by Net income for the quarter ended Aug. 29 totals $2.1 million, compared with $801 million the same period last year
BASSETT, Va. — Bassett Furniture reported a 3.5% increase in fiscal Q3 revenues over the same period last year and a boost in profitability thanks in part to an estimated $2.8 million in tariff refunds from U.S. Customs and Border Protection.
The company reported $82.8 million in consolidated net sales, up 3.4% from $80.1 million the same period last year.
Wholesale sales rose 5.7% to $53.7 million, from $50.8 million the same period last year, and retail sales rose 4.5% to $54.2 million, from $51.9 million last year.
Net income totaled $2.1 million, or 24 cents per share, compared with $801 million, or 9 cents per share last year.
Gross profit totaled $47.6 million, or 57.5% of sales, compared with $45 million, or 56.2% of sales last year. Operating income was $2.8 million, or 3.4% of sales, compared with $593 million, or .7% of sales last year.
SG&A expenses totaled $44.7 million, or 53.9% of sales compared with $44.4 million, or 55.4% of sales last year.
Of the $2.8 million in tariff refunds received, the company recorded $1 million in gross profit for the quarter. Additional amounts are expected to be recorded primarily in the fourth quarter of this year.
“Tariff costs are capitalized into inventory at the time they are incurred and subsequently recorded in the income statement when those goods are sold to a third party,” the company said, noting that it imports less than 25% of its products. “The high tariff costs recognized in the quarter were substantially offset by the refund income that the company recorded.”
“We are pleased to report a 3.4% increase in consolidated revenue bolstered by increases in both retail and wholesale sales,” said Rob Spilman, chairman and chief executive officer. “Operating profit showed nice improvement thanks to sales increases in key product categories, improved expense control, and tariff refunds that offset tariff costs that were embedded in our balance sheet. SG&A expenses as a percentage of sales, excluding new store pre-opening costs associated with the Orlando store planned to open this week, decreased 150 basis points.”
He added that written sales rose 4.4%, “continuing the positive momentum from the second quarter in spite of one less week of the Labor Day promotion in the quarter compared to last year. We were especially pleased that for the full four-week Labor Day promotion, written sales increased 9% over last year, which kicked off a good start to the fourth quarter. Wholesale orders were up nicely, showing a 7.9% increase. All wholesale channels showed a sales increase, with the Lane Venture brand up almost 29%.”
He also applauded the marketing team for continuing to “optimize various activities to improve the omni-channel experience. We had excellent response to our 84-page fall catalog. We’ve improved the navigation and visual presentation of our products on the website. Continuing the trend of double-digit increases in the past two years, e-commerce written sales were up 48% this quarter.”
He also said the company is looking forward to debuting its new 44,000-square-foot showroom in High Point on Oct. 15.
“This significant investment showcases the style and relevance of the Bassett brand, and our goal is to grow our business across all channels by inspiring customers with a broad range of new products,” he said, noting this includes a new collection created in partnership with Birmingham-based interior decorator and textile designer Heather Chadduck. The collection has 30 furniture pieces in five finishes and 70 in-line fabrics that Chadduck personally curated.
“Looking forward, we’re continuing to execute our plan that is focused on growing sales and profitability, as well as improving operating efficiency,” Spilman added. “We plan to be more aggressive on Black Friday promotions to drive traffic at retail and via the website. As for challenges, housing slowness and even higher mortgage rates remain a drag on our industry. We’re watching the impact of global issues on our business and are optimistic that we can effectively manage through these challenges in the fourth quarter.”
To view the full Q3 report, click here.
