Monday, April 03, 2023
Bassett Furniture Industries, Incorporated manufactures, markets, and retails home furnishings in the United States. The company operates in three segments: Wholesale, Retail, and Logistical Services. It is involved in the design, manufacture, sourcing, sale, and distribution of furniture products to a network of company-owned and licensee-owned Bassett Home Furnishings (BHF) retail stores, as well as independent furniture retailers; and wood and upholstery operations. As of September 16, 2017, the company operated a network of 91 company-and licensee-owned stores. It also provides shipping, delivery, and warehousing services to customers in the furniture industry. In addition, the company owns and leases retail store properties. It also distributes its products through other multi-line furniture stores, Bassett galleries or design centers, specialty stores, and mass merchants. Bassett Furniture Industries was founded in 1902 and is based in Bassett, Virginia.
Joe Gomes, Managing Director – Generalist Analyst, Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
1Q23 Results. Bassett missed on both our top and bottom line projections as the hangover from 2022 continued. The Company reported revenue of $107.7 million, short of our $111 million estimate, and down 8.6% y-o-y. Wholesale revenue declined 16%, while Retail revenue rose 1.3%. Operating income was $2.7 million, down from $6.5 million in 1Q22. Bassett reported net income of $1.4 million, or $0.16 per share, compared to net income from continuing operations of $4.3 million, or $0.44 per share, in the prior year. We had forecast EPS of $0.30.
Operating Environment. The post-COVID operating environment remains challenging. While backlog levels have returned to more normalized levels, the Company continues to work through higher cost inventory as well as a shift in consumer dollars away from furniture. Wholesale orders fell 18% y-o-y in 1Q23, while retail written orders were off 16% y-o-y.
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