. This suggests that investors may want to exercise caution and further investigate the potential headwinds that could be impacting the company’s earnings outlook.

For those looking to delve deeper into Ethan Allen’s financial health and future projections, InvestingPro offers additional tips. There are currently 11 more tips available on https://www.investing.com/pro/ETD, which could provide investors with a more comprehensive understanding of the company’s position. To access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.