Bassett Furniture Industries, Incorporated (BSET) Q3 2025 Earnings Call Transcript
Consolidated Sales Growth Increased by 5.9% year-over-year, with August being the strongest month for orders. Excluding sales from Noa Home, consolidated revenues increased by 7.3%. The growth was attributed to ongoing operating efficiencies and a recovery from last year's cyber incident.
Operating Income Achieved $600,000 in consolidated operating profit compared to a loss of $6.4 million in the prior year. This improvement was due to better wholesale business performance and recovery from the cyber incident in the previous year.
Gross Margin Improved by 320 basis points year-over-year, driven by better wholesale margins. However, this was slightly offset by a decrease in retail margins at company-owned stores.
Orders from Corporate and Licensed Stores Grew by 5.9%, driven by a 9.8% increase in company-owned retail stores. Wholesale sales to the open market were up approximately 1%.
Outdoor Sales Increased by 18% year-over-year, attributed to strong demand for outdoor furniture.
Retail Gross Margins Declined slightly due to lower margins for both in-line and clearance goods. Aggressive efforts to move through discontinued inventory contributed to this decline.
SG&A Expenses Decreased by 590 basis points as a percentage of retail sales, driven by ongoing operating expense efficiencies and higher sales.
E-commerce Sales Increased by single digits year-over-year, with an 18% rise in conversion rates despite a slight decline in website traffic. Improvements in the website experience contributed to this growth.
Bassett Custom Studio Orders Increased by 35% in Q3, with shipments up by 38%. Growth was driven by new and existing stores.
Wholesale Net Sales Increased by $3 million or 6.2% year-over-year, driven by a 9.2% increase in shipments to the retail store network and a 9.6% increase in Lane Venture shipments.
Wholesale Gross Margins Increased by 440 basis points year-over-year, driven by improved pricing strategies and greater leverage of fixed costs from higher sales levels.
Retail Net Sales Increased by $4.6 million or 9.8% year-over-year, attributed to higher sales and promotional activities.
Retail Backlog Decreased to $32.2 million from $37.1 million at November 30, 2024, and $33.3 million at August 31, 2024.
Operating Cash Flow Generated a deficit for the quarter, reducing cash and short-term investments by $5.2 million. The company ended the quarter with $54.6 million in cash and short-term investments and no outstanding debt.
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Bassett Furniture Q4 2025 Earnings Call Insights
- Significant Sales Growth: Bassett Furniture achieved a 5.1% revenue increase in Q4 2025, amounting to $4.4 million, with a 6.4% rise excluding the impact of Noa Home, demonstrating resilience in sales despite a sluggish housing market.
- Slight Margin Decline: The overall gross margin stood at 56.3%, reflecting a 30 basis point decrease from the previous year primarily due to retail margin pressures, yet higher wholesale margins indicate effective cost control efforts.
- New Market Expansion Plans: The company plans to continue opening new stores in 2026, including in Cincinnati and Orlando, which is expected to further drive sales growth and enhance brand presence, while also relocating its existing Long Island store to optimize market positioning.
- New Business Division Launch: Bassett has initiated the Bassett Hospitality division, focusing on boutique hotels and senior living channels as a 2026 priority, aiming to diversify its business to tackle market challenges and seize new opportunities.
Bassett Furniture Q4 Earnings Report Analysis
- Earnings Miss: Bassett Furniture reported a Q4 GAAP EPS of $0.18, missing expectations by $0.11, indicating challenges in profitability that could impact investor confidence.
- Revenue Growth: The company achieved Q4 revenue of $88.66 million, reflecting a 5.2% year-over-year increase and exceeding market expectations by $1.76 million, suggesting some sales growth potential despite the earnings miss.
- Market Reaction: The earnings miss may pressure the stock price in the short term, prompting investors to monitor the company's future profitability improvement measures and market strategies closely.
- Analyst Ratings: Despite the current earnings pressure, Seeking Alpha's quant rating remains optimistic about Bassett Furniture, indicating confidence in the company's long-term growth potential.
Bassett Furniture Declares $0.20 Quarterly Dividend, Record Date February 13, 2026
- Quarterly Dividend Announcement: Bassett Furniture's Board of Directors has declared a $0.20 per share dividend, payable on February 27, 2026, which will provide shareholders with a stable cash return and enhance investor confidence.
- Record Date for Shareholders: Shareholders must hold shares by February 13, 2026, to qualify for the dividend, underscoring the company's commitment to shareholder rights and strengthening investor relations.
- Market Sales Channels: Bassett sells approximately 60% of its products through a network of 86 company- and licensee-owned stores, showcasing its strong distribution capabilities in the high-quality home furnishings market and enhancing brand influence.
- Wholesale Business Expansion: The company has over 1,000 open market accounts in its traditional wholesale business, servicing not only general furniture stores but also a growing number of interior design firms, indicating its diversified market strategy and growth potential.
La-Z-Boy Expands Retail Network, Forecasts $2.65 EPS for 2026
- Retail Expansion: La-Z-Boy is enhancing its market scale and achieving immediate sales and profit growth by adding 15 new stores in the Southeast, demonstrating proactive positioning in a competitive furniture market.
- Portfolio Optimization: The company is focusing on its core North American upholstery business by exiting non-core operations, which is expected to lift margins and strengthen its competitive edge, particularly among younger consumers.
- Improving Sales Trends: La-Z-Boy is experiencing improving written sales trends and strong wholesale performance, which are anticipated to drive future revenue growth, despite overall furniture demand being impacted by a weak housing market.
- Earnings Forecast Upgrade: Analysts have raised their earnings estimate for La-Z-Boy's fiscal 2026 from $2.46 to $2.65 per share, reflecting market optimism regarding the company's future growth prospects.
Stock to Watch: Bassett Furniture (BSET) Faces Bearish Trends
Company Overview: Bassett Furniture Industries operates 86 stores in the U.S. and has a significant wholesale business, selling home furnishings and custom furniture design, while also offering direct sales through its website.
Financial Performance: In Q3 2025, Bassett met earnings expectations with a revenue increase of 5.9% year-over-year, and analysts predict a turnaround in earnings with a projected growth of 268% in 2025.
Market Challenges: Despite recent struggles due to a declining housing market affecting furniture sales, Bassett's stock has risen 22% year-to-date, indicating some investor confidence.
Investment Considerations: The stock is considered undervalued with a forward P/E ratio of 15, and it offers a dividend yield of 4.9%, making it potentially attractive for investors looking for value in the furniture industry.
Hidden Gems: 5 Overlooked Small Cap Income Compounders You Shouldn't Miss
Investment Strategy: Investors focusing on smaller companies with strong fundamentals, high dividend yields, and consistent cash flow can uncover long-term wealth opportunities that are often overlooked by the market.
Company Examples: Five companies highlighted—Miller Industries, Bassett Furniture, Getty Realty, H2O America, and USCB Financial Group—demonstrate solid business models, strong balance sheets, and reliable dividend policies, making them attractive for disciplined investors.
Market Inefficiency: Smaller companies are less analyzed and not universally owned, allowing savvy investors to find quality stocks at discounted prices before they gain wider recognition.
Long-Term Value Creation: The combination of steady cash distributions and strong operational performance in these companies positions them well for compounding growth, providing investors with income while they wait for the market to catch up.
Bassett Furniture Q4 2025 Earnings Call Insights
- Significant Sales Growth: Bassett Furniture achieved a 5.1% revenue increase in Q4 2025, amounting to $4.4 million, with a 6.4% rise excluding the impact of Noa Home, demonstrating resilience in sales despite a sluggish housing market.
- Slight Margin Decline: The overall gross margin stood at 56.3%, reflecting a 30 basis point decrease from the previous year primarily due to retail margin pressures, yet higher wholesale margins indicate effective cost control efforts.
- New Market Expansion Plans: The company plans to continue opening new stores in 2026, including in Cincinnati and Orlando, which is expected to further drive sales growth and enhance brand presence, while also relocating its existing Long Island store to optimize market positioning.
- New Business Division Launch: Bassett has initiated the Bassett Hospitality division, focusing on boutique hotels and senior living channels as a 2026 priority, aiming to diversify its business to tackle market challenges and seize new opportunities.
Bassett Furniture Q4 Earnings Report Analysis
- Earnings Miss: Bassett Furniture reported a Q4 GAAP EPS of $0.18, missing expectations by $0.11, indicating challenges in profitability that could impact investor confidence.
- Revenue Growth: The company achieved Q4 revenue of $88.66 million, reflecting a 5.2% year-over-year increase and exceeding market expectations by $1.76 million, suggesting some sales growth potential despite the earnings miss.
- Market Reaction: The earnings miss may pressure the stock price in the short term, prompting investors to monitor the company's future profitability improvement measures and market strategies closely.
- Analyst Ratings: Despite the current earnings pressure, Seeking Alpha's quant rating remains optimistic about Bassett Furniture, indicating confidence in the company's long-term growth potential.
Bassett Furniture Declares $0.20 Quarterly Dividend, Record Date February 13, 2026
- Quarterly Dividend Announcement: Bassett Furniture's Board of Directors has declared a $0.20 per share dividend, payable on February 27, 2026, which will provide shareholders with a stable cash return and enhance investor confidence.
- Record Date for Shareholders: Shareholders must hold shares by February 13, 2026, to qualify for the dividend, underscoring the company's commitment to shareholder rights and strengthening investor relations.
- Market Sales Channels: Bassett sells approximately 60% of its products through a network of 86 company- and licensee-owned stores, showcasing its strong distribution capabilities in the high-quality home furnishings market and enhancing brand influence.
- Wholesale Business Expansion: The company has over 1,000 open market accounts in its traditional wholesale business, servicing not only general furniture stores but also a growing number of interior design firms, indicating its diversified market strategy and growth potential.
La-Z-Boy Expands Retail Network, Forecasts $2.65 EPS for 2026
- Retail Expansion: La-Z-Boy is enhancing its market scale and achieving immediate sales and profit growth by adding 15 new stores in the Southeast, demonstrating proactive positioning in a competitive furniture market.
- Portfolio Optimization: The company is focusing on its core North American upholstery business by exiting non-core operations, which is expected to lift margins and strengthen its competitive edge, particularly among younger consumers.
- Improving Sales Trends: La-Z-Boy is experiencing improving written sales trends and strong wholesale performance, which are anticipated to drive future revenue growth, despite overall furniture demand being impacted by a weak housing market.
- Earnings Forecast Upgrade: Analysts have raised their earnings estimate for La-Z-Boy's fiscal 2026 from $2.46 to $2.65 per share, reflecting market optimism regarding the company's future growth prospects.
Stock to Watch: Bassett Furniture (BSET) Faces Bearish Trends
Company Overview: Bassett Furniture Industries operates 86 stores in the U.S. and has a significant wholesale business, selling home furnishings and custom furniture design, while also offering direct sales through its website.
Financial Performance: In Q3 2025, Bassett met earnings expectations with a revenue increase of 5.9% year-over-year, and analysts predict a turnaround in earnings with a projected growth of 268% in 2025.
Market Challenges: Despite recent struggles due to a declining housing market affecting furniture sales, Bassett's stock has risen 22% year-to-date, indicating some investor confidence.
Investment Considerations: The stock is considered undervalued with a forward P/E ratio of 15, and it offers a dividend yield of 4.9%, making it potentially attractive for investors looking for value in the furniture industry.
Hidden Gems: 5 Overlooked Small Cap Income Compounders You Shouldn't Miss
Investment Strategy: Investors focusing on smaller companies with strong fundamentals, high dividend yields, and consistent cash flow can uncover long-term wealth opportunities that are often overlooked by the market.
Company Examples: Five companies highlighted—Miller Industries, Bassett Furniture, Getty Realty, H2O America, and USCB Financial Group—demonstrate solid business models, strong balance sheets, and reliable dividend policies, making them attractive for disciplined investors.
Market Inefficiency: Smaller companies are less analyzed and not universally owned, allowing savvy investors to find quality stocks at discounted prices before they gain wider recognition.
Long-Term Value Creation: The combination of steady cash distributions and strong operational performance in these companies positions them well for compounding growth, providing investors with income while they wait for the market to catch up.
