BASSETT, VA - Weather issues, lower margins and one less week in the fiscal contributed to Bassett Furniture Industries posting consolidated net sales of $75.6 million for the first quarter 2014, compared to $79.8 million in 2013. The residential furniture maker though, remained confident.
"The pace of sales increase that we have posted over the past few quarters slowed as we began fiscal 2014," said Robert H. Spilman, Jr., president and CEO. "Normalizing for one less week in the period this year compared to last, consolidated revenue rose 2%. Though difficult to quantify, we believe that inclement weather hampered sales and deliveries in January and February. That aside, our team remains committed to further execution of our wholesale and retail strategies and continuing our recent trend of operating improvement in 2014."
The residential furniture company reported an operating income of $1.1 million or 1.4% of sales, for the quarter, a decrease of $1.3 million from the prior year quarter. New store related costs accounted for nearly $1 million. Four new Bassett Home Furnishings (BHF) stores opened: Ft. Worth, TX, Annapolis, MD, Westport, CT and Burlington, MA.
Also contributing to the drop were lower margins in the wholesale operation. Net sales for this segment were $51.1 million for the first quarter of 2014, compared to $54.0 million in 2013, which had an extra week. Operating income was $2.3 million or 4.6% of sales as compared to $3.0 million or 5.6% of sales in the prior year quarter.
"Normalized wholesale net shipments grew by 2% for the quarter, led by an increase in upholstery shipments of 7%," Spilman said. "Our domestic upholstery facility ran efficiently as our core HGTV HOME Design Studio only at Bassett custom products continued to perform well. We also began the production of the new Bassett Express 2U assortment that we introduced at the October Furniture Market. This new line of more moderately priced stationary upholstery fully utilizes our Asian cut and sew platform and was placed with over 300 dealers."
Spilman added, "Total normalized wood shipments declined by 2% during the period. We continue to face a challenging environment for the bedroom and formal dining categories and we are adopting a leaner SKU footprint accordingly. We believe that a more focused assortment of best-selling items can drive sales, enhance service levels, and improve inventory turns. On the other hand, our domestic wood facility enjoyed a 21% increase in shipments for the quarter. Consumer demand for our custom casual dining product line is strong and we are in the midst of a plant expansion to make room for the higher level of production that we have had over the past 18 months."