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Bassett (BSET) to Post Q4 Earnings: What's in the Offing?

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Bassett Furniture Industries, Incorporated’s (BSET - Free Report) fourth-quarter fiscal 2021 earnings and revenues are expected to have decreased on a year-over-year basis, thanks to raw material shortages, escalating labor and commodity costs, severely compromised logistic capabilities, and increasing COVID-19 OMICRON variant threat.

In the last reported quarter, the company’s earnings were in line with the Zacks Consensus Estimate but increased 40.9% from the year-ago quarter. Net sales topped the consensus mark by 5.7% and increased 29.9% from the prior-year level.

Its earnings surpassed the consensus mark in each of the trailing six quarters.

Trend in Estimate Revision

The Zacks Consensus Estimate for Bassett’s fiscal fourth-quarter earnings has declined 6.3% to 45 cents per share over the past 30 days. The estimated figure indicates a 30.8% decline from the year-ago earnings of 65 cents per share. The consensus mark for revenues is $115.43 million, suggesting 2.5% year-over-year fall.

Factors to Note

Bassett’s business is expected to have witnessed lackluster sales performance in fourth-quarter fiscal 2021 owing to existing supply-related issues, inflationary pressure and risk of the new COVID-19 variant. Although the company introduced four regular price increases during the fiscal year to avoid the increased cost of raw materials and freight, supplier-related price escalation is putting pressure on the bottom line.

Nonetheless, BSET has been investing in upgrades to the plant and equipment in its manufacturing footprint to provide a better work environment for the associates and improve efficiency. The company has been formulating a new warehousing and logistics architecture that will help improve services. Also, its digital transformation program and in-store retail experience have been encouraging.

The Zacks Consensus Estimate for Furniture and accessories sales (accounting for 88.2% of total third-quarter fiscal 2021 revenues) is pegged at $109 million, indicating an increase of 3.8% from $105 million in the year-ago period.

The consensus estimate for sales from Logistical services (11.8%) is pegged at $13.69 million, indicating 5.4% growth from the prior-year quarter.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for Bassett this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -21.35%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Leggett currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With Favorable Combination

Here are some companies, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Boise Cascade Company (BCC - Free Report) has an Earnings ESP of +3.21% and a Zacks Rank #2.

Shares of Boise Cascade have gained 44.5% over the past year. BCC’s earnings topped the consensus mark in all the last four quarters, with the average being 45.5%.

United Rentals, Inc. (URI - Free Report) has an Earnings ESP of +1.34% and a Zacks Rank #2.

Shares of United Rentals have gained 28.5% over the past year. URI’s earnings topped the consensus mark twice but missed the same on the other two occasions, with the average surprise being 5.7%.

Vulcan Materials Company (VMC - Free Report) has an Earnings ESP of +6.01% and a Zacks Rank #2.

Shares of Vulcan Materials have gained 19.4% over the past year. VMC’s earnings topped the consensus mark twice but missed the same on the other two occasions, with the average surprise being 15.9%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.