Furniture/Furnishings Weekly
For its 4QFY23 (November), Bassett Furniture Industries, Inc. reported a GAAP EPS loss of $0.47 on sales of $94.7 million. GAAP EPS included a goodwill impairment of $0.63. Excluding the impairment, operating EPS was $0.15, ahead of an expected loss of $0.06. Revenue beat analysts’ expectations of $90 million. Sales fell 21.7% Y/Y against a pandemic-inflated year-ago comparison. Management does not provide guidance but noted that wholesale order trends stabilized over the past three quarters. Gross margin improved 120 bps Y/Y, as input costs stabilized. Bassett wrote off $5.4 million of goodwill from the 2022 acquisition of Noa Home Inc, a Canada-based internet retailer. For its 2QFY24 (December) Ethan Allen Interiors, Inc. reported adjusted EPS of $0.67 on $167 million in revenue. Results missed published expectations of $0.76 and $179.2 million. Margins improved sharply versus the prior year. Gross margin improved 500 bps to 60.2% and operating margin rose 450 bps to 12.8% despite volume deleverage. Management noted improved written order trends in December. The consumer sector outlook is improving, according to FactSet’s StreetAccount summary of commentary for Hardlines/Broadlines. The 2024 outlook is the most bullish it’s been in years. Analysts are “expecting a rebound for the segment given that margins have largely bottomed with sales likely to inflect and/or accelerate given the more normalized demand.” In what may be a boon to post-pandemic return-to-office (RTO), new research shows that face time in the office helps shield employees from layoffs. Fully remote employees were 35% more likely to be laid off in 2023, according to a study cited by The Wall Street Journal (1/26/24). It makes sense, as managers, being human, have a harder time firing/laying off those they see than those they don’t. More about RTO. The Kastle Systems RTO Index was lower for the week ending January 17, which is the most recent data. That mid-January period coincides with waves of extreme cold and storms across the Midwest and East. We suspect lower office attendance numbers were likely weather related, not a trend.
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