by Company posts gains in quarterly and YOY sales, significant growth in annual net income
BASSETT, Va. — Upholstery and case goods manufacturer Bassett Furniture reported a 5.8% increase in revenues and nearly flat net income during its fourth fiscal quarter ended Nov. 26, 2022.
For the quarter, it reported $121 million in sales, up from $114.4 million for the same period last year. Net income for the quarter was $.5.02 million, or 55 cents per share, down slightly from $5.04 million, or 52 cents per share in 2021.
For the full year, the company reported net sales of $485.6 million, up 12.7% from the $430.9 million reported in 2021. Its net income for the full year was $63.3 million, or $6.96 per share, up from just over $18 million, or $1.83 per share in 2021.
For the quarter, it reported $76.3 million in retail sales of furniture and accessories, up from $66.4 million the same period in 2021, a 14.9% increase and operating income of $5.8 million, up more than 70% from the $3.4 million reported in 2021.
For the full year, the retail segment had $286.9 million in sales, up 15.8% from the $247.8 million reported the year prior. Operating income for the full year in the retail segment was $21.5 million, more than triple the $7.04 million reported in 2021.
The wholesale side of the business reported $74.6 million in sales for the quarter, down 1.7% from the $76 million reported for the same period in 2021. For the full year, wholesale sales totaled $324.6 million, up 9.9% from the $295.3 million reported in 2021.
Operating income for the wholesale segment during the fourth quarter fell to $856,000, from $2.9 million in 2021, and for the full year, totaled $9.2 million, compared to $17.5 million in 2021.
“We posted revenue of $121.0 million in our fourth quarter, a 5.8% increase against the backdrop of an increasingly difficult macroeconomic environment as we head into another year,” said Rob Spilman Jr., chairman and chief executive officer. “Operating profit of $6.7 million was slightly ahead of last year even though we made selected price adjustments designed to reduce inventory that were detrimental to our margins.”
“We also invested more digital marketing dollars to drive our top line. Our company is stronger than when we entered the pandemic three years ago,” he added. “We have trimmed our underperforming stores, properly adjusted our retail cost structure, gained wholesale market share with independent furniture dealers, and further fortified our strong balance sheet. Still, we acknowledge that fiscal 2023 has started off slowly from a wholesale order standpoint with quarter-to-date written sales off 20% compared to the robust pace we experienced last year. However, quarter-to-date shipments are down 10% as fourth-quarter orders were off modestly. Despite the uncertainty around the current pace of orders, we will concentrate on running our business with financial discipline and operational excellence while executing our growth strategies that are designed to create long-term value for our shareholders.”
He also went on to describe current service levels in the company’s wholesale operations as being “almost back to the best-in-class standard that was our hallmark prior to the breakdown of the global supply chain.” He added that backlogs also are now comparable with pre-pandemic levels.
“Combined wholesale shipments declined 1.6% for the quarter with increases in wood and outdoor furniture products being offset by declines in domestic upholstery and Club Level,” Spilman said. “As previously discussed, the ‘right-sizing’ of our Club Level inventory is negatively affecting our wholesale margins, and, in the case of the fourth quarter, constitutes more than 100% of the year-over-year wholesale margin shortfall.
“On a positive note, wholesale inventories declined by $4.0 million in the quarter with Club Level again representing essentially all of the reduction. So, we are making good progress on this front. Also, our domestic upholstery operating margins returned to their historical levels by improving 670 basis points as we are through the period of misalignment between inflated raw materials and our ability to pass those costs along. In fact, we have recently begun to receive several price decreases from various suppliers. Looking ahead, we have returned to a more normalized wholesale operating environment in terms of supply chain. Our challenge now is to efficiently operate while we assess how the economy will affect order flow and our work schedules.”
