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Bassett Furniture manufactures living, dining, bedroom, outdoor and upholstered furniture in Virginia and North Carolina.
Bassett builds profitability in Q1; CEO talks price plan in wake of tariffs
Bobby Dalheim //Senior Editor of Case Goods and Global Sourcing//April 3, 2025
BASSETT, Va. – Bassett Furniture reported consolidated first quarter sales of $82.2 million, a decrease of 5.1% from last year. However, when considering that last year’s quarter had an extra week, sales increased 2.2%.
The company reported positive operating income of $2.5 million, compared to a loss last year of $2.4 million. This marks the second consecutive quarter of profitability, which followed five straight quarters of losses previously.
Improved wholesale margins in the quarter drove company gross margin to 57%, a 170 basis point increase over the prior year, and marking some of the highest levels ever seen, according to the company.
Considering the extra week, wholesale sales climbed 4.2% to $52.9 million. Margins grew 250 basis points due to gains in Bassett Custom Upholstery and manufacturing efficiency gains.
In retail, with the extra week considered, sales increased 6.8% to $53.3 million. Gross margin in the segment fell 80 basis points due to lower margins in in-line and clearance goods, as the company said it became more aggressive in cycling through unproductive inventory.
“We had a strong December and January, due in part to the shorter time frame between Black Friday and Christmas,” said Rob Spilman, CEO. “The sales environment was a little more challenging in February.”
Tariffs were, of course, a talking point on the earnings call.
“Tariffs have been top of mind for several months and especially since 4 p.m. yesterday,” Spilman said. “Although 79% of our wholesale shipments in the first quarter were manufactured or assembled in the U.S., many materials used in the process, like fabric and plywood, will now be exposed to tariffs, as will the remaining 21% of our product.
“The entire industry is working with outside experts to gain clarity on this unusual situation. We will determine what this means for our pricing structure on goods that are affected over the next several days. We’re thinking about everything. We’ve been reaching out to our best customers.
“If it stays like it is, we’re going to have to increase prices at some level.”
Spilman said on an earnings call that it’s not feasible to bring the remaining 21% of the company’s product to the U.S. to be made domestically.
“We can certainly emphasize the domestic product more prominently if we choose to do so,” Spilman said. “But we have some nice selling imported product that’s really making a difference for us. We have to study that. We do have some flexibility with our five U.S. factories, and we’re not totally reliant on imports.”
Spilman gave his overall outlook:
“Our strategic plan for 2025 was designed to weather another year of tepid demand and to keep us disciplined and focused on growth. Our management team is running with a leaner mindset.
“We plan for housing sales to remain slow and we’re moving to react quickly to the ups and downs and economic data and changes from Washington. Last week’s report that consumer confidence is plummeting is disconcerting, but we believe the steps we’ve taken will help us run efficiently and get through this tough furniture economy.”
