Good morning. Ethan Allen CFO Matt McNulty on why the furniture maker wants to shrink to grow; Trump postpones AI order; Walmart customers are putting less gas in their tanks, thanks to higher prices.

A reminder that our Morning Ledger newsletter won't be published Monday in observance of Memorial Day in the U.S. We will be back Tuesday.

At the start of the year Jennifer Williams started talking with Ethan Allen executives about their efforts to downsize. Its shoppers once navigated an 18,000-square-foot labyrinth of furniture at its headquarters; today, that space has been cut by nearly a third. Jennifer wanted a closer look. She writes for today’s newsletter:

Many of the company’s showrooms were too big. To streamline stores and cut costs, the furniture maker was shrinking its physical footprint. A couple of months later, I made the roughly two-hour drive to Danbury, Conn., to see the changes firsthand. Executives and others from the company talked about the methodical approach to slashing square footage and reducing headcount to better position the business.

Some numbers that struck me: Over the past three years, Ethan Allen has stripped at least 25% from its selling floor footprint. The workforce in that time has been cut by nearly 20%.

The reductions come as American companies look for ways to do more with less and while retailers reduce their real estate footprints to adjust to changing shopping habits. Ethan Allen began shedding floor space years ago, betting on digital tools to replace square footage. Now, the downsizing is helping with external challenges: Record-high gas prices are chilling consumer spending, political gridlock in Washington, D.C., has hit the company’s contract to outfit officials’ homes and tariffs have driven up costs.

“We’re in smaller spaces,” Chief Financial Officer Matt McNulty told me at their Danbury headquarters. “That helps offset rising costs of rent, utilities, gas increases, weaker demand, all of that.”

I spoke with Ethan Allen designers, real estate strategists, executives and others about the shift toward lower-square-footage retail.

And I saw a demonstration of three-dimensional rendering tools that allow designers to now easily show the same number of options as when stores were bigger. Check out the full story here for why Ethan Allen thinks smaller showrooms may be a winning strategy.

—Jennifer Williams

📆 Earnings

• BJ’s Wholesale Club Holdings
• Booz Allen Hamilton Holding

It looks like there are more signs the White House is divided on AI policy. President Trump postponed the signing of an executive order that would have given the government more oversight over the artificial-intelligence industry, saying he didn’t want to take any action that would slow down the U.S. in the AI race.

Hours before a scheduled signing event Thursday that was set to include industry executives, Trump told reporters in the Oval Office that the order would have asked AI companies to preview models with the federal government. Such a move would set back the U.S. in its competition with China, which AI analysts say the U.S. is winning, he said.

What Trump said: “I really thought that could have been a blocker, and I want to make sure it’s not,” he said. “I don’t want to do anything that will get in the way of that lead.”

• California Governor Signs Order on AI Aimed at Helping Workers

📰 Other headlines

• Exclusive: U.S. to Award Quantum-Computing Firms $2 Billion and Take Equity Stakes
• The AI Superstars Who Say a ‘Vibe Slop’ Crisis Is Coming
• SpaceX Set to Launch Upgraded Starship on Pre-IPO Test Flight
• Social-Media Companies Settle Youth-Harm Case Ahead of Wave of Trials
• Airbus, Air France Found Guilty in 2009 Plane Crash That Killed 228 People
• Jeep and Ram Parent Stellantis to Launch Nine New Vehicles Under $40,000
• 🤖Too Much Work to Do? Have Your Digital Twin Handle It
• Tobacco Giant Donated $5 Million to MAGA Inc. Shortly Before Vaping Decision
• Exclusive: Exxon Blasts Proxy Advisers for Conflict of Interest in Fight Over Texas Move
• Estee Lauder Ends Acquisition Talks With Spain’s Puig
• How Weird Are ETFs Getting? Try UFO and Midnight-Bitcoin Funds
• Trump Picked Warsh to Cut Rates. Markets Are Bracing for the Opposite.
• Star Wars Turns to a ‘Baby Yoda’ Puppet to Break Its Box-Office Funk

📈 Earnings wrapup

• Heard on the Street: Even at $5 Trillion, Nvidia Is Underappreciated
• Ralph Lauren Sales Climb, Boosted by Strength in China
• Axel Springer Posts Higher Revenue, Adjusted Earnings
• Walmart Sees Signs at Gas Pump That Consumers Are Stressed

The WSJ CFO Council convenes the world’s top financial leaders so they can gain perspective on navigating market uncertainty, aligning priorities and making decisions that deliver measurable results. Join this trusted community where CFOs exchange approaches, access strategic insights and continuously sharpen their influence across the enterprise.

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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.

Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew.

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