Bassett Furniture Industries (BSET) Q2 2026 earnings summary

Executive summary

• Q2 2026 consolidated revenue was $83.8 million, down 0.7% year-over-year, with operating income at $2.2 million (2.7% of sales), and diluted EPS rising to $0.24 from $0.22.

• Adjusted operating profit improved, excluding prior-year insurance gains, despite a decline in operating income year-over-year.

• Retail written sales rose 9.5% with strong Memorial Day promotion, and e-commerce written sales grew 40% year-over-year, with average order value up 24%.

• Wholesale orders increased 5.2%, but shipments fell 2% due to back-end loaded sales; Lane Venture brand shipments up 17.9%.

• Strategic initiatives include new product introductions, store openings, and omni-channel investments.

Financial highlights

• Gross margin increased 90 basis points to 56.5%, driven by wholesale margin gains, partially offset by lower retail margins.

• SG&A (excluding pre-opening costs) was 53.3% of sales, up 60 basis points; adjusted for insurance proceeds, down 20 basis points.

• Net income for Q2 was $2.0 million, up from $1.9 million last year; cash from operating activities was $7.4 million for the quarter.

• Cash and short-term investments at quarter-end totaled $53.9 million.

• Quarterly dividend payments totaled $1.7 million; share buybacks were $500,000.

Outlook and guidance

• Retail gross margins are targeted to rise by 200-250 basis points in mid-July, with impact expected in Q4.

• Continued focus on cost reductions of $1.5-$2 million annually, with benefits expected in Q3 and Q4.

• Capital expenditures for 2026 projected at $10-$12 million, up from $4.5 million last year.

• New store openings planned in Orlando (Q4 2026) and Melville, NY (2027), with ongoing evaluation of further expansion.

• Sufficient liquidity is anticipated to fund operations for the foreseeable future.