Core Insights - Bassett Furniture Industries, Inc. reported a consolidated revenue increase of 1.1% year-over-year for Q2 2025, reaching $84.3 million, with a notable operating income of $2.5 million compared to a loss of $8.5 million in Q2 2024 [1][5]. Financial Performance - Consolidated sales for Q2 2025 were $84.3 million, up from $83.4 million in Q2 2024, reflecting a 1.1% increase [1]. - Excluding the impact of Noa Home Inc., which closed in late 2024, consolidated revenues increased by 2.5% [5]. - Operating income was $2.5 million, representing 3.0% of sales, a significant recovery from the previous year's loss of $(8.5) million [5][8]. - Gross margin improved to 55.6%, a 310 basis point increase from the prior year, primarily due to the absence of inventory valuation charges that affected the previous year's results [5][8]. - Selling, general, and administrative expenses decreased to 52.7% of sales, down 330 basis points from the prior year, attributed to restructuring and cost containment efforts [5][8]. Segment Performance - Wholesale sales increased to $54.2 million, a 3.1% rise from $52.6 million in the previous year [1][15]. - Retail sales also saw an increase, reaching $54.2 million, up 7.5% from $50.5 million in Q2 2024 [1][15]. - The Corporate & Other segment reported a loss of $(6.5) million, reflecting the closure of Noa Home Inc. [1][15]. Management Commentary - The CEO highlighted improvements in revenue and operating income despite challenges such as a weak housing market and trade tariff uncertainties [3]. - The company emphasized its focus on operational efficiency, product launches, and enhanced e-commerce capabilities as key factors in navigating the current market conditions [3]. Cash Flow and Earnings - The company generated $7.0 million in operating cash flow during the quarter [5]. - Diluted earnings per share were reported at $0.22, a recovery from a loss of $(0.82) in the prior year [5][9]. Balance Sheet Overview - Total assets as of May 31, 2025, were $331.3 million, a decrease from $341.2 million at the end of the previous fiscal year [11][12]. - Current assets increased to $144.2 million, up from $141.5 million [11]. - Total liabilities were reported at $164.6 million, with current liabilities at $74.5 million [12]. Future Outlook - The company is positioned to leverage its strong U.S. manufacturing base to serve both wholesale and retail markets effectively in the second half of fiscal 2025 [3].

Group 1 - Bassett Furniture (BSET) is currently outperforming its Consumer Discretionary peers with a year-to-date return of 13.1%, compared to the sector average of 12.1% [4] - The Zacks Rank for Bassett Furniture is 1 (Strong Buy), indicating a positive outlook based on earnings estimate revisions and improving earnings sentiment [3] - Over the past three months, the Zacks Consensus Estimate for BSET's full-year earnings has increased by 25.7%, reflecting a positive trend in analyst sentiment [4] Group 2 - Bassett Furniture belongs to the Furniture industry, which has 8 individual stocks and is currently ranked 67 in the Zacks Industry Rank; this industry has seen a decline of about 15.8% year-to-date [6] - In contrast, Roblox (RBLX), another Consumer Discretionary stock, has returned 77% since the beginning of the year and has a Zacks Rank of 2 (Buy) [5] - The Gaming industry, which includes Roblox, has 39 stocks and is ranked 87, with an average increase of 16.3% year-to-date [6]

Group 1 - Bassett Furniture Industries Incorporated (NASDAQ: BSET) is positioned as a micro-cap proxy in the approximately $250 billion US home furnishing market [1] - The company has demonstrated resilience in a challenging environment compared to its peers [1]

Core Insights - The article highlights the investment strategies and achievements of Paul Franke, a seasoned investor with 38 years of trading experience, emphasizing his contrarian stock selection style and algorithmic analysis for identifying investment opportunities [1]. Group 1: Investment Strategy - Paul Franke has developed a system called "Victory Formation," which focuses on supply/demand imbalances indicated by specific stock price and volume movements [1]. - The strategy recommends investors maintain a diversified portfolio of at least 50 well-positioned stocks and suggests using 10% or 20% stop-loss levels on individual investments to enhance performance [1]. - The "Bottom Fishing Club" articles target deep-value stocks or those showing significant positive technical momentum reversals [1]. Group 2: Performance and Recognition - Franke was consistently ranked among the top investment advisors nationally during the 1990s and achieved the 1 position in the Motley Fool® CAPS stock picking contest in 2008 and 2009, out of over 60,000 portfolios [1]. - As of September 2024, he is ranked in the Top 3% of bloggers by TipRanks® for 12-month stock picking performance based on suggestions made over the last decade [1]. Group 3: Market Analysis - The "Volume Breakout Report" articles focus on identifying positive trend changes supported by strong price and volume trading actions, indicating potential investment opportunities [1].

Industry Overview - The Zacks Furniture industry includes manufacturers, designers, and marketers of residential and commercial furnishing solutions, with involvement in various sectors such as construction, healthcare, and retail [2] - The industry is currently facing challenges due to economic uncertainty, declining consumer confidence, and reduced home-related spending influenced by high mortgage rates [1][3] Economic Challenges - U.S. consumer confidence dropped to 92.9 in March 2025, the lowest level in over a decade, reflecting concerns over tariffs and inflation [3] - High mortgage rates, around 6.64% as of early April 2025, are straining housing affordability and reducing expenditures on home furnishings [4] - The reduced activity in the housing market is directly impacting furniture sales growth, as fewer new homeowners are furnishing their spaces [5] Competitive Landscape - The industry is highly competitive, with companies investing in digital presence and shipping capabilities to capture market share [6] - Rising expenses related to labor, marketing, and occupancy are putting pressure on profit margins [6] - Companies are focusing on product innovation and digital marketing to enhance customer experience and drive growth [7][8] Strategic Initiatives - Companies like Flexsteel Industries and Bassett Furniture are strategically investing in technological advancements, product innovation, and cost efficiency to navigate current challenges [1] - Acquisitions are being pursued to broaden product portfolios and expand geographic footprints, particularly in resilient sectors like healthcare [9] Industry Performance - The Zacks Furniture industry ranks 186, placing it in the bottom 24% of over 250 Zacks industries, indicating bleak near-term prospects [10][11] - The industry's earnings estimates for 2025 have decreased from $1.73 to $1.52 per share, reflecting a lower earnings outlook [12] Recent Returns - Over the past year, the industry has declined by 33.2%, underperforming the broader Zacks Consumer Discretionary sector, which saw a 0.1% dip, and the S&P 500, which rose by 9.5% [14] Valuation Metrics - The industry is currently trading at a forward P/E of 9.97X, significantly lower than the S&P 500's 20.73X and the sector's 17.71X [17] Company Highlights - **Flexsteel Industries**: Focused on product development and innovation, with operating margins improving to 10.7% for the fiscal second quarter of 2025. Despite industry challenges, earnings estimates for fiscal 2025 increased to $3.53, indicating a 67.3% year-over-year growth [19][20] - **Bassett Furniture**: Concentrating on cost reductions and product innovation, with a Zacks Consensus Estimate for 2025 EPS at 70 cents, recovering from a loss of 48 cents per share in the previous year [23][24]

Financial Data and Key Metrics Changes - Consolidated sales decreased by 5.1% for the first quarter, primarily due to a comparison of 13 weeks this year to 14 weeks in the previous fiscal year [11][26] - On a normalized basis, sales revenue for the first quarter increased by 2.2% [12][27] - Consolidated gross margins increased by 170 basis points, primarily due to better margins in the wholesale segment [27] - Consolidated operating income was $2.5 million compared to a loss of $2.4 million in the previous year [28] Business Line Data and Key Metrics Changes - Wholesale orders decreased by 8.4% for the quarter, or 1.4% normalized for the extra week [13] - Orders from the store network increased by 4.2% on a normalized basis [13] - Retail gross margins fell modestly, but cost reductions contributed to improved results [15] - E-commerce sales increased by 36% due to investments in BassettFurniture.com [16] Market Data and Key Metrics Changes - The sales environment was more challenging in February, with the President's Day promotional event not as successful as last year [12][13] - Orders from the traditional wholesale business decreased by 10% on a normalized basis, with February being the slowest month of the quarter [14] Company Strategy and Development Direction - The strategic plan for 2025 aims to weather slow housing sales and maintain a disciplined focus on growth [10] - The company is incorporating more technology into the customer experience and fine-tuning marketing efforts [10] - Investments in omnichannel strategies are expected to drive growth in traffic and conversions [17] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer confidence has been declining, impacting business trends [11][40] - The company is preparing to address the implications of new tariffs on materials and products [23][24] - Management expressed confidence in the steps taken to run efficiently through the current economic challenges [11][36] Other Important Information - The board of directors approved a regular quarterly dividend of 20 cents per share [25] - The company plans to invest between $8 million and $12 million in capital expenditures for store remodels and technology [35] Q&A Session Summary Question: Changes in business trends due to consumer confidence drop - Management observed a spike in sales post-election but noted a return to last year's pace as the year progressed [40] Question: Health of inventory and impact of tariffs - Increased inventory was driven by new collections rather than a conscious effort to stockpile against tariffs [43][44] Question: Sustainability of gross margins - Management indicated that current gross margins are among the highest achieved but do not expect them to increase further in the short term [55] Question: Plans for addressing tariffs - The company is considering various strategies, including potential price increases, but has not finalized a plan [57] Question: New store openings and design studios - Management sees significant growth potential in the design studio program and is working on new store leases [60][66]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the quarterly period ended March 1, 2025 FORM 10-Q OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________________________ to _______________________ Commission File No.000-00209 BASSETT FURNITURE INDUSTRIES, INCORPORATED (Exact name of Registrant as specified in ...

Core Insights - Bassett Furniture Industries, Inc. reported a decrease in consolidated sales of 5.1% for Q1 FY 2025 compared to Q1 FY 2024, with sales of $82.2 million versus $86.6 million. However, when normalizing for the additional week in the prior year, sales increased by 2.2% [1][5] - The company achieved an operating income of $2.5 million, representing 3.0% of sales, a significant improvement from a loss of $(2.4) million in the prior year [5][14] - Diluted earnings per share for the quarter were $0.21, compared to a loss of $(0.14) in the same quarter last year [5][3] Financial Performance - Total sales for Q1 FY 2025 were $82.2 million, down from $86.6 million in Q1 FY 2024, reflecting a decrease of $4.4 million or 5.1% [1][8] - Wholesale sales decreased by 3.3% to $52.9 million, while retail sales saw a slight decline of 0.9% to $53.3 million [1][14] - Gross profit margin improved to 57.0%, up 170 basis points from the previous year, driven by better wholesale margins [5][8] Cost Management - Selling, general, and administrative expenses were reduced to 54.0% of sales, a decrease of 400 basis points compared to the prior year, despite the decline in sales [5][8] - The company continues to benefit from its restructuring plan initiated in 2024, which has contributed to improved operational efficiency [5][3] Strategic Initiatives - The company is focusing on product innovation and growth initiatives, including new collections and e-commerce sales, to navigate the challenging demand environment for home furnishings in 2025 [3][5] - Bassett's strategic plan aims to position the company competitively for the upcoming year, emphasizing efficiency and innovation [3][5] Segment Performance - Wholesale segment income increased to $8.7 million, while the retail segment reported a loss of $(0.05) million [14] - Corporate and other expenses, which include operations from Noa Home Inc., showed a reduction in losses, indicating improved cost management [14][15]

Core Viewpoint - Bassett Furniture Industries, Incorporated (BSET) is expected to report its first-quarter fiscal 2025 results on April 2, with mixed indicators regarding earnings and revenue performance [1]. Financial Performance - In the last reported quarter, BSET's earnings exceeded the Zacks Consensus Estimate by 660% and increased by 153.3% year over year, while net sales were 1.8% above consensus but down 11% from the previous year [2]. - The Zacks Consensus Estimate for BSET's fiscal first-quarter earnings per share remains at 2 cents, indicating a 114.3% increase from the same period last year. Revenue is estimated at $79.2 million, reflecting an 8.5% year-over-year decline [3]. Market Conditions - The anticipated decline in BSET's top line is attributed to a challenging sales environment for home furnishings, driven by ongoing weakness in the U.S. housing market and fluctuations in mortgage rates, which have pressured consumer spending [4]. Strategic Initiatives - The company is focusing on organic growth through Bassett-branded retail locations, new product offerings, e-commerce expansion, and marketing improvements, which are expected to support performance in the upcoming quarter [5]. - BSET has made significant progress on its restructuring plan aimed at reducing costs, strengthening operations, and driving long-term revenue growth and profitability through expense reduction and investment in new products and services [6]. Earnings Prediction - The current model does not predict an earnings beat for BSET, as the company has an Earnings ESP of 0.00% and a Zacks Rank of 4 (Sell), indicating lower odds for a positive earnings surprise [7][8].

Group 1 - Bassett Furniture Industries, Inc. will host a conference call on April 3, 2025, at 9:00 a.m. ET to discuss its Q1 2025 financial results [1] - The earnings release will be issued after market close on April 2, 2025 [1] - The call will be hosted by Chairman and CEO Rob Spilman and CFO Mike Daniel [1] Group 2 - The public can listen to the conference call via webcast on the Company's investor relations website or through a specific media server link [2] - The conference call will be archived for replay on the Company's investor site [2] Group 3 - Bassett Furniture Industries, Inc. is a leading provider of high-quality home furnishings with 87 company- and licensee-owned stores accounting for approximately 60% of its wholesale business [3] - The company offers custom furniture design and manufacturing, free in-home design visits, and coordinated decorating accessories [3] - Bassett has a significant traditional wholesale business with over 1000 open market accounts, including Bassett Design Centers and Bassett Custom Studios [3]