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Bassett (BSET) Q1 Earnings & Sales Lag Estimates, Down Y/Y

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Bassett Furniture Industries, Incorporated (BSET - Free Report) reported tepid results for first-quarter fiscal 2024 (ended Mar 2, 2024), wherein its earnings and net sales missed the Zacks Consensus Estimate and declined year over year.

The company’s quarterly results were mainly impacted by the challenging sales environment, especially during the last two weeks of January 2024. This downtrend was reflected in soft sales contributions from the Wholesale and Retail segments along with Noa Home.

Furthermore, reduced leverage of fixed costs from decreased sales accompanied by increased startup and retail marketing expenses added to the downtrend and dented the bottom line.

Inside the Headlines

Bassett reported an adjusted loss of 14 cents per share against the Zacks Consensus Estimate of earnings of 1 cent per share. In the prior year period, the company reported adjusted earnings per share of 16 cents.

Net sales of $86.6 million also lagged the consensus mark of $91.5 billion by 5.4% and declined 19.6% from the year-ago quarter’s level of $107.7 million.

Segmental Details

Wholesale: Net sales decreased 21.7% from the year-ago quarter’s level to $54.7 million. The downturn was primarily attributable to a 20% decline in shipments to the open market, a 21% decrease in shipments to the company’s retail store network and a 26% plunge in Lane Venture shipments.

The wholesale backlog at the end of the first quarter of fiscal 2024 was $19.5 million, down 21.7% year over year but up 5.4% sequentially.  

In the quarter, the gross profit margin of this segment was 32.9%, up 200 basis points (bps) year over year. SG&A expenses – as a percentage of net sales – increased 250 bps to 20.5% compared with the year-ago period.

Retail: The segment's net sales dwindled 17.3% from the year-ago quarter’s figure to $53.8 million.

Retail backlog at the end of the quarter was $31.3 million, down 25.1% year over year but up 1.3% sequentially.  

During the quarter, the gross profit margin of this segment was 54%, up 110 bps year over year. SG&A expenses – as a percentage of net sales – increased 640 bps to 57% compared with the year-ago period.

Corporate & Others: Net sales in the segment declined 36.9% from the year-ago quarter’s level to $1.9 million.

Financials

As of Mar 2, 2024, Bassett had cash and equivalents worth $40.6 million, down from $52.4 million recorded at the end of fiscal 2023. Short-term investments at the end of the first quarter of fiscal 2024 were $17.8 million, at par with fiscal 2023 end.

Long-term debt (a portion of operating lease obligations) totaled $95.3 million, down from $97.4 million recorded at fiscal 2023 end.

Net cash used in operations for the reported quarter totaled $7.7 million against $0.6 million reported in the year-ago period.

Zacks Rank & Key Picks

Bassett currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the Consumer Discretionary sector.

Strategic Education, Inc. (STRA - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

STRA has a trailing four-quarter earnings surprise of 17.2%, on average. The stock has gained 12.7% in the past year. The Zacks Consensus Estimate for STRA’s 2024 sales and earnings per share (EPS) indicates an increase of 5% and 24.5%, respectively, from the year-ago levels.

Adtalem Global Education Inc. (ATGE - Free Report) currently sports a Zacks Rank of 1. ATGE has a trailing four-quarter earnings surprise of 16.9%, on average. The stock has increased 34.8% in the past year.

The Zacks Consensus Estimate for ATGE’s fiscal 2024 sales and EPS implies growth of 6.4% and 10.2%, respectively, from the year-ago levels.

Ralph Lauren Corporation (RL - Free Report) presently sports a Zacks Rank of 1. RL has a trailing four-quarter earnings surprise of 18.7%, on average. The stock has risen 52.1% in the past year.

The Zacks Consensus Estimate for RL’s fiscal 2025 sales and EPS implies growth of 4.2% and 9.5%, respectively, from the year-ago levels.

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