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Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Bassett Furniture Inds / Equity Bottom-Up

<ul><li style="list-style-type: square;">We met with CFO Mike Daniel at the recent High Point Market.</li><li style="list-style-type: square;">There was a shock to the consumer in the April/May/June timeframe following the “Liberation Day” tariff announcements after a fairly good start to the year.</li><li style="list-style-type: square;">Management’s current tone is one of cautious optimism like others we spoke with at the market.</li></ul>

We met with CFO Mike Daniel at the recent High Point Market.There was a shock to the consumer in the April/May/June timeframe following the “Liberation Day” tariff announcements after a fairly good start to the year.Management’s current tone is one of cautious optimism like others we spoke with at the market.

BSET: Management Cautiously Optimistic at High Point; New Furniture Collections Showcased

<ul><li>BSET reported 3QFY25 EPS of $0.09 versus ($0.52), below our $0.12 estimate but in line with FactSet consensus.</li><li>Net sales in the quarter increased 5.9% to $80.1MM, slightly below our forecast for 6.3% growth to $80.4MM, but slightly above consensus of $79.9MM.</li><li>Excluding the closure of Noa Home in late 2024, sales increased 7.3%. </li></ul>

BSET reported 3QFY25 EPS of $0.09 versus ($0.52), below our $0.12 estimate but in line with FactSet consensus.Net sales in the quarter increased 5.9% to $80.1MM, slightly below our forecast for 6.3% growth to $80.4MM, but slightly above consensus of $79.9MM.Excluding the closure of Noa Home in late 2024, sales increased 7.3%. 

Bassett Furniture Industries, Inc: Sales Growth Accelerating...

<ul><li>BSET beat our WTR estimate by $0.11, posting 2QFY25 EPS of $0.22 on better-than-expected margins as restructuring gains demonstrate traction.</li><li>Revenue in the quarter, up 2.5% on an organic basis if we adjust for NOA Home (closed as part of the restructuring), was ~$1.5 million better than we expected in what remains a very tough industry environment for residential furniture.</li><li>The Bassett stores (company-owned and independent) outperformed the open market during the quarter.</li></ul>

BSET beat our WTR estimate by $0.11, posting 2QFY25 EPS of $0.22 on better-than-expected margins as restructuring gains demonstrate traction.Revenue in the quarter, up 2.5% on an organic basis if we adjust for NOA Home (closed as part of the restructuring), was ~$1.5 million better than we expected in what remains a very tough industry environment for residential furniture.The Bassett stores (company-owned and independent) outperformed the open market during the quarter.

Bassett Furniture Industries, Inc: 2QFY25 EPS of $0.22 Beats WTR Estimate on Restructuring Gains

<ul><li>BSET posted 1QFY25 EPS of $0.21, $0.18 better than our estimate of $0.03 and $0.35 better than 1QFY24 as restructuring gains begin to make progress, even as demand remains challenged.</li><li>Sales were down ~5.1% Y/Y but came in about $2 million better than we expected, which is encouraging given all of the headwinds facing the industry (including the slow housing market, persistent higher-than- normal inflation, the lingering effects of the pandemic-era demand pull-forward, and, lately, the increase in economic uncertainty arising from the ongoing tariff policy <span style="font-size: var(--content-font-size);">volatility/uncertainty that appears to be negatively affecting </span>consumer confidence and investment and consumption decision- making).</li><li>But the real story here is the margin gains on the back of the company’s announced restructuring initiatives. </li></ul>

BSET posted 1QFY25 EPS of $0.21, $0.18 better than our estimate of $0.03 and $0.35 better than 1QFY24 as restructuring gains begin to make progress, even as demand remains challenged.Sales were down ~5.1% Y/Y but came in about $2 million better than we expected, which is encouraging given all of the headwinds facing the industry (including the slow housing market, persistent higher-than- normal inflation, the lingering effects of the pandemic-era demand pull-forward, and, lately, the increase in economic uncertainty arising from the ongoing tariff policy volatility/uncertainty that appears to be negatively affecting consumer confidence and investment and consumption decision- making).But the real story here is the margin gains on the back of the company’s announced restructuring initiatives. 

BSET. - Strong Margin Growth on Restructuring Augments 1QFY25 EPS of $0.21A Vs. $0.03E

<ul><li>4QFY24 adjusted EPS of $0.24 beat our estimate of ($0.08) on much stronger-than-expected margins despite the continued weakness in industry-wide demand.</li><li>Revenue was down 13.7% in wholesale and 8.3% in retail, as tough industry conditions persist, driven by the persistent slump in housing (a traditional driver of demand in residential furniture) and subdued spending on home improvement in the face of the post-lockdown exuberance.</li><li>Nonetheless, a few bright spots were apparent, as retail orders were down only 0.6%, orders for outdoor furniture were up 33% (on a relatively small base), and e-commerce was up 27% (similarly, on a small base). </li></ul>

4QFY24 adjusted EPS of $0.24 beat our estimate of ($0.08) on much stronger-than-expected margins despite the continued weakness in industry-wide demand.Revenue was down 13.7% in wholesale and 8.3% in retail, as tough industry conditions persist, driven by the persistent slump in housing (a traditional driver of demand in residential furniture) and subdued spending on home improvement in the face of the post-lockdown exuberance.Nonetheless, a few bright spots were apparent, as retail orders were down only 0.6%, orders for outdoor furniture were up 33% (on a relatively small base), and e-commerce was up 27% (similarly, on a small base). 

Bassett Furniture Industries, Inc. - 4QFY24 Adj. EPS of $0.24 Beats Our Estimate

United States

Bassett Furniture Industries, Incorporated manufactures and sells a full line of furniture for the home.  The Company offers bedroom and dining suites, occasional tables and entertainment units, upholstered sofas and love seats, recliners, and mattresses, among other products.  Bassett's products are sold through retailers, including Bassett Furniture Direct.

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Bassett Furniture Inds (BSET US)

BSET: Management Cautiously Optimistic at High Point; New Furniture Collections Showcased

There was a shock to the consumer in the April/May/June timeframe following the “Liberation Day” tariff announcements after a fairly good start to...

Water Tower Research

Bassett Furniture Industries, Inc: Sales Growth Accelerating...

Net sales in the quarter increased 5.9% to $80.1MM, slightly below our forecast for 6.3% growth to $80.4MM, but slightly above consensus of $79.9MM.

Water Tower Research

Bassett Furniture Industries, Inc: 2QFY25 EPS of $0.22 Beats WTR Estimate on Restructuring Gains

BSET beat our WTR estimate by $0.11, posting 2QFY25 EPS of $0.22 on better-than-expected margins as restructuring gains demonstrate traction.

Water Tower Research

BSET. - Strong Margin Growth on Restructuring Augments 1QFY25 EPS of $0.21A Vs. $0.03E

BSET posted 1QFY25 EPS of $0.21, $0.18 better than our estimate of $0.03 and $0.35 better than 1QFY24 as restructuring gains begin to make...

Water Tower Research

Bassett Furniture Industries, Inc. - 4QFY24 Adj. EPS of $0.24 Beats Our Estimate

4QFY24 adjusted EPS of $0.24 beat our estimate of ($0.08) on much stronger-than-expected margins despite the continued weakness in industry-wide...

Water Tower Research

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