Bassett Reports Fiscal Second Quarter Results

Rhea-AI Summary

Bassett Furniture Industries (NASDAQ: BSET) reported improved Q2 2025 financial results with revenues increasing 1.1% year-over-year to $84.3 million. The company achieved an operating income of $2.5 million (3.0% of sales) compared to a loss of $(8.5) million in the prior year quarter.

Key highlights include a gross margin improvement of 310 basis points to 55.6%, reduced SG&A expenses by 330 basis points to 52.7% of sales, and diluted EPS of $0.22 versus $(0.82) loss per share in Q2 2024. The company generated $7.0 million in operating cash flow and maintained strong performance across both wholesale and retail segments despite challenging market conditions.

Positive

• Operating income improved to $2.5 million from $(8.5) million loss year-over-year
• Gross margin increased 310 basis points to 55.6%
• SG&A expenses reduced by 330 basis points to 52.7% of sales
• Generated $7.0 million in operating cash flow
• Retail segment revenue grew 7.5% to $54.2 million
• Wholesale segment revenue increased 3.1% to $54.2 million

Negative

• Modest overall revenue growth of only 1.1% year-over-year
• Challenging market conditions including weak housing market affecting consumer demand
• Uncertainty about trade tariffs impact on cost of goods
• Inventory levels increased by $4.4 million from November 2024

Insights

Financial Analyst

Bassett shows modest growth and profitability improvement amid challenging furniture market, reversing previous losses with effective operational management.

Bassett Furniture has managed to deliver positive operational momentum in Q2 2025, with consolidated revenue increasing 1.1% year-over-year to $84.3 million. More notably, when excluding the closed Noa Home Inc. business, revenues actually grew by a more impressive 2.5%.

The company's operational turnaround is particularly noteworthy. Bassett generated $2.5 million in operating income (3.0% of sales) compared to an $8.5 million loss in the same quarter last year. However, this comparison requires context - last year's results included $5.5 million in asset impairment charges and $2.7 million in inventory valuation charges. Even accounting for these one-time items, the improvement remains significant.

Gross margin improved substantially to 55.6%, up 310 basis points year-over-year, though this was primarily due to the absence of inventory valuation charges from the previous year. The company's cost discipline has been effective, with SG&A expenses reduced to 52.7% of sales, down 330 basis points from last year.

Looking at segment performance, the wholesale division continues to be the profit engine, delivering $8.3 million in operating income (15.3% margin) on $54.2 million in sales. The retail segment, while still less profitable, showed marked improvement with a small profit of $0.5 million compared to a $2.2 million loss last year.

Cash flow generation has been solid, with $7.0 million in operating cash flow for the quarter. The balance sheet remains healthy with $39.4 million in cash and cash equivalents plus $20.4 million in short-term investments. This strong liquidity position provides flexibility in the current challenging market environment.

The company's ability to generate positive results despite what CEO Robert Spilman described as "ongoing challenges affecting consumer confidence" and a "historically weak housing market" demonstrates effective operational management. Their focus on efficiency, product launches, e-commerce expansion, and targeted marketing appears to be yielding results even in a difficult market.

BASSETT, Va., July 09, 2025 (GLOBE NEWSWIRE) -- Bassett Furniture Industries, Inc. (Nasdaq: BSET) reported today its results of operations for its second quarter ended May 31, 2025.

Q2 Consolidated Business Highlights: [FY 25 vs. FY 24, unless otherwise specified]

• Revenues increased 1.1% from the prior year quarter. Excluding sales from Noa Home Inc. which closed in late 2024, consolidated revenues increased 2.5%.
• Operating income was $2.5 million or 3.0% of sales as compared to a loss of $(8.5) million for the prior year quarter which included $5.5 million of asset impairment charges and $2.7 million of additional inventory valuation charges.
• Gross margin at 55.6% represented a 310 basis point improvement over the prior year as the Company recorded the above-mentioned inventory valuation charges in the second quarter of 2024. Excluding those charges, gross margin would have been essentially flat to the prior year quarter.
• Selling, general and administrative expenses were 52.7% of sales, 330 basis points lower than the prior year, reflecting benefits from the prior year restructuring plan and on-going cost containment activities.
• Generated $7.0 million of operating cash flow. 
• Diluted earnings per share of $0.22 as compared to a loss of $(0.82) in the prior year.

Fiscal 2025 Second Quarter Overview
(Dollars in millions)

		Sales											Operating Income (Loss)
		2nd Qtr					Dollar			%			2nd Qtr			% of			2nd Qtr			% of
		2025		2024			Change			Change				2025		Sales				2024		Sales
Consolidated (1)		$	84.3	$	83.4		$	0.9		1.1	%		$	2.5		3.0	%		$	(8.5	)	-10.1	%
Wholesale		$	54.2	$	52.6		$	1.6		3.1	%		$	8.3		15.3	%		$	5.7		10.8	%
Retail		$	54.2	$	50.5		$	3.7		7.5	%		$	0.5		0.9	%		$	(2.2	)	-4.4	%
Corporate & Other (2)		$	-	$	1.1		$	(1.1	)	-100.0	%		$	(6.5	)	N/A			$	(6.9	)	N/A
(1) Our consolidated results for the quarter include certain intercompany eliminations. Consolidated results for the 2nd quarter of 2024 include asset impairment charges of $5.5 million which are not allocated to our segment operating results. See Table 4, "Segment Information" below for an illustration of the effects of these items on our consolidated sales and operating income.
(2) Corporate and Other includes the operations of Noa Home Inc. (fiscal 2024 only) along with the shared Corporate costs that are benefiting both the Wholesale and Retail segments.

“We’re pleased with both revenue and operating income improvements in the second quarter, despite the ongoing challenges affecting consumer confidence and purchasing decisions, including a historically weak housing market and uncertainty about the impact of trade tariffs on the cost of goods,” said Robert H. Spilman, Jr., Bassett Chairman and Chief Executive Officer. “Our rigorous attention to increased operating efficiency, product launches, expanded e-commerce capabilities and more customized marketing helped us weather this tepid home furnishings market. We believe these advantages and our strong US manufacturing base position Bassett well to serve both wholesale and retail markets for the second half of fiscal 2025.”

Conference Call and Webcast
The Company will hold a conference call to discuss its quarterly results on July 10, 2025, at 9:00 am ET. The public is invited to listen to the conference call by webcast, accessible through the Company’s investor relations website, https://investors.bassettfurniture.com/. Participants can also listen to the conference call via https://edge.media-server.com/mmc/p/gcbdwqr7. A replay and transcript of the conference call will be available on demand on the investor relations site.

About Bassett Furniture Industries, Inc.
Bassett Furniture Industries, Inc. (NASDAQ: BSET) is a leading provider of high-quality home furnishings with a wide range of distribution types. Bassett sales approximately 60% of its products through its network of 87 company- and licensee-owned stores which feature the latest on-trend furniture styles, the Company’s capabilities in custom furniture design and manufacturing, free in-home design visits, and coordinated decorating accessories in a professional and friendly environment. Bassett also has a significant traditional wholesale business with more than 1,000 open market accounts. Most of the open market sales are through Bassett Design Centers and Bassett Custom Studios which function as a store within a multi-line store featuring the Company’s custom furniture capabilities. The wholesale business, including the Lane Venture outdoor brand, also services general furniture stores and a growing number of interior design firms. Bassett products are also directly available to consumers at www.bassettfurniture.com. (BSET-E)

Forward-Looking Statements
Certain of the statements in this release, particularly those preceded by, followed by or including the words “believes,” “plans,” “expects,” “anticipates,” “intends,” “should,” “estimates,” or similar expressions, or those relating to or anticipating financial results or changes in operations for periods beyond the end of the second fiscal quarter of 2025, constitute “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended. For those statements, Bassett claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. In many cases, Bassett cannot predict what factors would cause actual results to differ materially from those indicated in the forward-looking statements. Expectations included in the forward-looking statements are based on preliminary information, as well as certain assumptions which management believes to be reasonable at this time. The following important factors affect Bassett and could cause actual results to differ materially from those indicated in the forward looking statements: the effects of national and global economic or other conditions and future events on the retail demand for home furnishings and the ability of Bassett’s customers and consumers to obtain credit; the success of marketing, logistics, retail and other initiatives; and the economic, competitive, governmental and other factors identified in Bassett’s filings with the Securities and Exchange Commission. Any forward-looking statement that Bassett makes speaks only as of the date of such statement, and Bassett undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indication of future performance, unless expressed as such, and should only be viewed as historical data.

Table 1
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations - unaudited
(In thousands, except for per share data)
		Quarter Ended												Six Months Ended*
		May 31, 2025						June 1, 2024						May 31, 2025						June 1, 2024
					Percent of						Percent of						Percent of						Percent of
		Amount			Net Sales			Amount			Net Sales			Amount			Net Sales			Amount			Net Sales
Net sales of furniture and accessories		$	84,348		100.0	%		$	83,410		100.0	%		$	166,510		100.0	%		$	169,964		100.0	%
Cost of furniture and accessories sold			37,439		44.4	%			39,650		47.5	%			72,771		43.7	%			78,337		46.1	%
Gross profit			46,909		55.6	%			43,760		52.5	%			93,739		56.3	%			91,627		53.9	%
Selling, general and administrative expenses			44,412		52.7	%			46,707		56.0	%			88,787		53.3	%			96,931		57.0	%
Asset impairment charges			-		0.0	%			5,515		6.6	%			-		0.0	%			5,515		3.2	%
Income (loss) from operations			2,497		3.0	%			(8,462	)	-10.1	%			4,952		3.0	%			(10,819	)	-6.4	%
Interest income			521		0.6	%			627		0.8	%			1,080		0.6	%			1,383		0.8	%
Other loss, net			(422	)	-0.5	%			(276	)	-0.3	%			(881	)	-0.5	%			(380	)	-0.2	%
Income (loss) before income taxes			2,596		3.1	%			(8,111	)	-9.7	%			5,151		3.1	%			(9,816	)	-5.8	%
Income tax expense (benefit)			678		0.8	%			(910	)	-1.1	%			1,379		0.8	%			(1,422	)	-0.8	%
Net income (loss)			1,918		2.3	%			(7,201	)	-8.6	%			3,772		2.3	%			(8,394	)	-4.9	%
Basic and diluted earnings (loss) per share		$	0.22					$	(0.82	)				$	0.43					$	(0.96	)
*26 weeks in fiscal 2025 versus 27 weeks in fiscal 2024.

Table 2
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
		(Unaudited)
Assets		May 31, 2025			November 30, 2024
Current assets
Cash and cash equivalents		$	39,433		$	39,551
Short-term investments			20,385			20,360
Accounts receivable, net			12,883			13,181
Inventories, net			59,362			54,965
Recoverable income taxes			4,607			4,240
Other current assets			7,523			9,242
Total current assets			144,193			141,539
Property and equipment, net			75,088			77,047
Other long-term assets
Deferred income taxes, net			5,493			6,867
Goodwill			7,217			7,217
Intangible assets			6,939			6,968
Right of use assets under operating leases			84,877			93,624
Other			7,526			7,908
Total long-term assets			112,052			122,584
Total assets		$	331,333		$	341,170
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		$	14,533		$	13,303
Accrued compensation and benefits			7,798			6,898
Customer deposits			24,029			25,742
Current portion of operating lease obligations			19,702			18,050
Other accrued expenses			8,462			9,410
Total current liabilities			74,524			73,403
Long-term liabilities
Post employment benefit obligations			10,814			10,882
Long-term portion of operating lease obligations			78,116			88,395
Other long-term liabilities			1,103			1,163
Total long-term liabilities			90,033			100,440
Stockholders’ equity
Common stock			43,410			43,681
Retained earnings			122,597			122,847
Additional paid-in-capital			-			6
Accumulated other comprehensive income			769			793
Total stockholders' equity			166,776			167,327
Total liabilities and stockholders’ equity		$	331,333		$	341,170

Table 3
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows - unaudited
(In thousands)
		Six Months Ended*
		May 31, 2025				June 1, 2024
Operating activities:
Net income (loss)		$	3,772			$	(8,394	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			4,478				5,291
Asset impairment charges			-				5,515
Inventory valuation charges			1,292				3,879
Deferred income taxes			1,374				(1,440	)
Other, net			642				689
Changes in operating assets and liabilities:
Accounts receivable			298				241
Inventories			(5,689	)			2,228
Other current and long-term assets			1,352				(1,217	)
Right of use assets under operating leases			8,474				8,707
Customer deposits			(1,713	)			233
Accounts payable and other liabilities			978				(6,930	)
Obligations under operating leases			(8,355	)			(10,721	)
Net cash provided by (used in) operating activities			6,903				(1,919	)
Investing activities:
Purchases of property and equipment			(2,275	)			(3,683	)
Other			(74	)			(383	)
Net cash used in investing activities			(2,349	)			(4,066	)
Financing activities:
Cash dividends			(3,476	)			(3,153	)
Other issuance of common stock			165				179
Repurchases of common stock			(1,158	)			(489	)
Taxes paid related to net share settlement of equity awards			(136	)			(161	)
Repayments of finance lease obligations			(67	)			(153	)
Net cash used in financing activities			(4,672	)			(3,777	)
Effect of exchange rate changes on cash and cash equivalents			-				1
Change in cash and cash equivalents			(118	)			(9,761	)
Cash and cash equivalents - beginning of period			39,551				52,407
Cash and cash equivalents - end of period		$	39,433			$	42,646
*26 weeks in fiscal 2025 versus 27 weeks in fiscal 2024.

Table 4
BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES
Segment Information - unaudited
(In thousands)
		Quarter Ended				Six Months Ended*
		May 31, 2025		June 1, 2024		May 31, 2025		June 1, 2024
Sales Revenue
Wholesale sales of furniture and accessories		$ 54,229		$ 52,610		$ 107,156		$ 107,310
Less: Sales to retail segment		(24,113)		(20,752)		(48,172)		(44,514)
Wholesale sales to external customers		30,116		31,858		58,984		62,796
Retail sales of furniture and accessories		54,232		50,468		107,526		104,222
Corporate & Other - Noa Home (1)		-		1,084		-		2,946
Consolidated net sales of furniture and accessories		$ 84,348		$ 83,410		$ 166,510		$ 169,964
Income (Loss) before Income Taxes
Income (Loss) from Operations
Wholesale		$ 8,290		$ 5,687		$ 16,975		$ 12,446
Retail		482		(2,222)		434		(3,834)
Net expenses - Corporate and other (1)		(6,521)		(6,942)		(12,747)		(14,537)
Inter-company elimination		246		530		290		621
Asset impairment charges		-		(5,515)		-		(5,515)
Consolidated income (loss) from operations		2,497		(8,462)		4,952		(10,819)
Interest income		521		627		1,080		1,383
Other loss, net		(422)		(276)		(881)		(380)
Consolidated income (loss) before income taxes		$ 2,596		$ (8,111)		$ 5,151		$ (9,816)
*26 weeks in fiscal 2025 versus 27 weeks in fiscal 2024.
(1) Corporate and Other includes the operations of Noa Home Inc. (fiscal 2024 only) along with the shared Corporate costs that are benefiting both the Wholesale and Retail segments.

Contacts:
J. Michael Daniel
Senior Vice President and 
Chief Financial Officer
(276) 629-6620 – Investors
mdaniel@bassettfurniture.com

Peter D. Morrison
Vice President of Communications 
(276) 629-6450 – Media

FAQ

What were Bassett Furniture's (BSET) Q2 2025 earnings per share?

Bassett reported diluted earnings of $0.22 per share in Q2 2025, compared to a loss of $(0.82) per share in the prior year quarter.

How much revenue did Bassett Furniture generate in Q2 2025?

Bassett generated total revenue of $84.3 million in Q2 2025, representing a 1.1% increase from the prior year quarter.

What was Bassett's operating income margin in Q2 2025?

Bassett achieved an operating income margin of 3.0%, compared to -10.1% in the prior year quarter, showing significant improvement in operational efficiency.

How many stores does Bassett Furniture operate?

Bassett operates a network of 87 company- and licensee-owned stores, which account for approximately 60% of their product sales.

What was Bassett's gross margin in Q2 2025?

Bassett's gross margin was 55.6%, representing a 310 basis point improvement over the prior year quarter.