Bassett Q1 Net Falls 14 Percent
BASSETT, Va.-Downtrending sales, increased new store-related costs and reduced margins in its wholesale segment combined to slash Bassett Furniture's first-quarter net income by 14 percent, to $843,000.
Net sales in the quarter, which ended on March 1, fell 5.3 percent to $75.6 million. Included in the top-line total was a 5.4 percent decline in sales from Bassett's wholesale segment and a drop of 5.8 percent in sales from its retail segment. The latter sector also posted a gain of 0.6 percent in same-store sales.
Robert Spilman Jr., Bassett's president and CEO, said the first quarter brought a slowing of the sales pace the company had enjoyed over the previous quarters. "Though difficult to quantify, we believe that inclement weather hampered sales and deliveries in January and February," Spilman said.
Although selling, general and administrative expenses slipped 0.7 percent in dollars in the quarter, they increased 240 basis points as a percentage of sales to 51 percent. In addition, Bassett reported an increase of 262.3 percent in new store pre-opening costs in the quarter.
Overall gross margin did gain 140 basis points in the quarter, finishing at 53.2 percent. However, gross margin in the wholesale segment was down 100 basis points to 32.4 percent, due to reduced margins on wood and discounting of discontinued products.
Spilman added that "our team remains committed to further execution of our wholesale and retail strategies and continuing our recent trend of operating improvement in 2014."