1Q21 Results. Bassett reported strong 1Q21 results with revenue of $113.7 million and EPS of $0.40. This compares to $112.1 million and $0.12, respectively, in 1Q20, which was unaffected by COVID issues. We had projected revenue of $113.5 million and EPS of $0.24 while consensus was at $114 million and $0.23, respectively.Environment Remains Positive. All sales channel recoded written business increases, which resulted in a 44% y-o-y increase in net orders. Wholesale backlog at the end of 1Q21 was $67.5 million, up from $54.9 million at November 28, 2020. Orders from independent dealers jumped 98%, BHF network orders rose 14%, while Lane Venture orders increased 75%. Retail written sales rose 4.1% in the quarter with Retail backlog of $64.8 million at quarter's end.But Some Issues to Watch. While overall conditions remain upbeat, the entire industry is battling shipping issues as containers from China remain supply constrained while shipping rates remain elevated. These should resolve themselves in the back half of the year. In addition supply shortages and rising prices have impacted key materials such as foam, fabric, and plywood. Bassett has implemented price increases to offset rising material prices.Updated Projections. We see 2Q21 as a replay of the first quarter as supply chain and manufacturing capacity will combine to limit reduction of the backlog. The issues affecting the entire furniture industry are likely to abate in the second half of the year. For 2Q21, we are projecting revenue of $116 million and EPS of $0.35. For the full year, we are now at revenue of $465.7 million and EPS of $1.78.Maintaining Outperform and $28.00 Price Target. We are maintaining our Outperform rating and our 12-month price target of $28.00. Bassett continues to provide attractive upside from the current price with a very favorable furniture environment, lowered costs due to a 2020 restructuring, and growth initiatives focused around a "Made in America" strategy and expanding e-commerce opportunities.Read More >>