BASSETT, Va. – Bassett Furniture Industries Inc. reported an increase in sales and net income for the first quarter ended Feb. 27.
The company said that consolidated sales totaled $113.7 million, up 1.4% from the $112.1 million reported in the first quarter of 2020.
Net income totaled just over $4 million, or 40 cents per share, compared to $1.2 million, or 12 cents per share reported in the first quarter of 2020. Operating income totaled just over $6 million, compared to $2.2 million in the same period last year.
The company’s wholesale division had the biggest increase in sales. Meanwhile it experienced declines in its retail and logistical services segments.
For example, wholesale sales rose 8.3% to $70.3 million, compared with $65 million during the first quarter of 20202.
By comparison, sales in the retail segment fell 8.3%, to $60.4 million, compared with $65.8 million in the same period last year. Logistical services revenues fell 5.8%, to $20.1 million, from $21.3 million last year.
These numbers occurred despite a 44% year over year increase in net orders, with all segments experiencing an increase. However, major challenges with the supply chain have resulted in an inability to convert these orders into sales.
“We are battling every day with the broken supply chain that is affecting the entire industry’s ability to produce and ship furniture and with rampant inflation that is permeating virtually every form of raw material in our manufactured and imported goods,” said Robert H. Spilman, chairman and CEO. “Despite the headwinds, consolidated revenue grew by 1.4% in the period and operating income increased by 172% to $6 million.”
Spilman said the “sell, then make” model has put the company at “somewhat of a disadvantage” during the ongoing pandemic in 2020 and early 2021. For example, he noted, that 80% of the company’s furniture products are selected by consumers before they are produced.
“This is in stark contrast to the vast majority of U.S. furniture retailers that derive most of their revenue from goods that have already been made and reside in their warehouses ready for delivery,” he said. “Upon receipt of the sales order, our merchandise is scheduled and entered into production. Prior to the outbreak of the pandemic, our production cycle on these custom-made goods was generally two to three weeks.
“Unfortunately, the combination of surging orders and the inability of our long-time suppliers to reliably provide us with fabric, foam, birch plywood, etc. … has ballooned our wholesale backlog to $67.5 million at quarter end, or 362% more than last year at this time. Continued strong orders have elevated the backlog by another 8% through four weeks of March.”
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April 01, 2021 at 09:40PM
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Bassett Furniture reports increase in Q1 sales, income - Furniture Today
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