Bassett(US:BSET)2026-04-01 20:23Financial Performance - Net income for the three months ended February 28, 2026, was $1,116 million, a decrease of 40% compared to $1,854 million for the same period in 2025[16]. - Basic earnings per share for the quarter ended February 28, 2026, was $0.13, down from $0.21 for the quarter ended March 1, 2025[51]. - Total sales revenue for the three months ended February 28, 2026 decreased by $1,822 or 2.2% compared to the prior year, primarily due to winter weather disruptions[80]. - Consolidated net sales of furniture and accessories for the quarter ended February 28, 2026, were $80,340 million, compared to $82,162 million for the quarter ended March 1, 2025[60]. - Retail sales from Company-owned stores decreased by $749 or 1.4%, while sales to external wholesale customers decreased by $1,073 or 3.7%[80]. - Wholesale net sales for the three months ended February 28, 2026 increased by $34 or 0.1%, with a 0.6% increase in shipments to the retail store network[92]. - Gross margins for the three months ended February 28, 2026 decreased by 80 basis points, attributed to lower margins in both wholesale and retail businesses[81]. - Gross margin for the same period declined by 170 basis points, attributed to lower margins on in-line goods due to delayed price increases related to tariff costs[95]. - SG&A expenses as a percentage of sales increased by 70 basis points from the previous year, reflecting reduced leverage of fixed costs due to lower sales levels[81]. Assets and Liabilities - Total assets decreased to $316,154 million as of February 28, 2026, down from $323,819 million on November 29, 2025, representing a decline of approximately 2.05%[14]. - Total current liabilities decreased to $71,823 million as of February 28, 2026, down from $76,984 million, a reduction of about 6.7%[14]. - Cash and cash equivalents decreased to $32,989 million from $41,277 million, reflecting a decline of approximately 20%[16]. - Accounts receivable increased to $15,125 million gross, with a net of $14,662 million after accounting for an allowance for credit losses of $463 million[30]. - Total inventories as of February 28, 2026, were $65,666 million, an increase from $61,790 million as of November 29, 2025[33]. - The company had a line of credit of up to $25,000 million, with $5,866 million outstanding under standby letters of credit as of February 28, 2026[38]. - The liability for the Supplemental Retirement Income Plan was $5,617 million as of February 28, 2026, compared to $5,611 million on November 29, 2025[39]. - Total post-employment benefit obligations increased to $11,629 million as of February 28, 2026, from $11,379 million on November 29, 2025[45]. - The company maintained a Consolidated Minimum Tangible Net Worth of at least $120,000 million, in compliance with its credit facility requirements[38]. Cash Flow and Operating Activities - Net cash used in operating activities was $5,468 million for the three months ended February 28, 2026, compared to a net cash used of $52 million in the same period of 2025[16]. - The overall cash position declined by $8,288 during the first three months of 2026, with cash and cash equivalents totaling $50,952 as of February 28, 2026[107]. - Interest income for the three months ended February 28, 2026, was $553 million, a decrease of $6 million from the prior year[102]. - Other loss, net, for the same period was $192 million, a decline of $267 million from the prior year, primarily due to lower costs associated with company-owned life insurance[103]. Tax and Expenses - The effective tax rate for the three months ended February 28, 2026, was 26.5%, compared to 27.4% for the same period in 2025[24]. - The effective tax rate for the quarter was 26.5%, compared to 27.4% in the prior year, influenced by state income taxes and permanent differences[105]. - The company recognized an expense of $12 million under deferred compensation arrangements during the three months ended February 28, 2026[46]. - New store pre-opening costs incurred during the quarter amounted to $95 million, with total start-up losses expected to range from $400 million to $600 million per store[96][98]. E-commerce and Sales Trends - E-commerce revenue saw a 25% increase in web sales for fiscal 2025, with written sales orders for the web increasing by 28% for the quarter and delivered sales increasing by 46%[76]. - Approximately 60% of wholesale sales arise from the network of 86 Company-owned and licensee-owned Bassett Home Furnishings stores[73]. - Over 75% of wholesale revenues are derived from products manufactured in the United States, utilizing a mix of domestic and globally sourced components[78]. - Wholesale backlog at February 28, 2026 was $16,745, down from $19,519 at November 29, 2025 and $19,515 at March 1, 2025[93]. Legal and Compliance - The company is involved in various legal and environmental matters, but these are not expected to have a material adverse effect on financial position or future results[114].