BASSETT, Va. (AP) â¿¿ Bassett Furniture Industries Inc.'s fiscal fourth-quarter net income slid as the company struggles with a weak housing market, spent to launch new products and incurred the expense of closing stores. It was also pinched by a higher income tax expense.
The housing market remains troubled in the aftermath of the recession, despite low mortgage rates. Some consumers wonder if prices will decline further, while others are hesitant to make such an investment while unemployment remains high.
Fewer people buying houses has meant declining sales of Bassett's furniture â¿¿ annual revenue has still not recovered to levels from before the recession. The company said it made progress during the September-November quarter, however, by reducing bad debt, closing weak stores and increasing wholesale margins.
But restructuring charges and expenses related to preparations for the launch of a new HGTV-branded product line in fall tempered those gains.The furniture company reported Tuesday that it earned $633,000, or 6 cents per share, for the period ended Nov. 26. That's down from net income of $1.9 million, or 17 cents per share, a year earlier. Revenue declined 4 percent to $63.3 million from $66 million. Revenue at company-owned stores open at least a year rose 4.9 percent. This metric is a key gauge of a retailer's health because it excludes results from stores recently opened or closed. Wood and upholstery sales fell 12 percent. Wholesale sales dropped 11 percent because Bassett had fewer licensed stores than the prior-year period. For the year, Bassett Furniture earned $55.3 million, or $4.79 per share. That compares with a loss of $2 million, or 17 cents per share, in 2010. Annual revenue rose 9 percent to $253.2 million from $235.3 million. Bassett Furniture also said Tuesday that it is raising its quarterly dividend by 1.5 cents per share to 5 cents per share. The dividend will be paid on March 1 to shareholders of record on Feb. 15.
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