BASSETT FURNITURE INDUSTRIES INC Q4 FY2024 earnings call

• The company returned to profitability in the fourth quarter after implementing a restructuring plan. - The industry faces challenges due to sluggish home sales, low inventory, and high mortgage rates. - Fourth quarter retail written sales were up 25.1% over Black Friday. Wholesale outdoor orders grew 33%. - Inventory was reduced, with consolidated inventory down over $8M and wholesale inventory down $6.5M. - Expected savings in 2025 compared to 2024 are between $7M and $8M. - New product collections like Copenhagen launched, with others to debut in spring. - E-commerce revenue is growing, with seven consecutive months of sales increases. - Marketing program strengthened, including reintroduction of direct mail. - Bassett Custom Studio program is progressing, with several dealers expanding square footage. - Named Best Custom Upholstery Company.

Wholesale: Net sales decreased $8.3 million or 14% from the prior year period. Gross margin increased 290 basis points. Wholesale backlog at quarter end was $21.8 million. Retail: Net sales decreased $4.8 million or 8% from the prior year period. Written sales declined 0.6%. Gross margin was essentially flat. Retail backlog at the end of the fourth quarter was $37.1 million. Noa Home was closed, with a $2.6 million tax benefit recorded for a capital loss.

• Expected savings in 2025 compared to 2024 are between $7M and $8M. - Fiscal 2025 capital investment range is $8M to $12M, dedicated to store remodels, potential store openings, and technology. - Continue to pay quarterly dividend and repurchase shares opportunistically.

• Persistent sluggish home sales, depleted housing inventory, and higher mortgage rates impacting furniture sales. - Impact of natural disasters like the North Carolina hurricane and California wildfires on operations and dealers.

Q: Comment on trends since the election and the first two months of the fiscal year A: Slight improvement with mid-single-digit growth in December, but no euphoria currently Q: Update on Bassett Design Studio A: Around 43-44, expecting growth in 2025 with more studios planned Q: Highlight of True Custom Upholstery in marketing A: Continue highlighting in stores, and be more aggressive in dedicated distribution opportunities Q: Future gross margins post-housing recovery A: Gross margin likely to stay in current range, focusing on value and SG&A leverage Q: Degree of margin moderation in 2025 A: Slight moderation due to more aggressive pricing and moving clearance goods quickly Q: Impact of natural disasters A: North Carolina hurricane affected operations and dealers; California wildfires affected one store but not major upheaval