BSET - Bassett Furniture (BSET) - Furniture Demand Remains Strong Reports 3Q21 Results
3Q21 Results. Revenue came in at $118.9 million, up 29.8% y-o-y and was up 8.7% compared to the non-COVID impacted 3Q19. Wholesale sales rose 32.1%, while Retail sales increased 10.5% and Logistics segment revenue was up 19.1%. Bassett reported net income of $3.0 million, or $0.31 per share, compared to net income of $2.2 million, or $0.22 per share, last year. We had forecast revenue of $120 million and EPS of $0.32.Backlog Continues to Climb. Wholesale backlog hit $92.8 million at the end of the quarter, up from $87.7 million at the end of the second quarter, and up from $37.4 million a year ago. Backlog continued to grow in the fourth quarter on the back of strong Labor Day retail sales. Written sales increased 2.6% in the quarter.But Challenges Remain. Materials price inflation, a tight labor market, shipping difficulties, and a lack of warehouse space are just some of the challenges being faced by many industries, and the furniture industry is not exempted. Bassett has raised prices an unprecedented four times this year to help with rising material prices, higher wages, and a quintupling of ocean freight costs. We remain hopeful many of these issues will begin to dissipate over the course of the fourth quarter.Updated Projections. Challenging conditions remain and the Vietnam shut-down could impact results in the latter part of the fourth quarter. We have modestly tweaked our estimates to account for the current conditions, but if improvement is forthcoming, we could be light. For the fourth quarter, we reduced our revenue projection to $122 million from $125 million and our EPS estimate to $0.54 from $0.58. For the full year, we are now at revenue of $478.6 million, down from $482.7 million, and our EPS is now at $1.85, down from $1.90.Maintaining Outperform and $32 Price Target. In spite of the current challenges, we are maintaining our Outperform rating and our $32.00 12-month price target. The current constraints will be worked through and we believe BSET shares represent a favorable risk/reward proposition at the current price. Read More >>