BSET - Earnings call transcript Q4 2024 | Bassett Furniture Industries, Incorporated

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Operator

Good day, and thank you for standing by. Welcome to Bassett Furniture Quarter 4 2024 Earnings Conference Call. [Operator Instructions] Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mike Daniel, CFO. Please go ahead.

John Daniel

Thank you, Gigi, for the introduction. earnings the Furniture's November quarter Bassett XXXX. XX, to call fourth for ending Welcome

is and up closed our issued today will today's me Joining Chairman quarter, our Q&A release on website. we after session. remarks available about our the CEO, yesterday the a it's market call and open our After for news Spilman. We Rob

call call. We will of site this within investor post the on transcript XX our of the hours

estimate risks These considered today's harbor uncertainties update Reform call, materially we statements or nor cause Act and results undertake that the provision any and cannot During such Litigation made accuracy agree Securities involve cannot company the of actual make may of guarantee forward-looking could XXXX. to forward-looking from or inherently be management's statements of statements. does certain to obligation pursuant Private it safe to The differ the present forecast any are view.

important on SEC be available the week. corporate including related XXXX, our see to filings cautionary filed please for information, business our to ending risks XX, website. on year the with XX-K more fiscal Other Form For November notes, report describing next annual are company's the

it quarter. over for Now I'll the fourth Rob turn about Rob? comments to

Robert Spilman

thank Thank us you, you everyone, Mike. Good today. morning, and joining for

then. We announced Our since been home furniture plan that rates, sales industry and sales, appropriate housing inventory and comprehensive business in restructuring has sluggish in higher long the July, we've through steps right-size mortgage interest our lagged quarter. been with depleted fourth housing persistent took tied we XXXX executing to a in and levels to of again

profitability are pleased to for quarter. this to We returned have Bassett

evaluate housing of continue mindset ongoing to restructuring efficiency, XX ago. components complete environment. amount at basis. they an plan run major cost at run while sales home structure to navigate In the can challenging of our November, were significant in end our on XXXX, for analyzing the focus we were leaner a years on influencing We our leveraging While XXXX, the of smarter business ongoing business increasing and existing our a we time opportunities level how the we were

is of enable Industry so to plan Our year existing uptick XXXX, business. search to in elusive strategic forecasts demand planning only demand. better industry in home bottoming of sales to another our a of our point out we entire slight the weather of tepid the prepared for

results me Let the of to quarter. details now turn fourth more on the

with X.XXX% the by customer the quarter, orders although stores reduction wholesale was the for were were We better were sales XXXX. for orders by quarter, last were generating exciting XX%. X.X% down segment, fourth for for pleased over XX.X% the by an X.X% backlog consolidated year's over inventory majority retail the of and orders deposits X-week outdoor Friday written sales Black while ]. down aggressive attributed of written our While the Wholesale up only increased sales strong begin corporate nevertheless received by to period. this year's retail only this wholesale promotion, by The quarter, comparison quarter's decline where from last performance wholesale representing Level. Total [ XX% year's a decreased X.X% to Club program to of promotion, grew

in majority million. inventory, business As a million wood we which proven restructuring further quarter. and XX consolidation past because Noa year. profitability in manufacturing in surface the Other no to is basis the are to while level Canada maintaining at the $X e-commerce to efficiency at begun place from to in in now innovation of inventory period, newness that at energized associated and Wholesale in into run our drive the we're we better losses business The domestic The will XXXX. $X.X end operating and see about Club the our disruption domestic year's rightsizing in as wood compared customer to XX We've yield on down delivery of and remaining implemented. the putting our due were can warehouse for mentioned, the thing X-week down a quarter of future. Though in Home, The have taken home components benefits. moved warehouse We've than bold our facilities believe plant reduced our to and primary consolidation. We last and a is with plan closed come Level. been financial fourth was have to have benefits consolidated more gains operated plan consolidation increased was began facility of We headquartered to results the delivery steps our quarter costs end P&L our and was the leaner planned. improvements business efficiency our cycles. higher from further from commitments organization and on XXXX improvements X-week our retail

on addition makeovers our We review and our all XXXX. In of the last we product extensive assortment. cutting, retail the market in planned major hit X line -- collection cost home year an to casegoods retail embarked whole of to significant began

of ] bedroom, additional and retail has and performing collections, cover for well already. our and options sales a but the collection increases e-commerce collections merchandising. consecutive Andora debut the is and through of spring. modern stores dining, had of The business, be terms of Two months XXXX. we've small first, Danish to occasional will X weeks been All entertainment these will growing, investments X in continue retail of X Newbery [ this percentage inspired in benefit in end our Copenhagen transformational is and our very we've sales, revenue The and overall to bassettfurniture.com that visual our made still change

distribution the from and furniture. retail our of quarter, wholesale that items fourth entering value in messaging last more price no is store the Studio, based square customers to into foot designers to program the presentation experience e-commerce revenue months are events for compared retailer Custom the and more interaction marketing quarter of in-store with The inventory. in are Our with telling resonating X driving a annually a are mail on delivered and brand be XXXX. like Custom latest specific we're plan year Bassett the our progress. and higher particularly us which about will about independent mind the which footprint on Early dedicate to requires order price dedicated we've in Fourth Upholstery We XX% and major comes True new user XX% this an annual of the traffic traffic, investments and to program, this Copenhagen, focus backup their values, with direct are product requirements mail mix up our to the and website. in direct concepts. on our in response our positive strengthened program the We is returns. marketing it furniture frequently indicates of with X,XXX drive for Newbery. Approximately XXXX and and launches our communicating our reintroduced prescribed value use one our excited began Andora consumers basis

of that Annual that investment and teammates our it. reinforces Survey. underscores dealer in to furniture with several that beyond than increase dedicated changed mention the footage potential, and accomplishments decisions, This recognition to our so we associates square equate Company generate reputation With will many plan the of great to ago. is this expanded who This True the fewer Upholstery implementation square earn deny the really Furniture team At industry many was it the want brand. I continue mindset offers year in named of high restructuring floor a business, the but commitment have company. has working as Custom it can Bassett respect Custom the brand a of relatively customers small and the also no to the number samples. Program smaller and rate run options pride of difficult per the the XX% dealers quality foot know inexpensive as the our had space, Reader those and that fabric Today's to of design XXXX inventory in in a being general has to already a We Best not I year-end, sales studios to challenging. frame we result Bassett made a the with the year. feels

priority delivering Our is well our we to newness ensure that to operations continually as are review customers. innovation for and efficiency driving as

mortgage some and or on crystal for remodeling housing don't market leases which are projections are will stores, we rates XXXX. investing late are year XXXX open to ball negotiating the be. a or have in We in expected this X where early for We others,

XX, our On share of January the similar we for to and our last points that dividend believe with new to leaner to our regular through opportunistic plan, growth $X.XX model share, operating repurchases. shareholder committed we and said As But future. industry data returns I remain per earlier, and quarterly is Bassett to year. Board we positioned well trends announced features dividends a approved

over for financials. Mike? I'll Now turn details to things Mike back more our on

John Daniel

of discuss Rob. the otherwise Thanks, fourth noted. XXXX, of quarter comparisons compared will to I commentary, be fiscal will fiscal the fourth quarter the my In unless XXXX

XXX stores. decrease in product, in For in our gross Level margins upholstery an in million XX% to wholesale sales consolidated margins to or from decrease due our quarter, $XX.X Club company-owned basis with fourth points improved better the coupled total our primarily Consolidated and domestic wholesale due increased margins better operation. declined manufacturing primarily in XX%, revenue segment the a through retail X.X% margins sales

aggressive of a consolidated a to during with of pleased with fourth we more our do we're mentioned Although earlier. We consolidated reported be XXXX we loss the for will $X.X expect that pricing million side, margins operating Rob XXXX. the as expectation gross the on moderation due quarter, $XXX,XXX to compared very quarter during retail of income slight the strong

XXXX to However, XXXX. of for $XXX,XXX or the would for if have normalize charges, X.X% operating for or compared X.X% the as million income $X.X income both of operating special and sales been XXXX you sales

$X.X the Net market, expected Venture. Gross our prior decreased for a prior basis Now to improved Lane shipments primarily I'll from period over in offset XX% XXX year wholesale partially XX, for provide in mix in sales operation. year, the shipments the decrease XX% by primarily network due the in margin the business information the XX% Level due regarding the the and a and increased or increase X November open the of store million improvement points Lane Venture Club to ended both months XXXX, customers for operations.

of expenses due from reductions cost fixed implementing SG&A SG&A slightly lower expense year-over-year, percent decreased end Wholesale to the from million as offset of of both our sales increased the backlog costs the deleverage restructuring by to plan. partially end and at of million $XX.X was of sales as XXXX. $XX.X end quarter Although a volumes, fiscal the third quarter compared at XXXX

million Now Net moving operations. sales the retail period. on our year $X.X to from prior or X% decreased store

Rob said, prior sales, was quarter As sales value margins written margin essentially Gross offset taken declined goods. as in-line but not lower X.X% the the delivered, margins year by compared clearance flat improved period. to were for the orders on of

our working we've Rob aggressively unproductive which of restructuring plan. been As inventory, through mentioned, was part

at SG&A reductions of Although SG&A by the million at from the sales partially end as slightly was from lower cost year-over-year, XXXX. to fixed and of at expense increased million of decreased backlog the expenses of $XX.X deleverage our fiscal quarter sales third quarter end due a again, the volumes, compared costs the end plan. Retail implementing to of million $XX.X $XX.X percentage restructuring offset fourth

for mentioned, end closed, loss we recorded but associated Home. it fourth and Rob in with of the cumulative million capital was a the benefit by a investment has $X.X tax quarter, been Noa As Noa Home the closed

year. that the paid capital XXXX As cash the recorded to part capital Zenith be for large to will against deducted only XXXX of in be extent gain sale use file an losses loss the that gains, the Logistics we amended on can for return that of able we of recapture and and

the the fourth Let's and capital sheet of short-term cash no We million ended flow operating debt. quarter cash investments generated in quarter. and the with in We $XX.X million cover outstanding allocation. $X.X with balance

As on progress year. Rob the discussed, the we've half made plan over restructuring the significant back of

above million. and slightly savings been have compared XXXX date million XXXX to savings should be $X expected in to million, $X between $X Although

spending quarter's last our mentioned potential million reduced fiscal quarter million. capital and spend retail as XXXX, well capital in store $X.X Rob fourth we the Fiscal a primarily of capital majority was projected store will and between store closed remodels remodels. have and be in million. This report, mentioned range to investment technology. existing and The with that As of $X the as XXXX of openings on the outlay previously dedicated $XX in we openings investments

repurchase We pay dividends XXXX. and during spent dividend continue $X.X on buybacks shares share and quarterly our $X.X on to We million opportunistically. million

returns goal to Our is to provide shareholders. good Bassett

condition us platform a provides financial Our -- solid to service and of our all with remains serve obligations.

questions. we'll the please so. for line Gigi, up Now provide open to instructions do

Operator

Our first question line Co, from from Sidoti LLC. Anthony Instructions] [Operator Lebiedzinski the of comes &

Anthony Lebiedzinski

first, profitability sales, touched know so balance you and returning see to So the to sheet. Bassett a I written great see good improving. that also relatively strong on to maintaining

Just sales -- what guess you're guess, to that overall Also other or of I X months an comment get first we've year, could some on curious it's seen, great be wondering that. the companies the you've business that from the if your thus update you relatively overall, you just seen fiscal written would I in seeing as better on to trends seeing, just guys have new far, heard whether election. since trends. what

Robert Spilman

Okay. Rob. Anthony, this is

Since where now a So out, our year time, in seemed brief like settled the were of was right that -- a down December. as we've X-week to -- own say we was, got we election. calendar, would extent. year and this after we that course, it was fiscal X we back certain a a period And it and that qualify saying euphoria of kind We we Black by as that to was pointed X-week. Friday, mentioned, a around of it last I'll

week But we And in of with. kind the to -- December. trend up less I'm retail. deal seeing. that were So that's X we're digits at we mid-single had about we're talking

seeing we're say there of euphoria when sense not the And but moment, so better. I where little out were, but we better, slightly a a at

Anthony Lebiedzinski

good, Little better certainly. sounds

have an one as place many So 'XX? fiscal update And how Design far now? of Studios. as in is of have number have if to like give plan design you you the your you expectation of by us what Bassett studios you that highlighted Can those as those you to end

Robert Spilman

that the want Well, ] day, it, in think day dealers per in X are changes X many able of from we those get say be going we've of of we're around report lot course, I'm have are amount in to as but been program, how months, pace, from -- field. getting we And we to to the we at or expect have now XX but we're to not things. about and Honestly, about we don't this [ terms interest to It a sure of opening month. in year-end, XX you of going it to XXXX. that continue I we significantly grow the

Anthony Lebiedzinski

the about efforts It Got you. talked guys you you had. Upholstery about Good. have the you've then certainly True And have Custom comment for like sounds those on your been program furniture recognized guys today. based

like direct that mail, messaging, think you so do of whether you it's do more Now plan that? of else something highlight highlight plan you to I marketing said, you'll is more this terms anything in or you that to to your think

Robert Spilman

definitely the business, we've their there done some I only out interested company we say community Studio, with -- in and trade with don't states the would a Anthony, about store think are were conjunction which them in long a let's in time. I and in we Custom that haven't maybe -- we're dealers And a And we not done lot think of advertising, of a there's stores. say. half we

retail a this to years. communicate lot a think we concept how is, been number there's has of strong of Custom for a Upholstery of our just which so And hallmark opportunity

highlight to also but stores on always, So yes, will opportunities. we're the to aggressive competencies our in dedicated as Custom True in little continuing more field our a the going be out we in distribution be there

Anthony Lebiedzinski

And you. before I others. pass it to Got my last then on question

because being recover moderate So was that potential we you how That should future? margins QX. to obviously, expect some the gross said, pricing. when does in mentioned a at margin in know the bit you point, housing impressive think about that I gross of

Robert Spilman

an high, think, it from question Well, we're all-time I the ]... [ wouldn't like answering almost

John Daniel

Yes.

Robert Spilman

we still to So I -- think think leverage we don't really and comes back. significantly where and climbing if even want we plan. the we beyond are want better see SG&A to volume that offer have can them housing to I value, We operating That's margins. lower the

very to we offering are think focused we really communicating the X value We now for We but environment given to our that. want on start customers. years have, good

this think I gross to to had So guess. if in the I kind going is margin of stay neighborhood,

Operator

Research. Gordon Our from Brian from Tower line next of Water question comes the

Michael McCormack

McCormack Mike from Water It's Tower.

the Just a margin on little color commentary. more

You a year. step back, hint you a just go guess, like? that as on what degree we forward I talked look Can us about this might give

John Daniel

-- that one What Mike? more Ask time.

Michael McCormack

you margins very obviously taking Yes, a about gross impressive, maybe talked were back. but step

John Daniel

mean... I Right. Right.

Michael McCormack

trying to look Just might get what that for a like. sense

John Daniel

Yes. I'd aggressive things, we stores as making moving that aggressive we related say, them little to, think we we're well, need pricing quickly as we're as in -- going to be more or a moving more our well on bit retail to get clearance as sure again, through as X retail through. get to goods alluded

us times, warehouses. get as to sits As does valuable it Rob has inventory in more not said many

want make moving that just sure we're that to we So through.

it of see pressures we kind. particularly comfortable those again, going not -- But as a shift not But have the we of what going to are record going going not it's added be not the But the to to a to do be and to any did that's be sustainable consider be with on Now we margin. those much that margin. proud to we just a -- don't say drastic -- pressure that be fact are together on that that's we margins.

Robert Spilman

it's talking this rise I moderate see question, -- been don't continuing would to think, huge by design. not not a that's to Mike, we drop similar but Mike we continuing although, as much margin, trend Anthony's don't we're about to necessarily, we're want see that I we this it, year, And think, said, but trend going It's it slightly. on we've decline add, and it to -- in this don't I either.

really. we're -- setting expectations just it's So

John Daniel

right. That's

Michael McCormack

wildfires, And the disasters on Understood. business? the hurricanes natural just and then guess the between any affecting the I

Robert Spilman

our in the strong mean Carolina North to close caused few hurricane dealer Carolina. down operations in very days couple in I in a a we base there a a back area we South Hickory The area. was and cetera. an Also, for -- had of independent September -- have areas affected et that days, strong effect. too, very Carolina, North That's other it

So business. affected that incoming our lot dealers a that, were and of by our hurt

of As we for shut tragedy, a there whole caused to far it one lot to that But had that out few store our a California fire days. wouldn't the upheaval as down say operations. I have did

Operator

this conference CEO, time, At turn the to back remarks. to would Rob I for Spilman, over now like and closing Chairman

Robert Spilman

your Thank structure We're cost that year. Bassett quarter. our you, that your for questions. decisions and road growth-driving We deliver delivered the will interest fourth customers Gigi, initiatives that on profitability. for and We this our rightsize put the and everyone shareholders know us our in to in for thank improve to optimistic

a collections, dedicated and distribution you have much, We strengthening and our price our messaging. value are very excited great Thank day. site reaching programs and about consumers more through our e-commerce new

Operator

conference call. today's concludes you for Thank This participating.

You disconnect. now may

Bassett Furniture Industries (BSET) 30 Jan 252024 Q4 Earnings call transcript