Bassett Furniture Industries Inc 10-Q for FY2026 Q2
Bassett Furniture Industries Inc (BSET)
About this 10-Q
Bassett Furniture Industries Inc filed this 10-Q on July 1, 2026, covering the quarter ended May 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended May 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $83.75M
- down 0.7% from $84.35M a year earlier
- Net income
- $2.04M
- up 6.3% from net income of $1.92M a year earlier
- Diluted EPS
- $0.24
- up 9.1% from $0.22 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
OR
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________________ to _______________________
Commission File No.
(Exact name of Registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Zip Code)
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol |
Name of exchange on which registered |
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☐ | ☒ | |
| Non-accelerated Filer | ☐ | Smaller Reporting Company | |
| Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
At June 26, 2026
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
TABLE OF CONTENTS
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ITEM |
PAGE |
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PART I - FINANCIAL INFORMATION |
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1. |
Condensed Consolidated Financial Statements as of May 30, 2026 (unaudited) and November 29, 2025 and for the three and six months ended May 30, 2026 (unaudited) and May 31, 2025 (unaudited) |
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Condensed Consolidated Statements of Income |
3 |
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Condensed Consolidated Statements of Comprehensive Income |
4 |
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Condensed Consolidated Balance Sheets |
5 |
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Condensed Consolidated Statements of Cash Flows |
6 |
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Notes to Condensed Consolidated Financial Statements |
7 |
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2. |
Management's Discussion and Analysis of Financial Condition and Results of Operations |
21 |
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3. |
Quantitative and Qualitative Disclosures About Market Risk |
32 |
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4. |
Controls and Procedures |
32 |
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PART II - OTHER INFORMATION |
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1. |
Legal Proceedings |
33 |
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2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
33 |
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3. |
Defaults Upon Senior Securities |
33 |
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5. |
Other Information |
33 |
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6. |
Exhibits |
33 |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED MAY 30, 2026 AND MAY 31, 2025 – UNAUDITED
(In thousands except per share data)
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Quarter Ended |
Six Months Ended |
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May 30, 2026 |
May 31, 2025 |
May 30, 2026 |
May 31, 2025 |
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Net sales |
$ | $ | $ | $ | ||||||||||||
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Cost of goods sold |
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Gross profit |
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Selling, general and administrative expenses |
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New store pre-opening costs |
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Income from operations |
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Interest income |
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Other income (loss), net |
( |
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Income before income taxes |
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Income tax expense |
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Net income |
$ | $ | $ | $ | ||||||||||||
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Basic earnings per share |
$ | $ | $ | $ | ||||||||||||
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Diluted earnings per share |
$ | $ | $ | $ | ||||||||||||
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Regular dividends per share |
$ | $ | $ | $ | ||||||||||||
The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.
PART I – FINANCIAL INFORMATION – CONTINUED
ITEM 1. FINANCIAL STATEMENTS
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE PERIODS ENDED MAY 30, 2026 AND MAY 31, 2025 – UNAUDITED
(In thousands)
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Quarter Ended |
Six Months Ended |
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May 30, 2026 |
May 31, 2025 |
May 30, 2026 |
May 31, 2025 |
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Net income |
$ | $ | $ | $ | ||||||||||||
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Other comprehensive income (loss): |
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Amortization associated with supplemental executive retirement defined benefit plan (SERP) |
( |
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Income taxes related to SERP |
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Other comprehensive loss, net of tax |
( |
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Total comprehensive income |
$ | $ | $ | $ | ||||||||||||
The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.
PART I – FINANCIAL INFORMATION – CONTINUED
ITEM 1. FINANCIAL STATEMENTS
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
MAY 30, 2026 AND NOVEMBER 29, 2025
(In thousands)
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(Unaudited) |
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May 30, 2026 |
November 29, 2025 |
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| Assets | ||||||||
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Current assets |
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Cash and cash equivalents |
$ | $ | ||||||
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Short-term investments |
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Accounts receivable, net |
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Inventories |
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Recoverable income taxes |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Deferred income taxes |
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Goodwill |
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Intangible assets |
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Right of use assets under operating leases |
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Other |
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Total long-term assets |
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Total assets |
$ | $ | ||||||
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Liabilities and Stockholders’ Equity |
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Current liabilities |
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Accounts payable |
$ | $ | ||||||
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Accrued compensation and benefits |
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Customer deposits |
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Current portion of operating lease obligations |
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Other current liabilites and accrued expenses |
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Total current liabilities |
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Long-term liabilities |
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Post employment benefit obligations |
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Long-term portion of operating lease obligations |
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Other long-term liabilities |
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Total long-term liabilities |
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Stockholders’ equity |
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Common stock |
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Retained earnings |
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Additional paid-in capital |
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Accumulated other comprehensive income |
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Total stockholders' equity |
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Total liabilities and stockholders’ equity |
$ | $ | ||||||
The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.
PART I – FINANCIAL INFORMATION – CONTINUED
ITEM 1. FINANCIAL STATEMENTS
BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS ENDED MAY 30, 2026 AND MAY 31, 2025 – UNAUDITED
(In thousands)
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Six Months Ended |
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May 30, 2026 |
May 31, 2025 |
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Operating activities: |
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Net income |
$ | $ | ||||||
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
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Deferred income taxes |
( |
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Other, net |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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Inventories |
( |
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Recoverable income taxes and other current assets |
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Right of use assets under operating leases |
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Customer deposits |
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Accounts payable and other liabilities |
( |
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Obligations under operating leases |
( |
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Net cash provided by operating activities |
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Investing activities: |
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Purchases of property and equipment |
( |
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Cash paid for licensee acquisition |
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Other |
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Net cash used in investing activities |
( |
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Financing activities: |
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Cash dividends |
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Other issuance of common stock |
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Repurchases of common stock |
( |
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Taxes paid related to net share settlement of equity awards |
( |
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Repayments of finance lease obligations |
( |
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Net cash used in financing activities |
( |
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Change in cash and cash equivalents |
( |
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Cash and cash equivalents - beginning of period |
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Cash and cash equivalents - end of period |
$ | $ | ||||||
The accompanying notes to condensed consolidated financial statements are an integral part of the condensed consolidated financial statements.
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) for complete financial statements. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.
References to “ASC” included hereinafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative GAAP.
The condensed consolidated financial statements include the accounts of Bassett Furniture Industries, Incorporated (“Bassett”, “we”, “our”, or the “Company”) and our subsidiaries, all of which are wholly owned. In accordance with ASC Topic 810, we have evaluated our licensees and certain other entities to determine whether they are variable interest entities (“VIEs”) of which we are the primary beneficiary and thus would require consolidation in our financial statements. As of and for the periods ended May 30, 2026 and May 31, 2025 and as of November 29, 2025 we have concluded that none of the evaluated entities represent VIEs.
Revenue from the sale of furniture and accessories is reported in the accompanying condensed consolidated statements of income net of estimates for returns and allowances. We exclude from revenues amounts collected from customers for sales tax.
Certain amounts for the three and six months ended May 31, 2025 have been reclassified to conform to the current year’s presentation. See Note 13, Revenue Recognition.
2. Interim Financial Presentation and Other Information
All intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements. The results of operations for the three and six months ended May 30, 2026 are not necessarily indicative of results for the full fiscal year. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended November 29, 2025. Certain prior period amounts have been reclassified to conform to current period presentation.
Income Taxes
We calculate an anticipated effective tax rate for the year based on our annual estimates of pretax income or loss and use that effective tax rate to record our year-to-date income tax provision. Any change in annual projections of pretax income or loss could have a significant impact on our effective tax rate for the respective quarter.
Our effective tax rate was
Our effective tax rate was
Supplemental Cash Flow Information
During the six months ended May 30, 2026 and May 31, 2025, $
Income tax refunds received (taxes paid), net, during the six months ended May 30, 2026 and May 31, 2025 were as follows:
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Six Months Ended |
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May 30, 2026 |
May 31, 2025 |
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Federal |
$ | $ | ( |
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State |
( |
) | ( |
) | ||||
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Total income tax refunds received (taxes paid), net |
$ | $ | ( |
) | ||||
Interest paid during the six months ended May 30, 2026 and May 31, 2025 was $
Lessor Income
We receive lease income as the lessor on a small number of leased premises which we have subleased to other tenants. Sublease income for closed stores and warehouses is included in selling, general and administrative expense in the accompanying condensed consolidated statements of income and was $
Licensee Acquisition
Effective March 1, 2026, we acquired the operations of the Bassett Home Furnishings (“BHF”) store located in Cherry Hill, New Jersey for an all-cash purchase price of $
The preliminary purchase price allocation was as follows:
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Inventory |
$ | |||
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Customer deposits |
( |
) | ||
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Other current liabilities |
( |
) | ||
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Net assets acquired |
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Goodwill |
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Purchase price |
$ |
The allocation of the fair value of the acquired business was based on a preliminary valuation. Our estimates and assumptions are subject to change as we obtain additional information for our estimates during the measurement period (up to one year from the acquisition date). The primary area of the preliminary allocation of the purchase price that is not yet finalized relates to the estimate of certain accrued liabilities. The inputs into our valuation of the acquired assets reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level 3 inputs as specified in the fair value hierarchy in ASC 820, Fair Value Measurements and Disclosures. See Note 6 regarding the allocation of the goodwill to our reportable segments. The recognized goodwill of $
The acquisition is not material to our condensed consolidated financial statements and, accordingly, pro forma revenue and earnings disclosures are not material and have not been presented. Sales and operating losses generated by the Cherry Hill store subsequent to acquisition were not material for the three and six months ended May 30, 2026. Acquisition costs were immaterial.
New Store Pre-Opening Costs
Income from operations for the three and six months ended May 30, 2026 includes new store pre-opening costs of $
3. Financial Instruments and Investments
Financial Instruments
Our financial instruments include cash and cash equivalents, short-term investments in certificates of deposit (CDs), accounts receivable, and accounts payable. Because of their short maturities, the carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value.
Investments
Our short-term investments of $
4. Accounts Receivable
Accounts receivable consists of the following:
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May 30, 2026 |
November 29, 2025 |
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Gross accounts receivable |
$ | $ | ||||||
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Allowance for credit losses |
( |
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Accounts receivable, net |
$ | $ | ||||||
We maintain an allowance for credit losses for estimated losses resulting from the inability of our customers to make required payments. The allowance for credit losses is based on a review of specifically identified accounts in addition to an overall aging analysis which is applied to accounts pooled on the basis of similar risk characteristics. Judgments are made with respect to the collectability of accounts receivable within each pool based on historical experience, current payment practices and current economic conditions. Actual credit losses could differ from those estimates. We have elected to use the practical expedient under ASC Topic 326 which allows us to assume that current conditions as of the balance sheet date do not change over the expected life of the receivables, which is generally ninety days or less.
Activity in the allowance for credit losses for the six months ended May 30, 2026 and May 31, 2025 was as follows:
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Six Months Ended |
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May 30, 2026 |
May 31, 2025 |
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Beginning balance |
$ | $ | ||||||
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Additions charged to expense |
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Write-offs against allowance |
( |
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Ending balance |
$ | $ | ||||||
Substantially all of the accounts receivable written off against the reserve during the three and six months ended May 30, 2026 and May 31, 2025 originated during our fiscal years ended November 29, 2025 and November 30, 2024, respectively.
We believe that the carrying value of our net accounts receivable approximates fair value. The inputs into these fair value estimates reflect our market assumptions and are not observable. Consequently, the inputs are considered to be Level 3 as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosures.
5. Inventories
Domestic furniture inventories are valued at the lower of cost, which is determined using the last-in, first-out (LIFO) method, or market. Imported inventories and those applicable to our Lane Venture and Bassett Outdoor lines are valued at the lower of cost, which is determined using the first-in, first-out (FIFO) method, or net realizable value.
Inventories were comprised of the following:
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May 30, 2026 |
November 29, 2025 |
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Wholesale finished goods |
$ | $ | ||||||
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Work in process |
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Raw materials and supplies |
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Retail merchandise |
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Total inventories on first-in, first-out method |
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LIFO adjustment |
( |
) | ( |
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Reserve for excess and obsolete inventory |
( |
) | ( |
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| $ | $ | |||||||
We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand, market conditions and the respective valuations at LIFO. The need for these reserves is primarily driven by the normal product life cycle. As products mature and sales volumes decline, we rationalize our product offerings to respond to consumer tastes and keep our product lines fresh. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required. In determining reserves, we calculate separate reserves on our wholesale and retail inventories. Our wholesale inventories tend to carry the majority of the reserves for excess quantities and obsolete inventory due to the nature of our distribution model. These wholesale reserves primarily represent design and/or style obsolescence. Typically, product is not shipped to our retail warehouses until a consumer has ordered and paid a deposit for the product. We do not typically hold retail inventory for stock purposes. Consequently, floor sample inventory and inventory for delivery to customers account for the majority of our inventory at retail. Retail reserves are based on accessory and clearance floor sample inventory in our stores and any inventory that is not associated with a specific customer order in our retail warehouses.
Activity in the reserves for excess quantities and obsolete inventory by segment are as follows:
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Six Months Ended May 30, 2026 |
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Wholesale Segment |
Retail Segment |
Total |
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Balance at November 29, 2025 |
$ | $ | $ | |||||||||
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Additions charged to expense |
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Write-offs |
( |
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Balance at May 30, 2026 |
$ | $ | $ | |||||||||
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Six Months Ended May 31, 2025 |
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Wholesale Segment |
Retail Segment |
Total |
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Balance at November 30, 2024 |
$ | $ | $ | |||||||||
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Additions charged to expense |
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Write-offs |
( |
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Balance at May 31, 2025 |
$ | $ | $ | |||||||||
Our estimates and assumptions have been reasonably accurate in the past. We have not made any significant changes to our methodology for determining inventory reserves in 2026 and do not anticipate that our methodology is likely to change in the foreseeable future.
6. Goodwill
The carrying amounts of goodwill by reportable segment, net of accumulated impairment losses, were as follows:
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Wholesale |
Retail |
Corporate & Other |
Total |
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Balance as of November 29, 2025 |
$ | $ | $ | $ | ||||||||||||
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Goodwill arising from licensee acquisition (Note 2) |
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Balance as of May 30, 2026 |
$ | $ | $ | $ | ||||||||||||
Accumulated impairment losses at both May 30, 2026 and November 29, 2025 were as follows:
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Wholesale |
Retail |
Corporate & Other |
Total |
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Accumulated impairment losses |
$ | $ | $ | $ | ||||||||||||
7. Intangible Assets
Intangible assets at May 30, 2026 and November 29, 2025 consisted of the following:
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May 30, 2026 |
November 29, 2025 |
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Intangibles subject to amortization: |
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Customer relationships |
$ | $ | ||||||
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Less accumulated amortization |
( |
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Intangibles subject to amortization, net |
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Intangibles not subject to amortization: |
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Trade names |
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Total intangible assets |
$ | $ | ||||||
Amortization expense associated with intangible assets during the three and six months ended May 30, 2026 and May 31, 2025 was as follows:
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Quarter Ended |
Six Months Ended |
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May 30, 2026 |
May 31, 2025 |
May 30, 2026 |
May 31, 2025 |
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Intangible asset amortization expense |
$ | $ | $ | $ | ||||||||||||
Estimated future amortization expense for intangible assets that exist at May 30, 2026 is as follows:
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Remainder of fiscal 2026 |
$ | |||
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Fiscal 2027 |
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Total |
$ |
8. Bank Credit Facility
On May 15, 2024, we entered into the Eighth Amended and Restated Credit Agreement with our bank (the “Credit Facility”). This Credit Facility provides for a line of credit of up to $
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● |
Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility) of not less than |
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● |
Consolidated Lease Adjusted Leverage to EBITDAR Ratio (as defined in the Credit Facility) not to exceed |
At May 30, 2026, we were in compliance with the Consolidated Minimum Tangible Net Worth requirement. Since our used commitment was less than $
9. Post Employment Benefit Obligations
Defined Benefit Plans
We have an unfunded Supplemental Retirement Income Plan (the “Supplemental Plan”) that covers one current and certain former executives. The liability for the Supplemental Plan was $
We also have the Bassett Furniture Industries, Incorporated Management Savings Plan (the “Management Savings Plan”) which was established in the second quarter of fiscal 2017. The Management Savings Plan is an unfunded, non-qualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees. As part of the Management Savings Plan, we have made Long Term Cash Awards (“LTC Awards”) totaling $
Components of net periodic pension costs for our defined benefit plans for the three and six months ended May 30, 2026 and May 31, 2025 are as follows:
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Quarter Ended |
Six Months Ended |
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May 30, 2026 |
May 31, 2025 |
May 30, 2026 |
May 31, 2025 |
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Service cost |
$ | $ | $ | $ | ||||||||||||
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Interest cost |
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Amortization of loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Net periodic pension cost |
$ | $ | $ | $ | ||||||||||||
The components of net periodic pension cost other than the service cost component, which is included in selling, general and administrative expenses, are included in other income (loss), net in our condensed consolidated statements of income.
Deferred Compensation Plans
We have an unfunded deferred compensation plan that covers one current executive and certain former executives and provides for voluntary deferral of compensation. This plan has been frozen with no additional participants or deferrals permitted. Our liability under this plan was $
We have an additional unfunded deferred compensation plan maintained for the benefit of certain highly compensated or management level employees which was established under the Management Savings Plan. Our liability under this plan, including both accrued Company contributions and participant salary deferrals, was $
The non-current portion of the obligations under our defined benefit and deferred compensation plans are included in post employment benefit obligations in the accompanying balance sheets as follows:
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May 30, 2026 |
November 29, 2025 |
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Defined benefit plans: |
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Supplemental Plan |
$ | $ | ||||||
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LTC Awards |
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Total defined benefit plans |
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Deferred compensation plans: |
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Management Savings Plan |
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Deferred Compensation Plan |
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Total deferred compensation plans |
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Post employment benefit obligations |
$ | $ | ||||||
The current portion of these post employment benefit obligations totaled $
We recognized expense under our deferred compensation arrangements during the three and six months ended May 30, 2026 and May 31, 2025 as follows:
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Quarter Ended |
Six Months Ended |
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May 30, 2026 |
May 31, 2025 |
May 30, 2026 |
May 31, 2025 |
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Deferred compensation expense |
$ | $ | $ | $ | ||||||||||||
10. Commitments and Contingencies
We are involved in various legal and environmental matters which arise in the normal course of business. Although the final outcome of these matters cannot be determined, based on the facts presently known, we believe that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations.
Lease Guarantees
We were contingently liable under licensee lease obligation guarantees in the amounts of $
In the event of default by the licensee, we believe that the risk of loss is mitigated through a combination of options that include, but are not limited to, arranging for a replacement licensee or liquidating the collateral (primarily inventory). The proceeds of the above options are expected to cover the estimated amount of our future payments under the guarantee obligation, net of recorded reserves. The fair value of these lease guarantees (an estimate of the cost to the Company to perform on the guarantee) at May 30, 2026 and November 29, 2025 was not material.
Lease Commitments
At May 30, 2026, we had a commitment for lease of real property which is expected to commence during fiscal 2026. This lease calls for total annual rents averaging approximately $
11. Earnings Per Share
Basic earnings per common share is computed by dividing net income allocable to common shares by the weighted average number of common shares outstanding, adjusted for participating securities, if any. The following reconciles basic and diluted earnings per share:
|
Net Income |
Weighted Average Shares |
Earnings Per Share |
||||||||||
|
For the quarter ended May 30, 2026: |
||||||||||||
|
Basic earnings per share |
$ | $ | ||||||||||
|
Add effect of dilutive securities: |
||||||||||||
|
Restricted shares |
- | - | ||||||||||
|
Diluted earnings per share |
$ | $ | ||||||||||
|
For the quarter ended May 31, 2025: |
||||||||||||
|
Basic earnings per share |
$ | $ | ||||||||||
|
Add effect of dilutive securities: |
||||||||||||
|
Restricted shares |
- | - | ||||||||||
|
Diluted earnings per share |
$ | $ | ||||||||||
|
For the six months ended May 30, 2026: |
||||||||||||
|
Basic earnings per share |
$ | $ | ||||||||||
|
Add effect of dilutive securities: |
||||||||||||
|
Restricted shares |
- | - | ||||||||||
|
Diluted earnings per share |
$ | $ | ||||||||||
|
For the six months ended May 31, 2025: |
||||||||||||
|
Basic earnings per share |
$ | $ | ||||||||||
|
Add effect of dilutive securities: |
||||||||||||
|
Restricted shares |
- | - | ||||||||||
|
Diluted earnings per share |
$ | $ | ||||||||||
For the three and six months ended May 30, 2026 and May 31, 2025, the following potentially dilutive shares were excluded from the computations as their effect was anti-dilutive:
|
Quarter Ended |
Six Months Ended |
|||||||||||||||
|
May 30, 2026 |
May 31, 2025 |
May 30, 2026 |
May 31, 2025 |
|||||||||||||
|
Unvested shares |
||||||||||||||||
12. Segment Information
We report segment information consistent with the way our chief operating decision maker (the “CODM”), a single individual who serves as our Board Chair, President and Chief Executive Officer, evaluates the operating results and performance of the Company. We have strategically aligned our business into reportable segments as defined in ASC 280, Segment Reporting, and as described below:
|
● |
Wholesale. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations, which includes Lane Venture. |
|
● |
Retail – Company-owned stores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers. |
In addition to the two reportable segments described above, we include our remaining business activities and assets in a reconciling category known as Corporate and other. This category includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefiting both wholesale and retail operations. In addition to property and equipment and various other assets associated with the shared corporate functions, the identifiable assets of Corporate and other include substantially all of our cash and our investments in CDs. We consider our corporate functions to be other business activities and have aggregated them with any of our operating segments that do not meet the requirements to be reportable segments. As of and for the three and six months ended May 30, 2026 and May 31, 2025, Corporate and other included no other operating segments.
Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores. Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has not been realized. These profits will be recorded when merchandise is delivered to the retail consumer. The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate.
For the purpose of evaluating segment performance and allocating resources, our CODM uses a measure of income (loss) from operations excluding special items. These excluded items include such things as asset impairment charges, restructuring charges, and other unusual or infrequent gains and losses which management does not expect to recur on a regular routine basis. During the three and six months ended May 30, 2026 and May 31, 2025, there were no special items recognized in our results of operations. The CODM assesses performance by regularly reviewing each segment’s significant expense categories which include total cost of goods sold and total selling, general and administrative (“SG&A”) expenses. If these significant expense categories deviate from expected results, the CODM will delegate to his direct reports the task of investigating the underlying causes and, when necessary, making recommendations for remedial action to the CODM for his consideration and approval.
The following tables present our segment information:
|
Quarter Ended May 30, 2026 |
||||||||||||||||||||
|
Corporate & |
Intersegment |
|||||||||||||||||||
|
Wholesale |
Retail |
Other |
Eliminations |
Consolidated |
||||||||||||||||
|
Net sales to external customers |
$ | $ | $ | $ | $ | |||||||||||||||
|
Intersegment sales |
( |
) | ||||||||||||||||||
|
Total net sales |
( |
) | ||||||||||||||||||
|
Cost of goods sold |
( |
) | ||||||||||||||||||
|
SG&A expense |
( |
) | ||||||||||||||||||
|
Other segment items - new store pre-opening costs |
||||||||||||||||||||
|
Income (loss) from operations |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
|
Interest income |
||||||||||||||||||||
|
Other income, net |
||||||||||||||||||||
|
Income before income taxes |
$ | |||||||||||||||||||
|
Quarter Ended May 31, 2025 |
||||||||||||||||||||
|
Corporate & |
Intersegment |
|||||||||||||||||||
|
Wholesale |
Retail |
Other |
Eliminations |
Consolidated |
||||||||||||||||
|
Net sales to external customers |
$ | $ | $ | $ | $ | |||||||||||||||
|
Intersegment sales |
( |
) | ||||||||||||||||||
|
Total net sales |
( |
) | ||||||||||||||||||
|
Cost of goods sold |
( |
) | ||||||||||||||||||
|
SG&A expense |
( |
) | ||||||||||||||||||
|
Income (loss) from operations |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
Interest income |
||||||||||||||||||||
|
Other loss, net |
( |
) | ||||||||||||||||||
|
Income before income taxes |
$ | |||||||||||||||||||
|
Six Months Ended May 30, 2026 |
||||||||||||||||||||
|
Corporate & |
Intersegment |
|||||||||||||||||||
|
Wholesale |
Retail |
Other |
Eliminations |
Consolidated |
||||||||||||||||
|
Net sales to external customers |
$ | $ | $ | $ | $ | |||||||||||||||
|
Intersegment sales |
( |
) | ||||||||||||||||||
|
Total net sales |
( |
) | ||||||||||||||||||
|
Cost of goods sold |
( |
) | ||||||||||||||||||
|
SG&A expense |
( |
) | ||||||||||||||||||
|
Other segment items - new store pre-opening costs |
||||||||||||||||||||
|
Income (loss) from operations |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
|
Interest income |
||||||||||||||||||||
|
Other loss, net |
( |
) | ||||||||||||||||||
|
Income before income taxes |
$ | |||||||||||||||||||
|
Six Months Ended May 31, 2025 |
||||||||||||||||||||
|
Corporate & |
Intersegment |
|||||||||||||||||||
|
Wholesale |
Retail |
Other |
Eliminations |
Consolidated |
||||||||||||||||
|
Net sales to external customers |
$ | $ | $ | $ | $ | |||||||||||||||
|
Intersegment sales |
( |
) | ||||||||||||||||||
|
Total net sales |
( |
) | ||||||||||||||||||
|
Cost of goods sold |
( |
) | ||||||||||||||||||
|
SG&A expense |
( |
) | ||||||||||||||||||
|
Income (loss) from operations |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
Interest income |
||||||||||||||||||||
|
Other loss, net |
( |
) | ||||||||||||||||||
|
Income before income taxes |
$ | |||||||||||||||||||
|
Quarter Ended |
Six Months Ended |
|||||||||||||||
|
May 30, 2026 |
May 31, 2025 |
May 30, 2026 |
May 31, 2025 |
|||||||||||||
|
Depreciation and Amortization |
||||||||||||||||
|
Wholesale |
$ | $ | $ | $ | ||||||||||||
|
Retail - Company-owned stores |
||||||||||||||||
|
Corporate and other |
||||||||||||||||
|
Consolidated |
$ | $ | $ | $ | ||||||||||||
|
Capital Expenditures |
||||||||||||||||
|
Wholesale |
$ | $ | $ | $ | ||||||||||||
|
Retail - Company-owned stores |
||||||||||||||||
|
Corporate and other |
||||||||||||||||
|
Consolidated |
$ | $ | $ | $ | ||||||||||||
|
As of |
As of |
|||||||
|
Identifiable Assets |
May 30, 2026 |
November 29, 2025 |
||||||
|
Wholesale |
$ | $ | ||||||
|
Retail - Company-owned stores |
||||||||
|
Corporate and other |
||||||||
|
Consolidated |
$ | $ | ||||||
See Note 13, Revenue Recognition, for disaggregated revenue information regarding sales of furniture and accessories by product type for the wholesale and retail segments.
13. Revenue Recognition
We recognize revenue when we transfer promised goods or services to our customers in an amount that reflects the consideration we expect to receive in exchange for those goods or services. For our wholesale and retail segments, revenue is recognized when the risks and rewards of ownership and title to the product have transferred to the buyer. At wholesale, transfer occurs and revenue is recognized upon the shipment of goods to independent dealers and licensee-owned BHF stores. At retail, transfer occurs and revenue is recognized upon delivery of goods to the customer. All wholesale and retail revenues are recorded net of estimated returns and allowances based on historical patterns. Our accounts receivable, net, which are associated with our wholesale segment, were $
Sales commissions are expensed as part of selling, general and administrative expenses at the time revenue is recognized because the amortization period would have been one year or less. Sales commissions at wholesale are accrued upon the shipment of goods. Sales commissions at retail are accrued at the time a sale is written (i.e. – when the customer’s order is placed) and are carried as prepaid commissions in other current assets until the goods are delivered and revenue is recognized. At May 30, 2026, November 29, 2025, May 31, 2025 and November 30, 2024, our balance of prepaid commissions included in other current assets was $
We exclude from revenue all amounts collected from customers for sales tax. We do not disclose amounts allocated to remaining unsatisfied performance obligations as they are expected to be satisfied within one year or less.
Disaggregated revenue information for sales of furniture and accessories by product category for the three and six months ended May 30, 2026 and May 31, 2025, excluding intercompany transactions between our segments, is as follows:
|
Quarter Ended |
||||||||||||||||||||||||
|
May 30, 2026 |
May 31, 2025 (1) |
|||||||||||||||||||||||
|
Wholesale |
Retail |
Total |
Wholesale |
Retail |
Total |
|||||||||||||||||||
|
Bassett Custom Upholstery |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Bassett Leather Imports |
||||||||||||||||||||||||
|
Bassett Custom Wood |
||||||||||||||||||||||||
|
Bassett Casegoods |
||||||||||||||||||||||||
|
Accessories, mattresses and other (2) |
||||||||||||||||||||||||
|
Consolidated net sales of furniture and accessories |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Six Months Ended |
||||||||||||||||||||||||
|
May 30, 2026 |
May 31, 2025 (1) |
|||||||||||||||||||||||
|
Wholesale |
Retail |
Total |
Wholesale |
Retail |
Total |
|||||||||||||||||||
|
Bassett Custom Upholstery |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
Bassett Leather Imports |
||||||||||||||||||||||||
|
Bassett Custom Wood |
||||||||||||||||||||||||
|
Bassett Casegoods |
||||||||||||||||||||||||
|
Accessories, mattresses and other (2) |
||||||||||||||||||||||||
|
Consolidated net sales of furniture and accessories |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
(1)
(2)
14. Changes to Stockholders’ Equity
The following changes in our stockholders’ equity occurred during the three and six months ended May 30, 2026 and May 31, 2025:
|
Quarter Ended |
Six Months Ended |
|||||||||||||||
|
May 30, 2026 |
May 31, 2025 |
May 30, 2026 |
May 31, 2025 |
|||||||||||||
|
Common Stock: |
||||||||||||||||
|
Beginning of period |
$ | $ | $ | $ | ||||||||||||
|
Issuance of common stock |
||||||||||||||||
|
Purchase and retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
End of period |
$ | $ | $ | $ | ||||||||||||
|
Common Shares Issued and Outstanding: |
||||||||||||||||
|
Beginning of period |
||||||||||||||||
|
Issuance of common stock |
||||||||||||||||
|
Purchase and retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
End of period |
||||||||||||||||
|
Additional Paid-in Capital: |
||||||||||||||||
|
Beginning of period |
$ | $ | $ | $ | ||||||||||||
|
Issuance of common stock |
( |
) | ( |
) | ||||||||||||
|
Purchase and retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Stock based compensation |
||||||||||||||||
|
End of period |
$ | $ | $ | $ | ||||||||||||
|
Retained Earnings: |
||||||||||||||||
|
Beginning of period |
$ | $ | $ | $ | ||||||||||||
|
Net income for the period |
||||||||||||||||
|
Purchase and retirement of common stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Cash dividends declared and paid |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
End of period |
$ | $ | $ | $ | ||||||||||||
|
Accumulated Other Comprehensive Income: |
||||||||||||||||
|
Beginning of period |
$ | $ | $ | $ | ||||||||||||
|
Amortization of pension costs, net of tax |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
End of period |
$ | $ | $ | $ | ||||||||||||
15. Recent Accounting Pronouncements
Effective November 29, 2025, we adopted Accounting Standards Update 2023-07 – Segment Reporting (Topic ASC 280) Improvements to Reportable Segment Disclosures. The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments in this update require: that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss (collectively referred to as the “significant expense principle”); and that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the segment expenses disclosed under the significant expense principle and each reported measure of segment profit or loss. The enhanced disclosures required by ASU 2023-07 are reflected in our segment disclosures in Note 12. The adoption of this guidance related solely to disclosures and did not have an impact upon our financial position or results of operations.
In December 2023, the FASB issued Accounting Standards Update 2023-09 – Income Taxes (Topic ASC 740) Income Taxes. The ASU improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 become effective for us as of the end of our 2026 fiscal year. We are still assessing the impact of this guidance on our disclosures and plan to adopt ASU 2023-09 for our financial statements for the year ending November 28, 2026.
In November 2024, the FASB issued Accounting Standards Update 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic ASC 220-40) Disaggregation of Income Statement Expenses. The amendments in this ASU require a public business entity to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods. The objective of the disclosure requirements is to provide disaggregated information about a public business entity's expenses to help investors (a) better understand the entity's performance, (b) better assess the entity's prospects for future cash flows, and (c) compare an entity's performance over time and with that of other entities. The amendments in ASU 2024-03 will become effective for us for our 2028 fiscal year and for interim periods beginning with our 2029 fiscal year. Early adoption is permitted. We do not expect that this guidance will have a material impact upon our financial position and results of operations.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Safe-harbor, forward-looking statements:
This report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of Bassett Furniture Industries, Incorporated and subsidiaries. Such forward-looking statements are identified by use of forward-looking words such as “anticipates”, “believes”, “plans”, “estimates”, “expects”, “aims” and “intends” or words or phrases of similar expression. These forward-looking statements involve certain risks and uncertainties. No assurance can be given that any such matters will be realized. Important factors that could cause actual results to differ materially from those contemplated by such forward-looking statements include:
|
• |
fluctuations in the cost and availability of raw materials, fuel, labor, delivery costs and sourced products, including those which may result from supply chain disruptions and shortages and the imposition of new or increased tariffs, retaliatory tariffs, duties and trade limitations with respect to foreign-sourced products |
|
• |
competitive conditions in the home furnishings industry |
|
• |
overall retail traffic levels in stores and on the web and consumer demand for home furnishings |
|
• |
ability of our customers and consumers to obtain affordable credit due to increased interest rates |
|
• |
the profitability of the stores (independent licensees and Company-owned retail stores) which may result in future store closings |
|
• |
the risk of additional asset impairment charges arising from the ongoing efforts to consolidate our retail warehouses. |
|
• |
ability to implement our Company-owned retail strategies and realize the benefits from such strategies |
|
• |
effectiveness and security of our information technology systems and possible disruptions due to cybersecurity threats, including any impacts from a network security incident; and the sufficiency of our insurance coverage, including cybersecurity insurance |
|
• |
future tax legislation, or regulatory or judicial positions |
|
• |
ability to efficiently manage the import supply chain to minimize business interruption |
|
• |
concentration of domestic manufacturing, particularly of upholstery products, and the resulting exposure to business interruption from accidents, weather and other events and circumstances beyond our control |
Additionally, other risks that could cause actual results to differ materially from those contemplated by such forward-looking statements are set forth in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended November 29, 2025.
You should keep in mind that any forward-looking statement made by us in this report or elsewhere speaks only as of the date on which such forward-looking statement is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this report or elsewhere might not occur.
Overview
Bassett is a leading retailer, manufacturer and marketer of branded home furnishings. We were founded in 1902 and incorporated under the laws of Virginia in 1930. Our rich 124-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.
Approximately 60% of our wholesale sales arise from our network of 87 Company-owned and licensee-owned Bassett Home Furnishings (“BHF”) stores. Our store program is designed to provide a single source home furnishings retail store with a unique combination of stylish, quality furniture and accessories with a high level of customer service. The stores highlight our custom furniture design and manufacturing capabilities, free in-home or virtual design visits (“home makeovers”) and coordinated decorating accessories. Our philosophy is based on building strong long-term relationships with each customer. Salespeople are referred to as “Design Consultants” and are trained to evaluate customer needs and provide comprehensive solutions for their home decor. Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home or virtual design services for our customers.
Bassett also has a significant traditional wholesale business with more than 1,000 open market accounts. Most of the open market sales are through Bassett Design Centers and Bassett Custom Studios which function as a store within a multi-line store featuring the Company’s custom furniture capabilities. The wholesale business, including the Lane Venture outdoor brand, also services general furniture stores and a growing number of interior design firms through a network of over 30 independent sales representatives who have stated geographical territories. These sales representatives are compensated based on a standard commission rate. The Lane Venture outdoor brand was recently introduced in the Bassett Home Furnishings stores representing a new outlet for that brand.
We consider our website to be the front door to our brand experience where customers can research our furniture and accessory offerings and subsequently buy online or engage with an in-store design consultant. We know that we are driving a significant percentage of the retail foot traffic to our store network and our open market customers through engagement with www.bassettfurniture.com. Digital outreach strategies have been the primary vehicle for brand advertising and customer acquisition. We began supplementing the digital outreach strategy with added direct mail and television late in 2024 and expect to continue with a balanced blend of both digital and traditional direct mail and television in 2026.
We introduced a new web platform late in 2023 that leverages world class features including enhanced customer research capabilities and streamlined navigation. Since the debut of the new site, we have seen increased engagement with the brand through a greater number of page views per customer along with more time spent on the site. We have also seen an increase in average order value that has resulted in increased e-commerce revenue. Building on the 25% increase in web sales for fiscal 2025, written sales orders for the web increased 34% for the six months ended May 30, 2026 while delivered sales increased 30%. Although e-commerce sales continue to be small relative to in-store sales, we will continue to invest in ongoing improvements to the aesthetics and user experience on our website while not compromising on our in-store experience or the quality of our in-home makeover capabilities.
We have factories in Newton, North Carolina that manufacture both stationary and motion upholstered furniture for inside the home along with our outdoor furniture offerings. We have a factory in Martinsville, Virginia that assembles and finishes our custom bedroom and dining offerings. We also have a facility in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.
In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam. Over 75% of our wholesale revenues are derived from products that are manufactured in the United States using a mix of domestic and globally sourced components and raw materials.
During the second fiscal quarter we acquired one retail store from a former licensee in Cherry Hill, New Jersey and opened a new Company-owned store in the Cincinnati, Ohio market. A second new Company-owned store in the Orlando, Florida market is expected to open by the end of fiscal 2026.
Results of Operations – Period ended May 30, 2026 compared with the period ended May 31, 2025:
Historically, housing activity, both new home sales and sales of existing homes, is a primary driver of furniture and home furnishings sales. Since the COVID boom, housing prices have increased significantly along with the mortgage rates charged for home loans. Many homeowners with historically low mortgage rates are reluctant to sell their homes, and buyers are hesitant to commit amid high prices, higher mortgage rates and economic uncertainty. As a result, housing activity is significantly slower than historical trends resulting in reduced demand for furniture and home furnishings. This has put pressure on furniture and home furnishings retailers and we have seen an increase in those retailers exiting the industry. While our sales levels have decreased from the COVID period, we believe our sales have somewhat stabilized over the last couple of years. In addition, we have gained efficiencies in our operations and reduced our overall expense structure to improve our results of operations.
Consolidated results of operations for the three and six months ended May 30, 2026 and May 31, 2025 are as follows:
|
Quarter Ended |
Change |
Six Months Ended |
Change |
|||||||||||||||||||||||||||||||||||||||
|
May 30, 2026 |
May 31, 2025 |
Dollars |
Percent |
May 30, 2026 |
May 31, 2025 |
Dollars |
Percent |
|||||||||||||||||||||||||||||||||||
|
Net sales |
$ | 83,753 | 100.0 | % | $ | 84,348 | 100.0 | % | $ | (595 | ) | -0.7 | % | $ | 164,093 | 100.0 | % | $ | 166,510 | 100.0 | % | $ | (2,417 | ) | -1.5 | % | ||||||||||||||||
|
Cost of goods sold |
36,406 | 43.5 | % | 37,439 | 44.4 | % | (1,033 | ) | -2.8 | % | 71,581 | 43.6 | % | 72,771 | 43.7 | % | (1,190 | ) | -1.6 | % | ||||||||||||||||||||||
|
Gross profit |
47,347 | 56.5 | % | 46,909 | 55.6 | % | 438 | 0.9 | % | 92,512 | 56.4 | % | 93,739 | 56.3 | % | (1,227 | ) | -1.3 | % | |||||||||||||||||||||||
|
SG&A expenses |
44,631 | 53.3 | % | 44,412 | 52.7 | % | 219 | 0.5 | % | 88,544 | 54.0 | % | 88,787 | 53.3 | % | (243 | ) | -0.3 | % | |||||||||||||||||||||||
|
New store pre-opening costs |
473 | 0.6 | % | - | 0.0 | % | 473 | 100.0 | % | 568 | 0.3 | % | - | 0.0 | % | 568 | 100.0 | % | ||||||||||||||||||||||||
|
Income from operations |
$ | 2,243 | 2.7 | % | $ | 2,497 | 3.0 | % | $ | (254 | ) | -10.2 | % | $ | 3,400 | 2.1 | % | $ | 4,952 | 3.0 | % | $ | (1,552 | ) | -31.3 | % | ||||||||||||||||
Analysis of Quarterly Results:
Total sales revenue for the three months ended May 30, 2026 decreased $595 or 0.7% from the prior year period. This consisted of a $1,911 or 6.3% decrease in sales to external wholesale customers partially offset by a $1,316 or 2.4% increase in retail sales from our Company-owned stores.
Gross margins for the three months ended May 30, 2026 increased 90 basis points over the prior year period primarily due to higher margins in the wholesale business partially offset by lower margins in the retail business.
Selling, general and administrative (“SG&A”) expenses (excluding new store pre-opening costs) as a percentage of sales for the three months ended May 30, 2026 increased 60 basis points from 2025. Excluding $698 of proceeds from business interruption insurance recorded as a reduction to SG&A expense in the second quarter of 2025 as a result of a cyber incident in fiscal 2024, SG&A expenses as a percentage of sales decreased 20 basis points as compared to 2025.
Refer to the following discussions of quarterly results by segment for additional details.
Analysis of Year-to-Date Results:
Total sales revenue for the six months ended May 30, 2026 decreased $2,417 or 1.5% from the prior year period. This consisted of a $2,984 or 5.1% decrease in sales to external wholesale customers partially offset by a $567 or 0.5% increase in retail sales from our Company-owned stores.
Gross margins for the six months ended May 30, 2026 increased 10 basis points over the prior year period primarily due to lower margins in the retail business partially offset by improved margins in the wholesale business.
SG&A expenses (excluding new store pre-opening costs) as a percentage of sales for the six months ended May 30, 2026 increased 70 basis points from 2025. Excluding $698 of proceeds from business interruption insurance recorded as a reduction to SG&A expense in the second quarter of 2025 as a result of a cyber incident in fiscal 2024, SG&A expenses as a percentage of sales increased 30 basis points as compared to 2025.
Refer to the following discussions of quarterly results by segment for additional details.
Segment Information
We have strategically aligned our business into two reportable segments as defined in ASC 280, Segment Reporting, and as described below:
|
● |
Wholesale. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations, which includes Lane Venture. |
|
● |
Retail – Company-owned stores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers. |
In addition to the two reportable segments described above, we include our remaining business activities and assets in a reconciling category known as Corporate and other. This category includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefiting both wholesale and retail operations. In addition to property and equipment and various other assets associated with the shared corporate functions, the identifiable assets of Corporate and other include substantially all of our cash and our investments in CDs. We consider our corporate functions to be other business activities and have aggregated them with any of our operating segments that do not meet the requirements to be reportable segments. As of and for the three and six months ended May 30, 2026 and May 31, 2025, Corporate and other included no other operating segments.
Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores. Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has not been realized. These profits will be recorded when merchandise is delivered to the retail consumer. The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate.
Reconciliation of Segment Results to Consolidated Income (Loss) Before Income Taxes
To supplement the financial measures prepared in accordance with GAAP, we present gross profit by segment inclusive of the effects of intercompany sales by our wholesale segment to our retail segment. Because these intercompany transactions are not eliminated from our segment presentations and because we do not present gross profit as a measure of segment profitability in the accompanying condensed consolidated financial statements, the presentation of gross profit by segment is considered to be a non-GAAP financial measure. In addition, certain special gains or charges as well as non-operating income and expenses are included in consolidated income (loss) before income taxes are not included in the measures of segment profitability. The reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP is presented below along with the effects of various other intercompany eliminations on our consolidated results of operations.
|
Quarter Ended May 30, 2026 |
||||||||||||||||||||||||||||
|
Non-GAAP Presentation |
GAAP Presentation |
|||||||||||||||||||||||||||
|
Wholesale |
Retail |
Corporate & Other |
Eliminations |
Special Items |
Non-Operating |
Consolidated |
||||||||||||||||||||||
|
Net sales |
$ | 53,147 | $ | 55,548 | $ | - | $ | (24,942 | ) (1) | $ | - | $ | - | $ | 83,753 | |||||||||||||
|
Cost of goods sold |
34,356 | 27,085 | - | (25,035 | ) (2) | - | - | 36,406 | ||||||||||||||||||||
|
Gross profit |
18,791 | 28,463 | - | 93 | - | - | 47,347 | |||||||||||||||||||||
|
SG&A expense |
10,560 | 28,320 | 6,059 | (308 | ) (3) | - | - | 44,631 | ||||||||||||||||||||
|
New store pre-opening costs |
- | 473 | - | - | - | 473 | ||||||||||||||||||||||
|
Income (loss) from operations |
8,231 | (330 | ) | (6,059 | ) | 401 | - | - | 2,243 | |||||||||||||||||||
|
Interest income |
- | - | - | - | - | 446 | 446 | |||||||||||||||||||||
|
Other income, net |
- | - | - | - | - | 87 | 87 | |||||||||||||||||||||
|
Income (loss) before income taxes |
$ | 8,231 | $ | (330 | ) | $ | (6,059 | ) | $ | 401 | $ | - | $ | 533 | $ | 2,776 | ||||||||||||
|
Quarter Ended May 31, 2025 |
||||||||||||||||||||||||||||
|
Non-GAAP Presentation |
GAAP Presentation |
|||||||||||||||||||||||||||
|
Wholesale |
Retail |
Corporate & Other |
Eliminations |
Special Items |
Non-Operating |
Consolidated |
||||||||||||||||||||||
|
Net sales |
$ | 54,229 | $ | 54,232 | $ | - | $ | (24,113 | ) (1) | $ | - | $ | - | $ | 84,348 | |||||||||||||
|
Cost of goods sold |
35,649 | 25,838 | - | (24,048 | ) (2) | - | - | 37,439 | ||||||||||||||||||||
|
Gross profit |
18,580 | 28,394 | - | (65 | ) | - | - | 46,909 | ||||||||||||||||||||
|
SG&A expense |
10,290 | 27,912 | 6,521 | (311 | ) (3) | - | - | 44,412 | ||||||||||||||||||||
|
Income (loss) from operations |
8,290 | 482 | (6,521 | ) | 246 | - | - | 2,497 | ||||||||||||||||||||
|
Interest income |
- | - | - | - | - | 521 | 521 | |||||||||||||||||||||
|
Other loss, net |
- | - | - | - | - | (422 | ) | (422 | ) | |||||||||||||||||||
|
Income (loss) before income taxes |
$ | 8,290 | $ | 482 | $ | (6,521 | ) | $ | 246 | $ | - | $ | 99 | $ | 2,596 | |||||||||||||
|
Six Months Ended May 30, 2026 |
||||||||||||||||||||||||||||
|
Non-GAAP Presentation |
GAAP Presentation |
|||||||||||||||||||||||||||
|
Wholesale |
Retail |
Corporate & Other |
Eliminations |
Special Items |
Non-Operating |
Consolidated |
||||||||||||||||||||||
|
Net sales |
$ | 106,108 | $ | 108,093 | $ | - | $ | (50,108 | ) (1) | $ | - | $ | - | $ | 164,093 | |||||||||||||
|
Cost of goods sold |
68,823 | 52,562 | - | (49,804 | ) (2) | - | - | 71,581 | ||||||||||||||||||||
|
Gross profit |
37,285 | 55,531 | - | (304 | ) | - | - | 92,512 | ||||||||||||||||||||
|
SG&A expense |
20,658 | 56,327 | 12,176 | (617 | ) (3) | - | - | 88,544 | ||||||||||||||||||||
|
New store pre-opening costs |
- | 568 | - | - | - | - | 568 | |||||||||||||||||||||
|
Income (loss) from operations |
16,627 | (1,364 | ) | (12,176 | ) | 313 | - | - | 3,400 | |||||||||||||||||||
|
Interest income |
- | - | - | - | - | 999 | 999 | |||||||||||||||||||||
|
Other loss, net |
- | - | - | - | - | (105 | ) | (105 | ) | |||||||||||||||||||
|
Income (loss) before income taxes |
$ | 16,627 | $ | (1,364 | ) | $ | (12,176 | ) | $ | 313 | $ | - | $ | 894 | $ | 4,294 | ||||||||||||
|
Six Months Ended May 31, 2025 |
||||||||||||||||||||||||||||
|
Non-GAAP Presentation |
GAAP Presentation |
|||||||||||||||||||||||||||
|
Wholesale |
Retail |
Corporate & Other |
Eliminations |
Special Items |
Non-Operating |
Consolidated |
||||||||||||||||||||||
|
Net sales |
$ | 107,156 | $ | 107,526 | $ | - | $ | (48,172 | ) (1) | $ | - | $ | - | $ | 166,510 | |||||||||||||
|
Cost of goods sold |
69,840 | 50,775 | - | (47,844 | ) (2) | - | - | 72,771 | ||||||||||||||||||||
|
Gross profit |
37,316 | 56,751 | - | (328 | ) | - | - | 93,739 | ||||||||||||||||||||
|
SG&A expense |
20,341 | 56,317 | 12,747 | (618 | ) (3) | - | - | 88,787 | ||||||||||||||||||||
|
Income (loss) from operations |
16,975 | 434 | (12,747 | ) | 290 | - | - | 4,952 | ||||||||||||||||||||
|
Interest income |
- | - | - | - | - | 1,080 | 1,080 | |||||||||||||||||||||
|
Other loss, net |
- | - | - | - | - | (881 | ) | (881 | ) | |||||||||||||||||||
|
Income (loss) before income taxes |
$ | 16,975 | $ | 434 | $ | (12,747 | ) | $ | 290 | $ | - | $ | 199 | $ | 5,151 | |||||||||||||
Notes to segment consolidation table:
|
(1) |
Represents the elimination of sales from our wholesale segment to our Company-owned BHF stores. |
|
(2) |
Represents the elimination of purchases by our Company-owned BHF stores from our wholesale segment, as well as the change for the period in the elimination of intercompany profit in ending retail inventory. |
|
(3) |
Represents the elimination of rent paid by our retail stores occupying Company-owned real estate. |
Wholesale Segment
Results for the wholesale segment for the three and six months ended May 30, 2026 and May 31, 2025 are as follows:
|
Quarter Ended |
Change |
Six Months Ended |
Change |
|||||||||||||||||||||||||||||||||||||||||||||
|
May 30, 2026 |
May 31, 2025 |
Dollars |
Percent |
May 30, 2026 |
May 31, 2025 |
Dollars |
Percent |
|||||||||||||||||||||||||||||||||||||||||
|
Net sales |
$ | 53,147 | 100.0 | % | $ | 54,229 | 100.0 | % | $ | (1,082 | ) | -2.0 | % | $ | 106,108 | 100.0 | % | $ | 107,156 | 100.0 | % | $ | (1,048 | ) | -1.0 | % | ||||||||||||||||||||||
|
Gross profit (1) |
18,791 | 35.4 | % | 18,580 | 34.3 | % | 211 | 1.1 | % | 37,285 | 35.1 | % | 37,316 | 34.8 | % | (31 | ) | -0.1 | % | |||||||||||||||||||||||||||||
|
SG&A expenses |
10,560 | 19.9 | % | 10,290 | 19.0 | % | 270 | 2.6 | % | 20,658 | 19.5 | % | 20,341 | 19.0 | % | 317 | 1.6 | % | ||||||||||||||||||||||||||||||
|
Income from operations |
$ | 8,231 | 15.5 | % | $ | 8,290 | 15.3 | % | $ | (59 | ) | -0.7 | % | $ | 16,627 | 15.7 | % | $ | 16,975 | 15.8 | % | $ | (348 | ) | -2.1 | % | ||||||||||||||||||||||
|
(1) |
Gross profit at the segment level is considered a Non-GAAP financial measure due to the included effects of intercompany transactions. Refer to the reconciliation of gross profit by segment to consolidated gross profit presented under the Reconciliation of Segment Results to Consolidated Income (Loss) Before Income Taxes above. |
Wholesale sales by major product category are as follows:
|
Quarter Ended |
||||||||||||||||||||||||||||||||||||||||
|
May 30, 2026 |
May 31, 2025 (1) |
Total Change |
||||||||||||||||||||||||||||||||||||||
|
External |
Intercompany |
Total |
External |
Intercompany |
Total |
Dollars |
Percent |
|||||||||||||||||||||||||||||||||
|
Bassett Custom Upholstery |
$ | 19,132 | $ | 15,188 | $ | 34,320 | 64.6 | % | $ | 20,004 | $ | 14,517 | $ | 34,521 | 63.7 | % | $ | (201 | ) | -0.6 | % | |||||||||||||||||||
|
Bassett Leather Imports |
4,012 | 1,381 | 5,393 | 10.1 | % | 3,917 | 788 | 4,705 | 8.7 | % | 688 | 14.6 | % | |||||||||||||||||||||||||||
|
Bassett Custom Wood |
2,693 | 4,003 | 6,696 | 12.6 | % | 3,021 | 4,587 | 7,608 | 14.0 | % | (912 | ) | -12.0 | % | ||||||||||||||||||||||||||
|
Bassett Casegoods |
2,368 | 4,370 | 6,738 | 12.7 | % | 3,174 | 4,221 | 7,395 | 13.6 | % | (657 | ) | -8.9 | % | ||||||||||||||||||||||||||
|
Total |
$ | 28,205 | $ | 24,942 | $ | 53,147 | 100.0 | % | $ | 30,116 | $ | 24,113 | $ | 54,229 | 100.0 | % | $ | (1,082 | ) | -2.0 | % | |||||||||||||||||||
|
Six Months Ended |
||||||||||||||||||||||||||||||||||||||||
|
May 30, 2026 |
May 31, 2025 (1) |
Total Change |
||||||||||||||||||||||||||||||||||||||
|
External |
Intercompany |
Total |
External |
Intercompany |
Total |
Dollars |
Percent |
|||||||||||||||||||||||||||||||||
|
Bassett Custom Upholstery |
$ | 37,111 | $ | 30,632 | $ | 67,743 | 63.8 | % | $ | 38,850 | $ | 30,077 | $ | 68,927 | 64.3 | % | $ | (1,184 | ) | -1.7 | % | |||||||||||||||||||
|
Bassett Leather |
8,103 | 2,355 | 10,458 | 9.9 | % | 8,030 | 1,420 | 9,450 | 8.8 | % | 1,008 | 10.7 | % | |||||||||||||||||||||||||||
|
Bassett Custom Wood |
5,514 | 8,138 | 13,652 | 12.9 | % | 6,006 | 8,753 | 14,759 | 13.8 | % | (1,107 | ) | -7.5 | % | ||||||||||||||||||||||||||
|
Bassett Casegoods |
5,272 | 8,983 | 14,255 | 13.4 | % | 6,098 | 7,922 | 14,020 | 13.1 | % | 235 | 1.7 | % | |||||||||||||||||||||||||||
|
Total |
$ | 56,000 | $ | 50,108 | $ | 106,108 | 100.0 | % | $ | 58,984 | $ | 48,172 | $ | 107,156 | 100.0 | % | $ | (1,048 | ) | -1.0 | % | |||||||||||||||||||
|
(1) |
Certain amounts within the Bassett Custom Wood and Bassett Casegoods categories have been reclassified to conform with the 2026 presentation. |
Analysis of Quarterly Results – Wholesale
Net sales for the three months ended May 30, 2026 decreased $1,082 or 2.0% from the prior year, consisting of a 5.5% decrease in shipments to the open market partially offset by a 1.0% increase in Lane Venture shipments to wholesale customers and a 0.8% increase in shipments to our retail store network. The increase in shipments to our retail store network includes shipments of the Lane Venture brand, which we introduced in the BHF stores during the first quarter of 2026. Total shipments of the Lane Venture brand, including the shipments to the retail store network, increased 17.9% from the prior year. Gross margins for the three months ended May 30, 2026 increased 110 basis points from the prior year period primarily due to improved efficiencies in our domestic upholstery and wood operations coupled with improved pricing strategies in our imported wood offerings. SG&A expenses as a percentage of sales increased 90 basis points compared with the prior year period primarily due to increased outbound freight expenses from higher fuel costs.
Analysis of Year-to-Date Results – Wholesale
Net sales for the six months ended May 30, 2026 decreased $1,048 or 1.0% from the prior year, consisting of a 5.4% decrease in shipments to the open market partially offset by a 0.7% increase in shipments to our retail store network and a 3.4% increase in Lane Venture shipments to wholesale customers. The increase in shipments to our retail store network includes shipments of the Lane Venture brand, which we introduced in the BHF stores during the first quarter of 2026. Total shipments of the Lane Venture brand, including the shipments to the retail store network, increased 23.6% from the prior year. Gross margins for the six months ended May 30, 2026 increased 30 basis points from the prior year period primarily due to improved efficiencies in our domestic wood operations coupled with improved pricing strategies in our imported wood offerings. SG&A expenses as a percentage of sales increased 50 basis points compared with the prior year period primarily due to increased outbound freight expenses from higher fuel costs.
Wholesale Backlog
Wholesale backlog at May 30, 2026 was $18,859 as compared to $19,519 at November 29, 2025 and $18,418 at May 31, 2025.
Retail – Company-owned Stores Segment
Results for the retail segment for the periods ended May 30, 2026 and May 31, 2025 are as follows:
|
Quarter Ended |
Change |
Six Months Ended |
Change |
|||||||||||||||||||||||||||||||||||||||||
|
May 30, 2026 |
May 31, 2025 |
Dollars |
Percent |
May 30, 2026 |
May 31, 2025 |
Dollars |
Percent |
|||||||||||||||||||||||||||||||||||||
|
Net sales |
$ | 55,548 | 100.0 | % | $ | 54,232 | 100.0 | % | $ | 1,316 | 2.4 | % | $ | 108,093 | 100.0 | % | $ | 107,526 | 100.0 | % | $ | 567 | 0.5 | % | ||||||||||||||||||||
|
Gross profit (1) |
28,463 | 51.2 | % | 28,394 | 52.4 | % | 69 | 0.2 | % | 55,531 | 51.4 | % | 56,751 | 52.8 | % | (1,220 | ) | -2.1 | % | |||||||||||||||||||||||||
|
SG&A expenses |
28,320 | 51.0 | % | 27,912 | 51.5 | % | 408 | 1.5 | % | 56,327 | 52.1 | % | 56,317 | 52.4 | % | 10 | 0.0 | % | ||||||||||||||||||||||||||
|
New store pre-opening costs |
473 | 0.9 | % | - | 0.0 | % | 473 | 100.0 | % | 568 | 0.5 | % | - | 0.0 | % | 568 | 100.0 | % | ||||||||||||||||||||||||||
|
Loss from operations |
$ | (330 | ) | -0.6 | % | $ | 482 | 0.9 | % | $ | (812 | ) |
N/M |
$ | (1,364 | ) | -1.3 | % | $ | 434 | 0.4 | % | $ | (1,798 | ) |
N/M |
||||||||||||||||||
|
(1) |
Gross profit at the segment level is considered a Non-GAAP financial measure due to the included effects of intercompany transactions. Refer to the reconciliation of gross profit by segment to consolidated gross profit presented under the Reconciliation of Segment Results to Consolidated Income (Loss) Before Income Taxes above. |
Retail sales by major product category are as follows:
|
Quarter Ended |
Change |
Six Months Ended |
Change |
|||||||||||||||||||||||||||||||||||||||||
|
May 30, 2026 |
May 31, 2025 (1) |
Dollars |
Percent |
May 30, 2026 |
May 31, 2025 (1) |
Dollars |
Percent |
|||||||||||||||||||||||||||||||||||||
|
Bassett Custom Upholstery |
$ | 32,301 | 58.1 | % | $ | 30,998 | 57.2 | % | $ | 1,303 | 4.2 | % | $ | 61,625 | 57.0 | % | $ | 62,185 | 57.8 | % | $ | (560 | ) | -0.9 | % | |||||||||||||||||||
|
Bassett Leather Imports |
772 | 1.4 | % | 333 | 0.6 | % | 439 | 131.8 | % | 1,319 | 1.2 | % | 568 | 0.5 | % | 751 | 132.2 | % | ||||||||||||||||||||||||||
|
Bassett Custom Wood |
8,119 | 14.6 | % | 8,468 | 15.6 | % | (349 | ) | -4.1 | % | 16,261 | 15.0 | % | 16,174 | 15.0 | % | 87 | 0.5 | % | |||||||||||||||||||||||||
|
Bassett Casegoods |
7,080 | 12.7 | % | 7,072 | 13.0 | % | 8 | 0.1 | % | 14,807 | 13.7 | % | 13,724 | 12.8 | % | 1,083 | 7.9 | % | ||||||||||||||||||||||||||
|
Accessories, mattresses and other (2) |
7,276 | 13.1 | % | 7,361 | 13.6 | % | (85 | ) | -1.2 | % | 14,081 | 13.0 | % | 14,875 | 13.8 | % | (794 | ) | -5.3 | % | ||||||||||||||||||||||||
|
Total |
$ | 55,548 | 100.0 | % | $ | 54,232 | 100.0 | % | $ | 1,316 | 2.4 | % | $ | 108,093 | 100.0 | % | $ | 107,526 | 100.0 | % | $ | 567 | 0.5 | % | ||||||||||||||||||||
|
(1) |
Certain amounts within Bassett Custom Upholstery and Bassett Leather Imports have been reclassified to conform to the 2026 presentation. |
|
|
(2) |
Includes the sale of goods other than Bassett-branded products, such as accessories and bedding, and also includes the sale of furniture protection plans. |
Analysis of Quarterly Results - Retail
Net sales for the three months ended May 30, 2026 increased $1,316 or 2.4% over the prior year period. Written sales (the value of sales orders taken but not delivered) increased 9.5% over the second quarter of 2025. Gross margin for the three months ended May 30, 2026 declined 120 basis points from the prior period primarily due to lower margins on in-line goods as the full effect of the mid-January price increase was not realized for the entire quarter coupled with lower margins on clearance goods as we continue to be more aggressive in cycling through returned goods and floor samples. SG&A expenses (excluding new store pre-opening costs) as a percentage of sales for the three months ended May 30, 2026 decreased 50 basis points from the prior year period. Excluding $569 of proceeds from business interruption insurance recorded as a reduction to SG&A expense in the second quarter of 2025 as a result of a cyber incident in fiscal 2024, SG&A expenses as a percentage of sales decreased 150 basis points as compared to 2025. This decrease was primarily due to lower health insurance and workers compensation costs from better claim experience and improved efficiency in the warehouse and delivery operation.
During the three months ended May 30, 2026, we incurred $473 of new store pre-opening costs associated with new stores in the Cincinnati, Ohio market, which opened late in the second quarter, and Orlando, Florida market, expected to open by the end of the third quarter of fiscal 2026. Prior to opening a new store we incur such expenses as rent, training costs and other payroll-related costs. These costs generally range between $200 to $400 per store depending on the overall rent costs for the location and the period between the time when we take physical possession of the store space and the time of the store opening. Generally, rent payments during a buildout period between delivery of possession and opening of a new store are deferred and therefore straight-line rent expense recognized during that time does not require cash. Inherent in our retail business model, we also incur losses in the two to three months of operation following a new store opening. Like other furniture retailers, we do not recognize a sale until the furniture is delivered to our customer. Because our retail business model does not involve maintaining a stock of retail inventory that would result in quick delivery and because of the custom nature of many of our furniture offerings, delivery to our customers usually occurs about 30 to 45 days after an order is placed. We generally require a deposit at the time of order and collect the remaining balance when the furniture is delivered, at which time the sale is recognized. Coupled with the previously discussed store pre-opening costs, total start-up losses can range from $400 to $600 per store. We generally expect that new stores will operate at or above a retail break-even level within a reasonable period of time following store opening. Factors affecting the length of time required to achieve this goal on a store-by-store basis may include the level of brand recognition, the degree of local competition and the depth of penetration in a particular market. Even as new stores ramp up to break even, we do realize additional wholesale sales volume sold through each new store that leverages the fixed costs in our wholesale business.
Analysis of Year-to-Date Results - Retail
Net sales for the six months ended May 30, 2026 increased $567 or 0.5% over the prior year. Written sales (the value of sales orders taken but not delivered) increased 4.6% over the first six months of 2025. Gross margin for the six months ended May 30, 2026 declined 140 basis points from the prior period primarily due to lower margins on in-line goods as we did not institute a price increase related to the increased tariff costs until mid-January of 2026 coupled with lower margins on clearance goods as we continue to be more aggressive in cycling through returned goods and floor samples. SG&A expenses (excluding new store pre-opening costs) as a percentage of sales for the six months ended May 30, 2026 decreased 30 basis points from the prior year period. Excluding $569 of proceeds from business interruption insurance recorded as a reduction to SG&A expense in the second quarter of 2025 as a result of a cyber incident in fiscal 2024, SG&A expenses as a percentage of sales decreased 80 basis points as compared to 2025. This decrease was primarily due to lower health insurance and workers compensation costs from better claim experience and improved efficiency in the warehouse and delivery operation.
During the six months ended May 30, 2026, we incurred $568 of new store pre-opening costs associated with new stores in the Cincinnati, Ohio market, which opened late in the second quarter, and Orlando, Florida market, expected to open by the end of the third quarter of fiscal 2026.
Retail Backlog
Retail backlog at May 30, 2026 was $34,701 compared to $34,402 at November 29, 2025 and $34,091 at May 31, 2025.
Corporate and Other
In addition to the two reportable segments discussed above, we include our remaining business activities and assets in a reconciling category known as Corporate and other, which includes the shared costs of various corporate functions. SG&A expenses of Corporate and other for the periods ended May 30, 2026 and May 31, 2025 are as follows:
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Quarter Ended |
Change |
Six Months Ended |
Change |
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May 30, 2026 |
May 31, 2025 |
Dollars |
Percent |
May 30, 2026 |
May 31, 2025 |
Dollars |
Percent |
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|
SG&A expenses |
$ | 6,059 | $ | 6,521 | $ | (462 | ) | -7.1 | % | $ | 12,176 | $ | 12,747 | $ | (571 | ) | -4.5 | % | ||||||||||||||
Analysis of Results – Corporate and Other
SG&A expenses included in Corporate and other for the three and six months ended May 30, 2026 decreased $462 or 7.1%, and $571 or 4.5%, respectively, from the prior year periods due primarily to lower incentive compensation costs.
Other Items Affecting Net Income
Interest Income
Interest income for the three months ended May 30, 2026 declined $75 or 14.4% from the prior year due to lower interest income from CDs and interest-bearing cash. Interest income for the six months ended May 30, 2026 declined $81 or 7.5% from the prior year as lower interest income on CDs and interest-bearing cash equivalents was partially offset by $99 of interest received as a Federal income tax refund during the first quarter of fiscal 2026.
Other Income (Loss), Net
Other income, net, for the three months ended May 30, 2026 was $87 compared to a net loss of $422 for the prior year period, primarily due to increases in the cash surrender value of Company-owned life insurance. Other loss, net, for the six months ended May 30, 2026 declined $776 or 88% from the prior year period due to increases in the cash surrender value of Company-owned life insurance partially offset by increased interest expense from finance leases compared to the prior year period.
Income Taxes
We calculate an anticipated effective tax rate for the year based on our annual estimates of pretax income or loss and use that effective tax rate to record our year-to-date income tax provision. Any change in annual projections of pretax income or loss could have a significant impact on our effective tax rate for the respective quarter.
Our effective tax rate was 26.5% for the three and six months ended May 30, 2026. The effective rate differs from the federal statutory rate of 21% primarily due to the effects of state income taxes and various permanent differences.
Our effective tax rate was 26.1% and 26.8% for the three and six months ended May 31, 2025, respectively. The effective rate differs from the federal statutory rate of 21% primarily due to the effects of state income taxes and various permanent differences.
Liquidity and Capital Resources
Cash Flows
Cash provided by operating activities for the first six months of fiscal 2026 was $1,896 compared to cash provided by operations of $6,903 for the first six months of fiscal 2025, representing a decline of $5,007 in cash flows from operations. This decrease was primarily the result of lower income levels and negative changes in working capital which had been expected.
Our overall cash position declined $5,375 during the first six months of 2026. During the first six months of fiscal 2026, we spent $2,592 on purchases of property and equipment, including tenant improvements to our new locations in Cincinnati, Ohio and Orlando, Florida as well as our new wholesale showroom space in High Point, North Carolina. We paid $470 to a former licensee to acquire a BHF located in Cherry Hill, New Jersey. We also paid $3,443 in dividends during the first six months of 2026. We repurchased $653 worth of shares under our stock repurchase program during the first six months of 2026 compared to repurchases of $1,158 in the prior year period. We expect capital expenditures for the full year to range from $10 million to $12 million. As of May 30, 2026, $17,601 remains available for future purchases under our stock repurchase plan. With cash and cash equivalents and short-term investments totaling $53,890 on hand at May 30, 2026, expected future operating cash flows and the availability under our credit line noted below, we believe we have sufficient liquidity to fund operations for the foreseeable future.
Debt and Other Obligations
On May 15, 2024, we entered into the Credit Facility with our bank. This Credit Facility provides for a line of credit of up to $25,000. At May 30, 2026, we had $5,866 outstanding under standby letters of credit against our line. The line bears interest at the One-Month Term Secured Overnight Financing Rate (“One-Month Term SOFR”) plus 1.75% and is secured by our accounts receivable and inventory. Our bank charges a fee of 0.25% on the daily unused balance of the line, payable quarterly. Under the terms of the Credit Facility, Consolidated Minimum Tangible Net Worth shall at no time be less than $120,000. In addition, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis and commencing as of the end of the first fiscal quarter after the first date that the used commitment (the sum of any outstanding advances plus standby letters of credit) equals or exceeds $8,250:
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● |
Consolidated Fixed Charge Coverage Ratio of not less than 1.2 times and |
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● |
Consolidated Lease Adjusted Leverage to EBITDAR Ratio not to exceed 3.35 times. |
At May 30, 2026, we were in compliance with the Consolidated Minimum Tangible Net Worth requirement. Since our used commitment was less than $8,250 at May 30, 2026, we were not required to test the Consolidated Fixed Charge Coverage Ratio or the Consolidated Lease Adjusted Leverage to EBITDAR Ratio. However, had we been required to test those ratios, we would have been in full compliance. Our availability under the Credit Facility is currently $19,134. On January 9, 2026, the Credit Facility was amended to extend the expiration date to January 31, 2029.
We lease land and buildings that are used in the operation of our Company-owned retail stores as well as in the operation of one of our licensee-owned stores, and we lease land and buildings used in our wholesale manufacturing operations. We also lease certain personal property such as lift trucks, office equipment and local delivery trucks. The present value of our obligations for leases with terms in excess of one year at May 30, 2026 is $88,517 and is included in our accompanying condensed consolidated balance sheet at May 30, 2026. We were contingently liable under licensee lease obligation guarantees in the amount of $3,656 at May 30, 2026. The remaining terms under these lease guarantees extend for five years. See Note 10 to our condensed consolidated financial statements for additional details regarding our lease guarantees.
We provide post-employment benefits to certain current and former executives and management level employees of the Company. Included among these benefits are two defined-benefit plans with a combined projected benefit obligation of $6,950 at May 30, 2026, the current portion of which is $815. We also have deferred compensation plans with a total liability of $6,240 at May 30, 2026, the current portion of which is $327. See Note 9 to our condensed consolidated financial statements for additional information regarding these plans.
Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in our Annual Report on Form 10-K for the fiscal year ended November 29, 2025.
Off-Balance Sheet Arrangements
We utilize stand-by letters of credit in the procurement of certain goods in the normal course of business. In addition, we have guaranteed certain lease obligations of licensee operators for some of their store locations. See Note 10 to our condensed consolidated financial statements for further discussion of lease guarantees, including descriptions of the terms of such commitments and methods used to mitigate risks associated with these arrangements.
Contingencies
We are involved in various legal and environmental matters which arise in the normal course of business. Although the final outcome of these matters cannot be determined, based on the facts presently known, it is our opinion that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations. See Note 10 to our condensed consolidated financial statements for further information regarding certain contingencies as of May 30, 2026.
Item 3. Quantitative and Qualitative Disclosure about Market Risk:
We are exposed to market risk from changes in the value of foreign currencies. Substantially all of our imports purchased outside of North America are denominated in U.S. dollars. Therefore, we believe that gains or losses resulting from changes in the value of foreign currencies relating to foreign purchases not denominated in U.S. dollars would not be material to our results from operations.
We are exposed to market risk from changes in the cost and availability of raw materials used in our manufacturing processes, principally wood, woven fabric, and foam products. The cost of foam products, which are petroleum-based, is sensitive to changes in the price of oil.
We are also exposed to commodity price risk related to diesel fuel prices for fuel used in our retail segment for home delivery as well as through amounts we are charged for logistical services by our service providers. We manage our exposure to that risk primarily through the application of fuel surcharges to our customers.
We have potential exposure to market risk related to conditions in the commercial real estate market. Our retail real estate holdings of $23,179 at May 30, 2026 for Company-owned stores could suffer significant impairment in value if we are forced to close additional stores and sell or lease the related properties during periods of weakness in certain markets. Additionally, if we are required to assume responsibility for payment under the lease obligations of $3,656 which we have guaranteed on behalf of certain licensees as of May 30, 2026 we may not be able to secure sufficient sub-lease income in the current market to offset the payments required under the guarantees. We are also exposed to risk related to conditions in the commercial real estate rental market with respect to the right-of-use assets we carry on our balance sheet for leased retail store locations, manufacturing and warehouse facilities. At May 30, 2026, the unamortized balance of such right-of-use assets used in continuing operations totaled $77,453. Should we have to close or otherwise abandon one of these leased locations, we could incur additional impairment charges if rental market conditions do not support a fair value for the right of use asset in excess of its carrying value.
Item 4. Controls and Procedures:
The Company’s principal executive officer and principal financial officer have evaluated the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon their evaluation, the principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective. There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II - OTHER INFORMATION-CONTINUED
BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES
MAY 30, 2026
(Dollars in thousands except share and per share data)
Item 1. Legal Proceedings
None
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table summarizes the stock repurchase activity by or on behalf of the Company or any “affiliated purchaser,” as defined by Rule 10b-18(a)(3) of the Exchange Act, for the three and six months ended May 30, 2026 and the approximate dollar value of shares that may yet be purchased pursuant to our stock repurchase program:
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Total Shares Purchased |
Average Price Paid |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) |
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) |
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March 1, 2026 -April 4, 2026 |
22,210 | (2) | $ | 14.45 | 22,000 | $ | 17,788 | |||||||||
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April 5, 2026 - May 2, 2026 |
- | $ | - | - | $ | 17,788 | ||||||||||
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May 3, 2026 - May 30, 2026 |
13,020 | $ | 14.40 | 13,020 | $ | 17,601 | ||||||||||
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(1) |
The Company is authorized to repurchase Company stock under a plan which was originally announced in 1998. On March 9, 2022, the Board of Directors increased the remaining limit of the repurchase plan to $40,000. At May 30, 2026, $17,601 remained available for share repurchases under the plan. |
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(2) |
Includes 210 shares deemed to be repurchased in connection with the vesting of awards. |
Item 3. Defaults Upon Senior Securities
None.
Item 5. Other Information
(c) During the fiscal quarter ended May 30, 2026, of our directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408(a) of Regulation S-K) for the purchase or sale of the Company’s securities.
Item 6. Exhibits
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a. |
Exhibits: |
Exhibit 3a – Articles of Incorporation as amended to date are incorporated herein by reference to the Exhibit to Form 10-Q for the fiscal quarter ended February 28, 1994.
Exhibit 31a – Chief Executive Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
BASSETT FURNITURE INDUSTRIES INCORPORATED AND SUBSIDIARIES
MAY 30, 2026
(Dollars in thousands except share and per share data)
Exhibit 31b – Chief Financial Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 101.INS Inline XBRL Instance
Exhibit 101.SCH Inline XBRL Taxonomy Extension Schema
Exhibit 101.CAL Inline XBRL Taxonomy Extension Calculation
Exhibit 101.DEF Inline XBRL Taxonomy Extension Definition
Exhibit 101.LAB Inline XBRL Taxonomy Extension Labels
Exhibit 101.PRE Inline XBRL Taxonomy Extension Presentation
Exhibit 104. Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
BASSETT FURNITURE INDUSTRIES, INCORPORATED
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/s/ |
Robert H. Spilman, Jr. |
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Robert H. Spilman, Jr., Chairman and Chief Executive Officer |
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July 1, 2026 |
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/s/ |
J. Michael Daniel |
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J. Michael Daniel, Senior Vice President and Chief Financial Officer July 1, 2026 |
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Exhibit 31a
CERTIFICATIONS
I, Robert H. Spilman, Jr., certify that:
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1. |
I have reviewed this quarterly report on Form 10-Q of Bassett Furniture Industries, Incorporated; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
July 1, 2026
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/s/ |
Robert H. Spilman, Jr. |
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Robert H. Spilman, Jr., Chairman and Chief Executive Officer |
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Exhibit 31b
CERTIFICATIONS
I, J. Michael Daniel, certify that:
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1. |
I have reviewed this quarterly report on Form 10-Q of Bassett Furniture Industries, Incorporated; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
July 1, 2026
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/s/ |
J. Michael Daniel |
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J. Michael Daniel, Senior Vice President and Chief Financial Officer |
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Exhibit 32a
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Bassett Furniture Industries, Incorporated (the “Company”) on Form 10-Q for the period ending May 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert H. Spilman, Jr., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
July 1, 2026
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/s/ |
Robert H. Spilman, Jr. |
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Robert H. Spilman, Jr., Chairman and Chief Executive Officer |
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A signed original of this written statement required by Section 906 has been provided to Bassett Furniture Industries, Incorporated and will be retained by Bassett Furniture Industries, Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32b
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Bassett Furniture Industries, Incorporated (the “Company”) on Form 10-Q for the period ending May 30, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Michael Daniel, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
July 1, 2026
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/s/ |
J. Michael Daniel |
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J. Michael Daniel, Senior Vice President and Chief Financial Officer |
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A signed original of this written statement required by Section 906 has been provided to Bassett Furniture Industries, Incorporated and will be retained by Bassett Furniture Industries, Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.