BASSETT, Va. – Home furniture manufacturer and retailer Bassett Furniture reported $121 million in fourth-quarter consolidated sales, up 5.6% year-over-year and up 3% from the third quarter.
Retail sales reached $76.3 million for the quarter, up 14.9% from last year’s $66.4 million. Wholesale sales of $74.6 million represented a 1.6% drop from last year.
“We received revenue of $121 million in our fourth quarter, up 5.8% in an increasingly difficult macroeconomic environment as we enter another year,” said Robert Spilman, CEO. “Operating profit of $6.7 million was slightly higher than last year, although we made select price adjustments to reduce inventory that hurt our margins. We also invest more dollars in digital marketing to boost our revenue.
“Our company is stronger than when we entered the pandemic three years ago. We have downsized our underperforming stores, properly adjusted our retail cost structure, gained wholesale market share with independent furniture dealers, and further strengthened our strong balance sheet.”
Spilman noted, however, that the year is off to a slow start, with the second half of the fourth quarter showing a decline.
“We recognize that fiscal 2023 has started slowly from a wholesale orders perspective, with sales down 20% YTD for the quarter compared to the robust pace we experienced last year,” he said. “However, quarter-to-date shipments are down 10% as fourth-quarter orders declined modestly.”
Spilman noted decreased backlogs, increased domestic upholstery operating margins, reductions in raw material prices, and a more normalized wholesale and supply chain operating environment.
The company’s retail business continued its string of record quarters and was “more profitable than any previous comparable period on record.”
“The year was characterized by a gross margin improvement of 40 basis points to 52.6% and operating profit that more than tripled compared to last year,” he said. “Our retail order backlog remained healthy in the new fiscal year as our Black Friday event was relatively strong. 2023 will see the opening of three new Bassett stores and an extensive remodel of our Austin, Texas location.”
Spilman highlighted the company’s growing e-commerce presence. In the second quarter, Bassett will launch its new website platform, which Spilman said will feature better navigation and enhance e-commerce functionality.
“While this represents the culmination of a multi-year digital transformation plan, it will also provide a platform for closer site integration with our store network and better overall customer and product data that will lead to better decision making,” he said. .
Spilman said the company’s September acquisition of Canadian online furniture retailer Noa Home was not profitable in the quarter, but plans are in place to achieve it.
“We spent the three months scaling the business for growth as we worked to get top-selling products in stock, opened a new 3PL warehouse in Western Canada, and integrated the first Bassett-engineered product into their lineup. Our focus for this year is to continue to expand its lean range and prepare to open up the US market in the fall sales season.”