Ethan Allen (NYSE:ETD) Interiors Inc. (NYSE:ETD) CEO M. Farooq Kathwari sold a total of 10,700 shares of company stock on July 17, 2024, for an average price of $31.05 per share, according to recent SEC filings. The total value of the sold shares amounted to approximately $332,235.
The transactions were executed under a Rule 10b5-1 stock selling plan, which Kathwari had adopted on March 14, 2024. The plan became effective on June 17, 2024, and was disclosed in the company's Quarterly Report filed on April 24, 2024. It's noteworthy that the sales also included 8,000 shares sold by the Irfan Kathwari Foundation, which, while beneficially owned by Mr. Kathwari, does not grant him any reportable pecuniary interest.
Following these transactions, Mr. Kathwari's direct ownership in Ethan Allen stands at 1,715,193 shares. Additionally, the SEC filing revealed indirect holdings, which include 15,364 shares held by his spouse, 8,565.25 shares in a 401(k) plan, and 24,650 shares each in trusts for Kolhai Gibran Kathwari, Zavier Irfan Kathwari, Samantha Maxime Van Puyenbroeck-Kathwari, and Gabriel Alexander Van Puyenbroeck-Kathwari.
Ethan Allen, a leader in the furniture industry, has not released any official statements regarding the transactions. However, the sale of shares by a company's CEO often draws attention from investors seeking to understand the executives' perspective on the company's valuation and future prospects.
The transactions were signed off by Matthew J. McNulty, acting as attorney-in-fact for M. Farooq Kathwari, on July 19, 2024. As per SEC regulations, insiders of a company are required to disclose their transactions in company securities, providing transparency to the market and allowing investors to make informed decisions.
In other recent news, Ethan Allen Interiors Inc . has reported a strong fiscal 2024 third-quarter performance despite market challenges. The company announced a 61.3% consolidated gross margin and a 10% adjusted operating margin, supported by a robust cash position of $181.1 million and no outstanding debt. The Board of Directors declared an increased quarterly cash dividend of $0.39 per share, up by 8.3%. However, consolidated net sales were at $146.4 million due to lower delivered unit volume and manufacturing reductions, with written order trends impacted by market softness and high interest and inflation rates. Despite these challenges, Ethan Allen maintains a healthy wholesale backlog worth $57.7 million. The company has implemented cost reduction measures, including headcount reduction and operational streamlining, and invested in technology, manufacturing, and logistics to strengthen its market position. The company remains cautiously optimistic about the future, expecting an improved home furnishings environment.
InvestingPro Insights
Amidst the news of Ethan Allen Interiors Inc. (NYSE:ETD) CEO M. Farooq Kathwari's recent stock sale, investors may seek additional insights to gauge the company's financial health and future prospects. According to InvestingPro, Ethan Allen holds a significant cash position relative to its debt, suggesting a stable balance sheet. In addition, the company boasts impressive gross profit margins, which stand at 61.02% for the last twelve months as of Q3 2024—a testament to its efficient operations and strong pricing power.
However, it's important for shareholders to consider that analysts have revised their earnings expectations downwards for the upcoming period, indicating potential headwinds or a conservative outlook for the company. Furthermore, while Ethan Allen pays a noteworthy dividend yield of 6.78% as of 2024, there are concerns as analysts anticipate a decline in sales for the current year, with revenue growth showing a decrease of 20.24% over the same period.
InvestingPro data reveals a market capitalization of $752.19 million and a price-to-earnings (P/E) ratio of 10.71, suggesting that the stock may be valued reasonably relative to its earnings. Meanwhile, the company's dividend growth has been robust, with a 15.73% increase over the last twelve months as of Q3 2024, which could appeal to income-focused investors.
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