Q2 2025 Bassett Furniture Industries Inc Earnings Call
Okay.
Speaker Change: Good day, and thank you for standing by welcome them to the best furniture second quarter of 2025 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question answer session to ask a question. During the session you will need your question Tom one one on your telephone.
Operator: Good day, and thank you for standing by.
Operator: Welcome to the Bassett Furniture's second quarter 2025 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session.
Operator: To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised.
He will then an automated message advising yohanan suite.
Operator: Please note that today's conference may be recorded.
Speaker Change: Today's conference maybe recorded.
Mike Daniel: I will now hand the conference over to our first speaker, Mr. Mike Daniel, Chief Financial Officer. Thank you, Livia, for the introduction. Welcome to Bassett Furniture's earnings call for the second quarter of fiscal 2025, ended May 31, 2025.
Speaker Change: I will now hand, the call over to your first speaker.
Speaker Change: <unk> Chief Financial Officer. Please go ahead.
Speaker Change: Thank you for the introduction.
Speaker Change: Welcome to basket Furniture's earnings call for the second quarter of fiscal 2025 ended May 31 2025.
Mike Daniel: Joining me today is our Chairman and CEO, Rob Spilman. We issued our news release yesterday after the market closed, and it's available on our website. We will be filing our Form 10-Q early this morning, and that too will be on the website. After today's remarks, we will open the call up for a Q&A session. We will post a transcript of the call on Bassett's investor website following the conference call.
Speaker Change: Joining me today is our chairman and CEO, Rob Spillman, we issued our news release yesterday after the market closed and it is available on our website.
Speaker Change: We will be filing our Form 10-Q early this morning, and that too will be on the website.
Speaker Change: After today's remarks, we will open the call up for a Q&A session.
Speaker Change: We will post the transcript of the call on baskets Investor website, following the conference call.
Mike Daniel: During today's call, certain statements we make may be considered forward-looking and inherently involve risks and uncertainties that could cause actual results to differ materially from management's present view. These statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Company cannot agree to or cannot guarantee the accuracy of any forecast or estimate, nor does it take any obligation to update such forward-looking statements. For more information, including important cautionary notes, please see the company's annual report on Form 10-K for the fiscal year ending November 30, 2024. Other filings with the SEC describing risks related to our business are available on our corporate website under the Investor tab.
Speaker Change: During today's call certain statements, we make may be considered forward looking and inherently involve risks and uncertainties that could cause actual results could differ materially from management's present view.
Speaker Change: These statements are made pursuant to the safe harbor provision of the <unk>.
Speaker Change: Private Securities Litigation Reform Act of 1995 company cannot agreed to or cannot guarantee the accuracy of any forecast or estimate nor.
Speaker Change: Nor does it take any obligation to update such forward looking statements.
Speaker Change: For more information, including important cautionary notes.
Speaker Change: Please see the company's annual report on Form 10-K for the fiscal year ending November 32024.
Speaker Change: Other filings with the SEC, describing our risks related to our business are available on our corporate website under the Investor tab.
Rob Spilman: Now I'll turn things over to Rob. Okay. Thank you, Mike.
Rob Spillman: Now I'll turn things over to Rob Rob.
Rob Spillman: Okay. Thank you Mike.
Rob Spilman: Good morning, everyone, and thank you for joining. One year ago this quarter, Bassett announced a five-point restructuring strategy designed to grow business. and Improved Profitability. We've been aggressively implementing that plan. which included development of a pipeline of innovative products to support our reputation as a company that provides quality craftsmanship in the wholesale and retail channels. and Custom Design Services. All of us in the Bassett organization remain focused on executing these initiatives to meet these goals and reduce costs. I'm happy to report that second quarter results have improved again like last quarter. This is probably a very challenging sales environment that affects Bassett and our entire industry.
Rob Spillman: Good morning, everyone and thank you for joining us.
Rob Spillman: One year kind of this quarter Baskin announced at that point.
Rob Spillman: Structuring strategy designed to grow the business.
Rob Spillman: And improved profitability.
Rob Spillman: We've been aggressively implementing that plan.
Rob Spillman: Which included development of our pipeline of innovative products that support our reputation as a company provides quality craftsmanship and the wholesale and retail channels.
Rob Spillman: And custom design services.
Speaker Change: Oh the battery.
Rob Spillman: We're making progress.
Rob Spillman: Okay.
Rob Spillman: Since the peak days.
Rob Spillman: Costs.
Rob Spillman: I'm happy to report second quarter results.
Rob Spillman: Like last quarter.
Rob Spillman: Despite a very challenging sales environment.
Rob Spillman: Our entire industry.
Rob Spilman: December Space, Historically Weak Housing Market, High Interest Rates, and Uncertainty about the impact that the Great Gap has had on the cost of goods. This lack of confidence makes them very hesitant about investing in home furnishings right now. We believe that our restructuring program continues to have a positive effect on our results and our future strategy. We grew consolidated sales slightly, up 1.1% from last year's second quarter. excluding sales from NOAA Homes. Incorporated, which closed in late 2024. consolidated revenue from the ongoing business increased 2.5%. Efforts to reduce our cost structure that began this time last year.
Rob Spillman: Consumer spaces, historically weak housing market.
Rob Spillman: Interest rates.
Rob Spillman: Great.
Rob Spillman: Okay.
Rob Spillman: There is a lack of confidence makes them very hesitant about investing in home furnishings right now.
Rob Spillman: We believe that our restructuring program continues to have positive effect on our results and our future strategy.
Rob Spillman: We grew consolidated sales slightly up one 1% from last year's second quarter.
Rob Spillman: Excluding sales from NOLA.
Rob Spillman: Incorporated which closed in late 2024.
Rob Spillman: Consolidated revenue from the ongoing business increased two 5%.
Rob Spillman: Efforts to reduce our cost structure again this time last year.
Rob Spilman: coupled with higher levels of operating efficiency in both our wholesale and retail segments. delivered $2.5 million of operating profit or 3% of sales. compared to a loss this time last year.
Rob Spillman: Coupled with higher levels of operating efficiency in both our wholesale and retail segments.
Rob Spillman: $2 5 million of operating profit or 3% of sales compared to a loss. This time last year.
Rob Spillman: Before I get too detailed comments for the second quarter, it's important to reiterate.
Rob Spilman: Before I get to our detailed comments for the second quarter, it's important to reiterate how tough the housing and remodeling environment is in 2025. and we don't see that changing for the foreseeable future. The spring is normally the busiest time of the year for housing sales. and that activity flows to the home furnishings industry. Recent headlines pointed to data from the National Association of Realtors showing existing home sales edged up 0.8% in May. ending a two-month streak of decline. However, that was the slowest pace for any May since 2009. Affordability remains a drag on housing, and like others, we're watching for some form of stimulus to spur mortgage activity.
Rob Spillman: The housing and remodeling environment is in that in 2025.
Rob Spillman: And we don't see that changing for the foreseeable future.
Rob Spillman: The spring is normally the busiest time of the year for housing sales.
Rob Spillman: And that activity close to the home furnishings industry.
Rob Spillman: Recent headlines I wanted to data from the National Association of Realtors, showing existing home sales adds that 0.8% in may.
Rob Spillman: Ending at two months Stryker declines.
Rob Spillman: However that was the slowest pace for any may since 2009.
Rob Spillman: Affordability remains a drag on housing and like others, we're watching for.
Rob Spillman: Some form of stimulus to spur mortgage activity.
Rob Spilman: and Greater Home Sales and Remodeling Activity. Our strategic plan for this fiscal year was based on a continuation of the Teppan housing market and that has characterized the past three years. The decisions and the investments we have made on new lines and product launches, expanding e-commerce capabilities and modifying our marketing activities are making a difference. That said, we have had to adjust to the impact of tariffs. that have handled our supply chain, and more importantly, on consumer confidence in general. We are somewhat insulated versus others in the industry because almost 80% of our wholesale shipments are manufactured.
Rob Spillman: In greater home sales and remodeling activity.
Rob Spillman: Our strategic plan for this fiscal year was based on a continuation of the tap of the housing market and that his character that has characterized the past three years.
The decisions and investments we have made on new lines and product launches expanding e-commerce capabilities and modifying our marketing activities are making a difference.
Rob Spillman: That said, we have had to adjust to the impact of tariffs.
Rob Spillman: We have had on our supply chain and more importantly on consumer confidence in general.
Rob Spillman: We are somewhat insulated versus others in the industry, because almost 80% of our wholesale shipments are manufactured.
Rob Spilman: or assembled in our five U.S. factories. But the fabrics, plywood, componentry, and finished goods that we do import from countries like Vietnam and India made it necessary to raise wholesale prices. 3 to 5 percent and a quarter, something that we did not want to do in the current environment. We've also been successful in working intently with various fabric vendors to mitigate the effects of tariffs on further price hikes. We're closely watching the outcome of the final. trade agreements, and our teams are monitoring the tariff activity daily. as these challenges affect future orders and product in transit.
Rob Spillman: Or assembled and our five U S factory.
Rob Spillman: But the fabrics plywood componentry and finished goods that we do import from countries like Vietnam and India.
Rob Spillman: Made it necessary to raise wholesale prices.
Rob Spillman: <unk>, 5%.
Rob Spillman: Quarter.
Rob Spillman: Something that we did not want to do in the current environment.
Rob Spillman: We've also been successful in working intently with various fabric vendors to mitigate the effects of tariffs on further price hikes.
Rob Spillman: Closely watching the outcome in the final.
Rob Spillman: Trade agreements and our teams are monitoring the tariff activity daily.
Rob Spillman: As these challenges affect future orders and product in transit.
Rob Spillman: The Darling of Liberation Day April 2nd represented a direct line of demarcation.
Rob Spilman: The dawning of Liberation Day, April the 2nd, represented a direct line of demarcation. between the more robust order pace that started the year and the slowness we clearly saw in the second quarter. March sales started off fine, but the rest of the quarter was down. Orders to our combined corporate and licensed store network grew by 9.6%. where a wholesale business from the open market declined by 6.6%, thus netting a 2.7% increase in all wholesale orders for the period. Our core products, led by our true custom upholstery with last year's addition of leather, drove most of the year-over-year improvements.
Rob Spillman: Between the more robust the order pace that started the year and that slowness, we clearly saw in the second quarter.
Rob Spillman: Art sales started out fine, but the rest of the quarter was down.
Rob Spillman: Orders to our combined corporate and license store network grew by nine 6%.
Rob Spillman: While our wholesale business from the open market declined by six 6%.
Rob Spillman: Netting a two 7% increase and all wholesale orders for the period.
Rob Spillman: Our core products led by our true custom upholstery.
Rob Spillman: With last year's addition of weather drove most of the year over year improvement.
Rob Spilman: Domestic motion and reclining product was also strong. As discussed last quarter, we recommitted to whole home wood collections this year with three new offerings. The first, Copenhagen, is retailing well and we are very pleased with the reaction to the 35-piece Newberry collection. at the April Home Furnishings Market. Newberry will arrive in Bassett stores and independent retailers this fall. followed later by the Andorra Collection. Also in wood product, our new domestic Benchmade Hideaway Dining Program sold very well at wholesale this spring and will begin labor in our factory here in Virginia in July and August. bolstered in part by stronger sales in Q1.
Rob Spillman: Domestic motion and reclining products was also strong.
Rob Spillman: As discussed last quarter, we recommitted to the whole.
Rob Spillman: Wood collections this year with three new offerings, the burst Copenhagen is retailing well and we're very pleased with the reaction to the 35 piece Newberry collection.
Rob Spillman: The April furnishings market.
Rob Spillman: Newberry will arrive in bass stores and independent retailers this fall.
Rob Spillman: Followed later by the end of our collection also and what product are new domestic banks made hideaway dining program, so very well at wholesale this spring and.
Rob Spillman: And we will begin labor not factory here in Virginia in July and August.
Rob Spillman: Bolstered in part by stronger sales in Q1.
Rob Spilman: Corporate retail deliveries increased by 7.5%. and operating performance improved significantly compared to 2024. Written sales in the store has declined by 0.8%. Most of the key performance metrics were static during the quarter, although higher close ratios in the stores kept written sales almost flat while store traffic declined. Belt tightening from last year and restructuring in our marketing meant that we spent $1 million less in SG&A investment. on $3.8 billion more in delivered sales. The current pace of sales mandates that we continue to closely monitor all expenditures in the retail fleet. We've made progress on turning discontinued as-is inventory into cash.
Rob Spillman: Corporate and retail deliveries increased by seven 5%.
Rob Spillman: And operating performance improved significantly compared to 2024.
Rob Spillman: Written sales in the stores declined by 0.8%.
Rob Spillman: Most of the key performance metrics were static during the quarter, although higher close ratios and the stores get written sales almost flat.
While store traffic declined.
Rob Spillman: Belt tightening from last year in restructuring in our marketing, we spent $1 million less in SG&A investments 3.8 billion more and delivered sales.
Rob Spillman: The current pace of sales mandates that we continue to closely monitor all expenditures into retail fleet.
Rob Spillman: We've made progress on turning discontinued ads is inventory into cash.
Rob Spilman: And while the discounting will modestly affect retail gross margin, this plan is in place for the rest of the year. Wholesale sales to customers outside the Bassett store network were a mixed bag, but ultimately down by 6.6%. I noted earlier that March was strong and almost all of the decline here occurred in April. The decline was largely due to lower sales in our club-level program, particularly with those accounts that generally buy containers directly from our vendors in Asia. There has been a natural hesitancy from these dealers to commit to imported goods in large quantities until greater clarity is attained on the tariff question.
Rob Spillman: And while the discounting were modestly affect retail gross margin. This plan is in place for the rest of the year.
Rob Spillman: Wholesale sales to customers outside the benefit store network or a mixed bag, but ultimately down by six 6%.
Rob Spillman: I noted earlier that March was strong in almost all of the decline here occurred in April.
Rob Spillman: The decline was largely due to lower sales and our club level program, particularly.
Rob Spillman: With those accounts that generally back containers directly from our vendors in Asia.
Rob Spillman: There has been a natural hesitancy from these dealers to commit to imported goods in large quantities.
Rob Spillman: Greater clarity is attained on the tariff question.
Rob Spilman: Once again, we are looking forward to getting the large product introduction from the April show on the retail floors this fall, as we felt we had a particularly strong Market Applacements, and I. We're also encouraged by the progress from investments in our omni-channel model to enhance the retail customer experience. Written sales at BassettFurniture.com were up 31% in the second quarter versus last year. despite the housing issues, and this follows an increase of 36% in Q1. While website traffic was flat for the quarter, we have much higher levels of conversion and we're reaching customers where we don't have physical stores.
Rob Spillman: Once again, we are looking forward to getting the large product introduction from April one to retail floors. This fall as we felt we had a particularly strong.
Rob Spillman: Market of placements in April.
Rob Spillman: We're also encouraged by the progress from investments in our omni channel model to enhance the retail customer experience.
Rob Spillman: Written sales at Bassett furniture Dot com were up 31% in the second quarter versus last year.
Rob Spillman: Despite the housing.
Rob Spillman: This follows an increase of 36% in Q1.
Rob Spillman: While website traffic was flat for the quarter.
Rob Spillman: We have much higher levels of conversion.
Rob Spillman: We're reaching customers, where we don't have physical stores.
Rob Spilman: We continue to tweak the technology drivers to improve traffic, the user experience, and our site conversion. We made changes to our marketing mix in the second quarter to drive brand awareness, introduce new product lines, and to emphasize our custom design service. Last year, we relied exclusively on digital marketing for the quarter. This spring, we had success in using direct mail for the launch of the Copenhagen line and is now part of our marketing strategy for the remainder of the year. We tested SPOT TV in key markets with mixed results. We brought back our private sale to key customers three weeks ahead of the public Memorial Day sales event, allowing them to get ahead of the rush.
Rob Spillman: We continue to tweak the technology drivers to improve traffic.
Rob Spillman: Our experience and our site conversions.
Rob Spillman: We made changes to our marketing mix in the second quarter to drive brand awareness and introduce new product lines and to emphasize our custom design services.
Rob Spillman: Last year, we relied exclusively on digital marketing for the quarter.
Rob Spillman: This spring we had success in using direct mail for the launch of the Copenhagen line.
Rob Spillman: And is now part of our marketing strategy for the remainder of the year.
Rob Spillman: We tested spot television in key markets with mixed results.
Rob Spillman: We brought back our private sale to key customers three weeks ahead of the public Memorial day sales event.
Rob Spillman: And then to get ahead of the rash.
Rob Spilman: and have more opportunity in inventory. This strategy effectively pulled our holiday business forward and resulted in a slight increase in written business for the month of May. Promotional events like July 4th are key to driving traffic. which was weak for Jim. Our new Bassett Custom Studio program in the open market grew by double digits. as we added seven new retail stores. We also grew our business with the interior design community and are working hard to become a bigger provider to the design channel that continues to grow in importance. and the entire industry.
Rob Spillman: And have more opportunity in inventory.
Rob Spillman: This strategy effectively pulled our holiday business forward and resulted in a slight increase in written business for the month of May.
Rob Spillman: Promotional events.
Rob Spillman: <unk> are key to driving traffic, which was weak for Jim.
Rob Spillman: Our new bass at custom studio program.
Rob Spillman: In the open market grew by double digits as we added seven new <unk>.
Rob Spillman: Retail stores, we also grew our business with the interior design community.
Rob Spillman: And are working hard to become a bigger provider to the desired channel that continues to grow in importance.
Rob Spillman: The entire industry.
Rob Spillman: We are moving ahead with architectural plans to open in two new markets.
Rob Spilman: We are moving ahead with architectural plans to open in two new markets. Cincinnati, and Orlando. We plan to start construction this fall on both locations. and expect to have these doors open in the first quarter of fiscal 2026.
Rob Spillman: Cincinnati and Orlando.
Rob Spillman: Plan to start construction this fall.
Rob Spillman: Actions.
Rob Spillman: And expect to have these stores opened in the first quarter of fiscal.
Rob Spillman: Fiscal 2026.
Rob Spilman: Our Concord, North Carolina corporate store has been closed since April, remodeling. and we'll reopen in October.
Rob Spillman: Concord, North Carolina corporate store has been closed since April of remodeling and will reopen in October.
Rob Spillman: Our board of directors will consider a regularly regular quarterly cash dividend of <unk> 20 per share next week.
Rob Spilman: Our board of directors will consider our regular quarterly cash dividend of 20 cents per share next week. Dividends augmented by opportunistic share repurchase remain a key piece of our capital returns to shareholders.
Rob Spillman: Dan.
Rob Spillman: By opportunistic share repurchase remain a key piece of our capital returns to shareholders.
Mike: Now I'll turn things back over to Mike.
Mike Daniel: Now I'll turn things back over to Mike for more details on our financial results. Mike. Thanks, Rob. In my commentary, the comparisons I'll discuss will be the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024 unless otherwise noted. As Rob previously noted, total consolidated revenue increased $938,000 or 1.1 percent. And again, excluding sales from NOAA Home Inc, which closed in late 2024, consolidated revenues increased 2.5 percent. Consolidated gross margin at 55.6% represented a 310 basis point improvement over the prior as the company recorded $2.7 million of additional inventory valuation charges in the prior quarter.
Mike: More details on our financial results Mike.
Mike: Thanks, Rob in my commentary the comparisons I'll discuss will be the second for fiscal 2025 compared to the second quarter of fiscal 2024, unless otherwise noted.
Mike: As Rob previously noted total consolidated revenue increased $938000 or one 1% and again excluding sales from <unk>.
Mike: <unk> closed in late 2024 consolidated revenues increased two 5%.
Mike: Consolidated gross margin at 55, 6% represented a 310 basis point improvement over the prior year.
Mike: As the company recorded $2 $7 million.
Mike: Additional inventory valuation charges in the prior quarter.
Mike Daniel: excluding those charges, gross margin would have been essentially flat. Selling general and administrative expenses were 52.7% of sales, 330 basis points lower than the prior year, reflecting benefits from the prior year restructuring program and ongoing cost optimization activity. Operating income was $2.5 million or 3% of sales as compared to a prior loss of $8.5 million, which included $5.5 million of asset impairment charges and the additional inventory valuation charges previously mentioned.
Mike: Excluding those charges gross margin would have been essentially flat.
Mike: Selling general and administrative expenses were 52, 7% of sales 330 basis points lower than the prior year, reflecting benefits from the prior year restructuring program.
Mike: And ongoing cost optimization activities.
Mike: Operating income was $2 $5 million or 3% of sales as compared to our prior loss of $8 $5 million, which included.
Mike: $5 5 million of asset impairment charges and the additional inventory valuation charges previously mentioned.
Mike: Diluted earnings per share were 22 cents versus a loss of 82 cents.
Mike Daniel: Diluted earnings per share were 22 cents versus a loss of 82 cents.
Mike Daniel: Now let me cover more details on the wholesale operations. Net sales increased $1.6 million or 3% over the prior year. consisting of a 12.6% increase in shipments to our Bassett retail store network. partially offset by a 2.6% decrease in shipments to the open market. and a 22% decrease in Lane Ventures shipment.
Mike: Now, let me cover more details on the wholesale operations.
Mike: Net sales increased one $6 million or 3% over the prior year.
Mike: Consisting of a 12, 6% increase in shipments to our bass retail store network.
Mike: Partially offset by a two 6% decrease in shipments to the open market.
Mike: And a 22% decrease in lane venture shipments.
Mike Daniel: This was primarily related to timing of shipments for a significant customer. Gross margins increased 260 basis points over the prior year, excluding the $1.7 million of additional wholesale inventory valuation charges in the prior year period. gross margins would have decreased. by 70 basis points, primarily due to the prior year reduction.
Mike: This was primarily related to timing of shipments for a significant customer.
Mike: Gross margins increased 260 basis points over the prior year, excluding the $1 7 million of additional wholesale inventory valuation charges in the prior year period.
Mike: Gross margins would have decreased.
Mike: By 70 basis points, primarily due to the prior year reduction in the warranty and returns reserves from improved experience and administration and Warrantee returns claims.
Mike Daniel: in the Warranty and Returns Reserve from Improved Experience in Administration in Warranty and Returns Claim. SG&A expenses as a percentage of sales decreased 190 basis points. primarily due to lower bad debt expenses, coupled with the benefit of cost reductions implemented during the second half of fiscal 2024.
Mike: SG&A expenses as a percentage of sales decreased 190 basis points.
Mike: Primarily due to lower bad debt expenses, coupled with the benefit of cost reductions implemented during the second half of fiscal 2024.
Mike: Wholesale backlog was $18 4 million as compared to 21 $8 million from November 32024, and.
Mike Daniel: Wholesale backlog was $18.4 million as compared to $21.8 million on November 30, 2024 and $19.4 million at June 1, 2024.
Mike: And $19 4 million at June <unk> 2024.
Mike: Now moving on to the retail store operations.
Mike Daniel: Now, moving on to the retail store operation. Net sales increased $3.8 million or 7.5%. Written sales, the value of sales orders taken but not delivered declined 0.8%. Gross margin declined 50 basis points. excluding the $500,000 of additional inventory valuation charges in the prior year period. gross margins would have decreased by 140 basis points. due to lower margins for both in-line and clearance goods. As Rob mentioned, we are more aggressive in cycling through unproductive inventory. SG&A expenses as a percentage of sales decreased 580 basis points due to several factors. Improved efficiency gains in warehouse and delivery operations, lower advertising and marketing expenditures, and overall lower operating costs.
Mike: Net sales increased $3 8 million or seven 5%.
Mike: Written sales the value of sales orders taken but not delivered declined <unk>, 8%.
Mike: Gross margin declined 50 basis basis points.
Mike: Excluding the $500000 of additional inventory valuation charges in the prior year period.
Mike: Gross margins would have decreased by 140 basis points.
Rob Spillman: Due to lower margins for both inline and clearance goods as Rob mentioned, we are more aggressive and cycling through unproductive inventory.
Mike: SG&A expenses.
Mike: Percentage of sales decreased 580 basis points due to several factors improved.
Mike: Improved efficiency gains in warehouse and delivery operations, lower advertising and marketing expenditures and overall lower operating costs.
Mike Daniel: Retail backlog was $34.1 million compared to $37.1 million at November 30, 2024. and $31.5 million at June 1st, 2024.
Mike: <unk> backlog was $34 $1 million compared to $37 1 million at November 32024.
Mike: 31 $5 million at June <unk> 2024.
Mike: Our liquidity position remains solid we generated $7 million in operating $7 million I should say in operating cash flow during this quarter.
Mike Daniel: Our liquidity position remained solid. We generated $7 million in operating cash flow during this quarter and ended with $59.8 million of cash in short-term investment. and have no outstanding debt.
Mike: And it ended with $59 $8 million of cash and short term investments and have no outstanding debt.
Mike Daniel: We've reduced our projected range of annual capital investment in our business to between $7 million and $9 million, primarily to cover remodels of existing stores, the ongoing investments in technology, including e-commerce, and the two new store openings Rob mentioned. We continue to pay our quarterly dividend and repurchase shares opportunistically. We've spent $1.7 million on dividends, $400,000 on share buybacks in the second quarter. We remain committed to delivering shareholder returns through dividends and, when appropriate, share buybacks.
Mike: We've reduced our projected range of annual capital investment in our business to between $7 million and $9 million, primarily to cover remodels of existing stores the ongoing investments in technology, including E Commerce and the two new store openings Rob mentioned.
Mike: We continue to pay our quarterly dividend and repurchase shares Opportunistically, we spent $1 $7 million on dividends 40, $400000 on share buybacks in the second quarter.
Mike: We remain committed to delivering shareholder returns through dividends and when appropriate share buybacks.
Mike: Now we will open up the line for questions Libya, Please provide instructions to do so.
Operator: Now we'll open up the line for questions. Livia, please provide instructions to do so. Certainly. To ask a question at this time, you will need to press star 1 1 on your telephone and wait for your name to be announced. Please stand by while we compile the county roster.
Speaker Change: To ask a question at this time, you will need to press star one on your telephone and planning to be announced.
Tim Wilmott: Please Tim Wilmott combined Kenny roster.
Speaker Change: Yeah.
Brian Gordon: Our first question coming from the line of Brian Gordon with Watertower Research, Yolanis Malopin. Good morning, everyone, and congratulations on what I think has been a good quarter in a very tough environment. I guess my first question is with the seven new design studio signups, where does that put you right now in terms of the total? And where do you think that might land by end of year?
Speaker Change: Our first question coming from the line of Brian Gordon with <unk> Research. Your line is now open.
Brian Gordon: Good morning, everyone and congratulations on what I think has been.
Speaker Change: Good quarter, and a very tough environment.
Speaker Change: I guess my first question is with the seven new design studio sign ups.
Speaker Change: Where does that Q right now in terms of the total and where do you think that might land by end of the year.
Rob Spillman: Good morning, Brian This is Rob.
Rob Spilman: Morning Brian, this is Rob. That puts us I think it's 54 of these. Zant Studios Boy, that's a good question in terms of... The banks of this, I, I, I. I really believe that the pace will... that we did. revealed will be reflective of the ongoing pace. so you can extrapolate from there. You know, the really good news on this thing is that Well, one, it's... Not a steep barrier of entry for the dealer. As we've said before, also, once he makes that initial inventory of the display floor samples You really, all the inventory purchasers are sold orders.
Speaker Change: That.
Speaker Change: That puts us.
Speaker Change: I think at 54 days.
Speaker Change: Does that in studios.
Speaker Change: Boy.
Speaker Change: That's a good question in terms of.
Speaker Change: The banks.
Speaker Change: Pat.
Speaker Change: I really believe that the pace will.
Speaker Change: That wages.
Speaker Change: Revealed.
Speaker Change: Be reflective of that.
Speaker Change: Ongoing pace.
Speaker Change: So you can extrapolate from there.
Speaker Change: They're really good news on this thing is that.
Speaker Change: Well one it's.
Speaker Change: Not a steep barrier of entry for the dealer.
Speaker Change: As we've said before also.
Speaker Change: Once he makes that initial inventory.
Speaker Change: Display floor samples.
Speaker Change: Really all of the inventory purchasers are sold orders.
Speaker Change: It's really.
Rob Spilman: that leverages our service capabilities and the fact that we can get these custom orders out of the factories that are quick. So the salespeople don't have to wait if they're paid on delivered sales. They don't have to wait on this forever because we can get it out quickly. So without a big inventory investment and with a lot of turn on this, we feel really good about how this thing is going to play out over time. Yes, we'd love to have more of them, but more importantly is the monitoring the success and the performance of the ones that we've opened.
Speaker Change: Leverages, our service capabilities and the fact that we can get these custom orders out of the factory so quickly.
Speaker Change: So as the salespeople don't have to wait if they're paid on delivered sales. They don't have to wait on this forever.
Speaker Change: We can get it out quickly so.
Speaker Change: A big inventory investment and with a lot of turn on this.
Speaker Change: We felt really good about how this thing is going to play out over time.
Speaker Change: Yes.
Speaker Change: Would love to have more of them, but more importantly.
Speaker Change: As they.
Speaker Change: Monitoring the success and the performance of the ones that we've opened because if that is it for <unk>.
Rob Spilman: because if that... were successful there, then. You've got something that will stand the test of time and We do a lot of. work on.
Speaker Change: Successful there then.
Speaker Change: <unk> got something that will stand the test of time and.
Speaker Change: We do a lot of.
Speaker Change: Work on.
Brian Gordon: Thank you. just gauging how these guys are doing, the ones that have opened. And that that's what is really exciting to us because. It's working. So... It's going to be something that we talk about for some time, but that pace of... 6, 7, 8, a quarter I think is attainable and one that at least in the foreseeable future we can execute on. Thank you for that update.
Speaker Change: Just gauging how these guys are doing the ones that have opened and that that's what is really.
Speaker Change: Exciting to us because.
Speaker Change: It's working so.
Speaker Change: Yeah.
Speaker Change: It's going to be something that we talk about for some time and.
But that pace of.
Speaker Change: Seven eight.
Speaker Change: I think what is it.
Speaker Change: <unk> and.
Speaker Change: <unk> that.
Speaker Change: At least for the foreseeable future we can execute on.
Speaker Change: Thank you for that.
Brian Gordon: You alluded to what I was going to ask for my follow-up.
Speaker Change: And you alluded to whether it's going back to the market.
Speaker Change: My follow up.
Rob Spilman: What kind of metrics can you share about how these design studios are actually maturing and what that actually looks like over time? Well, You know, but we obviously look at how much volume they are. producing from that 1,000 square foot footprint and so we haven't shared that externally and we we haven't boiled that down because You know, you are inside someone else's furniture store and sometimes getting the data that we can get with our own stores. is a little more difficult, but. Let's just say that our dealer base is pleased with that and we're pleased with what's happening.
Speaker Change: How what kind of metrics can share about how these design studios are actually maturing and what that actually looks like.
Speaker Change: Over over time.
Speaker Change: Well.
Speaker Change: But we obviously look at how much by them.
Speaker Change: <unk>.
Speaker Change: <unk>.
Speaker Change: Producing from that one.
Speaker Change: 1000 square foot.
Speaker Change: Footprint and so we haven't shared that externally.
Speaker Change: And we havent boiled that down but costs.
Speaker Change: You are inside someone else's furniture store and sometimes getting the data that we can get with our own stores as is a little more difficult but.
Speaker Change: Let's just say that.
Speaker Change: Our dealer base is pleased with that and we're pleased with what's happening.
Rob Spilman: We have been talking about a more granular set of outcomes. that we can trumpet and that we can hopefully attract new dealers with. And we're in the lab right now working on that. Great, great.
<unk> been talking about.
Speaker Change: More.
Speaker Change: Granular.
Speaker Change: Set of metrics that we can trumpet and that we can.
Speaker Change: Hopefully.
Speaker Change: <unk>, new dealers with and.
Speaker Change: We're in the lab right now working on that.
Speaker Change: Great Great. Thank you like you can get and maybe one more question before turning it over.
Brian Gordon: Thank you.
Anthony Lebiedzinski: If I can get in maybe one more question before turning it over. The last several markets, you've definitely been highlighting the design trade as a major initiative. Could you talk about how that's going? And then maybe as a quick follow-up to that, have there been any differences that you've seen since the tariffs with the design trade side of the business versus the stores and design studios and third parties? You know, we are scratching the surface on the design trade, and You know, our focus has been. on Retail and on our website. on our dedicated distribution, our galleries, Bassett Design Centers, and the Custom Studios we just talked about.
Speaker Change: The last several markets.
Speaker Change: Definitely been highlighting the design trade as a major initiative could you talk about how thats going and then maybe as a quick follow up to that.
Speaker Change: Has there been any differences that you've seen since the tariffs with the design trade side of the business versus the stores and design Studios and third party.
Speaker Change: Yes.
Speaker Change: <unk>.
Speaker Change: We are scratching the surface on that does that and trade.
Speaker Change: Fine.
Speaker Change: Our focus has been.
Speaker Change: On retail and on our.
Our dedicated distribution.
Speaker Change: <unk>.
Speaker Change: Does that centers in the past subsidiary as we just talked about.
Rob Spilman: and appropriately so. We've got capital invested and a network and all of those things. And I would say that we have We are somewhat late to the party on this whole migration. of the business to the design trade, which According to the officials down in High Point, over 60% of the attendees now are from our designer. So this is a big shift, and the higher end, and there's a whole a section of town down there now that is dedicated to the design trade. What's exciting for us is that what we do every day in the stores and in our dedicated distribution, in other words, make things one at a time and on a custom basis quickly, we do COM, we do a lot of things that designers use every day.
Speaker Change: And appropriately said, we've got capital invested in.
Speaker Change: Network in all of those things.
Speaker Change: And I would say that we have.
Speaker Change: We are somewhat late to the party.
Speaker Change: This hole.
Speaker Change: Migration.
Speaker Change: The business to the desired trait, which.
Speaker Change: According to the officials down in high point over 60% of the a 10 days now.
Speaker Change: Our.
Speaker Change: From our designers.
Speaker Change: Yes.
Speaker Change: Mix shift and the higher end and Theres a whole.
Speaker Change: Section of town down there now that is dedicated to the design trade.
Speaker Change: So.
Speaker Change: What's exciting for US is that what we do every day in the stores and our dedicated distribution in other words make things one at a time.
Speaker Change: And accustomed basis quickly.
Speaker Change: We do see OEM, we do we do a lot of things that designers.
Speaker Change: Use everyday.
Rob Spilman: So the progress. is always slower than we want. I will say the sales in that trade were up double digits for the quarter. So that's good, but we are doing things with our systems, with management, and bringing on a couple new folks. to get really noticed in this area.
Speaker Change: So the progress.
Speaker Change: As always slower than we want.
Speaker Change: I will say that.
Speaker Change: Sales in that trade.
Speaker Change: Double digits for the quarter.
Speaker Change: Sure.
Speaker Change: So that's good.
Speaker Change: But we are doing things with our systems.
Speaker Change: Management.
Speaker Change: And bring it down a couple of new folks.
Speaker Change: To get to get really noticed in this area.
Speaker Change: So.
Rob Spilman: Stay tuned on that because we really think we can grow that channel. hair of an adult. I don't think the tariff has been particularly impactful to the design for us. As a matter of fact, I would say less so than retail, that the retail is so calls conscious and such a tight of operating benefits. We don't see that as much in the design trade. The design trade needs to have one great product line and two great service and communication. Those are kind of the basic tenets of being successful there. But they're not slicing that onion down to the penny like we see in retail, which is tough on the retail side.
Speaker Change: Stay tuned on that because we really think we can we can grow that channel as far as that.
Speaker Change: The tariffs.
Speaker Change: I don't.
Speaker Change: I don't think the tariff has been particularly.
Speaker Change: Impactful to the design right as a matter of fact I would say.
Speaker Change: Less so than retail.
Speaker Change: Retail is so.
Speaker Change:
Speaker Change: Cost conscious and set such a.
Speaker Change: Tight.
Speaker Change: Set of operating metrics, we don't see that as much and that does that trade that does that rate needs to have one great product lines and to great service and communication those are kind of the basic tenants of.
Speaker Change: <unk> successful, there, but theyre not slicing that down to the penny like way.
Speaker Change: In retail, which.
Speaker Change: It's tough on the.
Speaker Change: The retail side so.
Rob Spilman: I don't think the tariff is really... impacted the design business very much.
Speaker Change: I can't really.
Speaker Change: I don't think the.
Speaker Change: Tariff is really.
Speaker Change: Impacted that does that business very much.
Speaker Change: Okay. Thank you that's very helpful.
Anthony Lebiedzinski: Okay, thank you.
Anthony Lebiedzinski: That's very helpful.
Anthony Lebiedzinski: Best of luck with the quarter. Thank you.
Speaker Change: Best of luck with the quarter.
Speaker Change: Thank you. Thank you.
Speaker Change: Thank you.
Anthony Lebiedzinski: Our next question coming from the line of Anthony Lebiedzinski from Sodori, Yelena Smelvin. Good morning, gentlemen. And thank you for taking the questions. Great to see you guys reporting a year-over-year sales gain, even in a tough environment. So, first, just a follow-up about the shipments that you guys talked about. You had a nice increase in shipments to your Bassett stores and a decrease in the open market. I think, Mike, you said that some of it was timing related to a significant customer. So, should we see a reversal of that timing in the third quarter, or how should we think about that?
Speaker Change: Our next question is coming from the line of Anthony <unk> from Sidoti. Your line is now open.
Anthony: Good morning, gentlemen, and thank you for taking the questions great to see you guys reporting a year over year sales gains.
Speaker Change: A tough environment.
Speaker Change: So firstly, just a follow up about the.
Speaker Change: The shipments that you guys talked about the <unk>.
Speaker Change: Had a nice increase in the shipments to your bass stores and a decrease in the open market I think Mike you said that some of it was timing related to a significant customer so should we see a reversal of that timing.
Speaker Change: The third quarter or how should we think about that.
Mike Daniel: Well, let me let me just clarify the significant customer that I was referring to related to lane venture shipments only, which so not the the rest of the open market. We just wanted to put some color beside the fact that we had a 22 percent decrease in lane venture. Gotcha. We saw that as somewhat of an anomaly based on the orders we received at Lane Furniture in the second quarter, which were much, much better than 22% decline, so. Yes. Anyway, Mike and I debated about whether we should include that, because it is somewhat, but since we have been reporting on LandVenture and pulling that out, he won out and we did it.
Speaker Change: But let me let me just clarify.
Speaker Change: The significant customer that I was referring to related to lane venture shipments only.
Speaker Change: So not the rest of the open market, we just wanted to.
Speaker Change: Some color beside the fact that we had a 22%.
Speaker Change: Decrease in like venture.
Speaker Change: Got you and.
Speaker Change: Wait.
Speaker Change: We saw that as somewhat of an anomaly based on the orders we received at land venture in the second quarter, which were.
Speaker Change: Much much better than.
Speaker Change: 22% decline so yes.
Speaker Change: Anyway, I can add debated about whether we should include that.
Speaker Change: Yes. It is.
Speaker Change: Since we have been reporting online venture.
Speaker Change: And pulling that out.
Speaker Change: Went out and we did it.
Rob Spilman: Again, you know, so the question is, are we going to see a correction in the open market? And It has improved somewhat since then, since the second quarter, even though business remains very tough, and a lot, when I said in my remarks, Anthony, you know, the biggest real factor not including Lane Venture and the quarter with the open market was the club levels. And a lot of these guys, you know, we 30-40% of our business. Pueblo is container direct. and the rest we warehoused and, you know, they bought one at a time. And we really had to fall off in the container directly.
Speaker Change: So the question is.
Speaker Change: Are we going to see a correction in the open market and.
Speaker Change: It is.
Speaker Change: Proved.
Speaker Change: Somewhat since then since the.
Speaker Change: Second quarter, even though business remains very tough.
Speaker Change: Bob.
Speaker Change: And Ah.
Speaker Change: What I said in my remarks Anthony.
Speaker Change: Biggest real factor.
Speaker Change: Not including land venture in the quarter with the open market was the club levels.
Speaker Change: And a lot of these guys.
Speaker Change: Wait.
Speaker Change: 30, 40% of our business.
Speaker Change: And.
Speaker Change: Hello Boys container direct.
Speaker Change: And.
Speaker Change: The rest we warehouse.
Speaker Change: They buy one at a time.
Speaker Change: And we really had to fall off in the container direct.
Rob Spilman: of the entire club level business in the quarter. And a lot of these guys were going, well, we're just going to wait and see how these. play out before we commit to having goods on the water that may have a... You know, at the time, of course, I think. 46% on April 2nd of Vietnam. which obviously that's changed since then but so that that that whole period there was. was detrimental to the... to the open market shipments.
Speaker Change: Club level business in the quarter and a lot of these guys are all well, we're just going to wait and see how these tariffs.
Speaker Change: Play out before we commit to.
Speaker Change: Haven't goods on the water that they have.
Speaker Change: At the time of course.
Speaker Change: I think it was.
Speaker Change: 46% on April 2nd.
Speaker Change: Vietnam.
Speaker Change: Obviously, that's changed since then but.
Speaker Change: That that whole period there was.
Speaker Change: Was detrimental to the.
Speaker Change: Did they open market shipments now.
Mike Daniel: Now. Look, it's still tough out there for the open market guys, too. These independent retailers are not immune from this. And so we have to fight like the dickens to keep this channel growing. And we feel pretty good about where we're headed with that and better than. better, hopefully, than we just showed. And Anthony, if you remember Rob's comment on the pace during the quarter, you know, he spoke about Liberation Day and the demarcation and how April was really soft. and I think it was, was that related solely to club level, Rob? Yeah, primarily, yeah.
Speaker Change: Right.
Speaker Change: It's still tough out there for the open market guys say these independent retailers are not immune from this is that we have to.
Speaker Change: The fight like the Dickens to keep this channel growing in that way we.
Speaker Change: We feel pretty good about where we're headed with that and better than.
Speaker Change: Better hopefully then we discharge it.
Speaker Change: And Anthony if you remember Rob Scott.
Speaker Change: On the pace during the quarter.
Speaker Change: Mhm.
Speaker Change: They spoke about liberation day in the <unk>.
Speaker Change: How April.
Speaker Change: It was really.
Speaker Change: Solved.
Speaker Change: And I think it was that related solely to club level Rob.
Doug: Yeah, Doug.
Mike Daniel: So, uh... You know, the pace of business in May, while not great, was not like it was in April, and that's kind of carried over. into the third quarter. Right. Okay, so May was relatively better, so that's encouraging to hear.
Doug: The patient at the pace of business in value, while not not.
Doug: <unk> was not like it was in April and that's kind of carried over.
Doug: Into the third quarter right.
Doug: Okay.
Doug: May was relatively better so that's encouraging.
Mike Daniel: Now, in terms of the plans for discounting that you talked about a bit here, so You know, how should we think about the impact on margins? Overall, I mean, you had a slight sequential decline from first quarter to second quarter. Will we see more of that type of a Margin declined sequentially in the third quarter. Just directly, maybe you can help us out as to how to think about that. Well, we've been trying to model that internally. Anthony, because, you know, we really. We want to get this inventory as clean as we can. And so part of that sequential and we're talking about the retail price margin now.
Doug: In terms of.
Doug: The plants were discounting you talked about a bit here so.
Doug: How should we think about the impact our margins.
Doug: Overall, I mean, if you had a.
Doug: Slight sequential decline from first quarter, the second quarter.
Speaker Change: Will we see more of that type of.
Doug: Margin.
Doug: Climb sequentially in the third quarter or does this just directionally, maybe you can help us out is how to think about that.
Doug: Well.
Doug: We've been trying to model that internally.
Doug: Anthony because we really.
Doug: <unk>.
Doug: We wanted to get this inventory.
Doug: Claim as as we can and.
Doug: So part of that sequential and we're talking about the retail gross margin now.
Mike Daniel: that, not the consolidated. So ultimately, that's... So. Yeah, we did have a decline and We don't think. We will see a lot more. detriment to moving these goods out of some of these retail warehouses than we've seen, but it could be. It's hard for me to just give you a number, but I don't think it's going to be significant, but it could affect it slightly. We're running a clearance event right now, and we did a direct mail piece, and as a matter of fact, it came to my mailbox at the house last night. So we're running that, but we think it's a prudent thing.
Doug: That the consolidated so.
Doug: Ultimately that.
Doug: Affects the consolidated but but it's not.
Doug: The wholesale restaurants so.
Speaker Change: Yeah, we did have a.
Doug: Decline and.
Doug: We don't think so.
Doug: We will see a lot more.
Doug: Detriment to move in this good for these goods out.
Doug: Some of these retail warehouses than we've seen but.
Doug: It could be.
Doug: It's hard for me to just give you a number but I don't think it's going to be significant but it could affect it slightly.
Doug: We're running.
Doug: Our clearance event right now than we did a direct mail piece in a matter of fact payment my mailbox at the house last night.
Doug: So where we're running that at the end.
Doug: But we think as the <unk>.
Doug: <unk>.
Doug: Exercise too.
Rob Spilman: exercise to, uh, you know. be clean and then have a good balance. Yeah, keep in mind, you know, we're, we're trying to turn inventory into cash. and, you know, as Rob says, clean, mean, bad. Actually, more cash on the balance. That makes a lot of sense, certainly. And then...
Doug: Yeah.
Doug: The clean and then.
Doug: A good balance sheet.
Doug: Yes keep in mind.
Doug: We're trying to turn inventory into cash.
Doug: And.
Doug: Got it.
Doug: As Rob said, it's clean means.
Doug: Actually more cash on the balance sheet.
Doug: That makes a lot of sense, certainly and then.
Doug: Looking at.
Rob Spilman: Looking at your new store plans, so you're looking to do Cincinnati and Orlando. Beyond that, how do you guys think about the store base? Let's say two, three, five years from now. How do you guys see the store base going forward and any particular markets that you would like to be in that you're not in already? Sure, there are, and we look at this a lot of ways. you know, one. One, where do we have stores and where can we leverage existing investments in infrastructure and distribution and all that kind of stuff? And so that certainly is a fact.
Doug: Your store plans. So you are looking to do of Cincinnati and Orlando beyond that.
Speaker Change: Do you guys think about the store base.
Speaker Change: Let's say two three to five years from now.
Speaker Change: How do you guys see the the store base going forward and kind of any particular markets that you would like to be and that youre not in already.
Speaker Change: Sure.
Speaker Change: There are and we look at this a lot of ways.
Speaker Change: Yeah.
Speaker Change: One.
Speaker Change: One where do we have stores, where can we leverage existing.
Speaker Change: <unk> in infrastructure and distribution and all that kind of stuff and so that certainly is a factor.
Rob Spilman: Uh, you know, they're, they're There are markets that I got to admit that are fairly bereft of opportunities for us to sell furniture except the store, or through the design trade, given that You know, the demise of the independent retailer that we are seeing around the country, have seen for some time, years I'm talking about, with the high barriers of entry, the cost of real estate. So we look at those markets like, okay, if we've got an open market strategy here, who are we going to sell? You know, I've made a couple trips lately and you go around and you go, there's not a whole lot of opportunities in some of these markets.
Speaker Change: There.
Speaker Change: Their markets.
Speaker Change: It meant that our.
Speaker Change: Barely but raft of opportunities for us to sell furniture.
Speaker Change: Except with the store or.
Speaker Change: Through the design trade given that.
Speaker Change: The demise of the independent retailer that.
Speaker Change: We are seeing around the country at St for some time of years I'm talking about with the <unk>.
Speaker Change: A high barriers of entry of the cost of real estate.
Speaker Change: We look at we look at those markets like Okay. If we got an open market strategy here.
Speaker Change: Yeah.
Speaker Change: <unk>.
Speaker Change: I've made a couple of trips lately.
Speaker Change: You go around and you go.
Speaker Change: Hold on.
Speaker Change: And some of these markets so do.
Rob Spilman: So, so we look at that. We also look at the, the executional risk, the capital, the size of the company we are, the environment we're in. So, so we, you know, we're. All right.
Speaker Change: So we look at that.
Speaker Change: We also look at.
Speaker Change: The execution risk the capital.
Speaker Change: The SaaS company, we are the environment, we're in right. So.
Speaker Change: We are.
Speaker Change: Conservative.
Speaker Change: Appropriately so I think.
Rob Spilman: Thank you. Bye. You know, if you look at 2, 3, 4 stores a year for us. That's a pace that we can absorb. Four is a lot. Two is... Not that many, somewhere in between. But it's not like we're looking at a 20-storey rollout or anything like that, and we won't be. Now, in the meantime... We're trying to find the guy who sells nice furniture. There has been a huge migration to the lower end in this industry. So there is just a ton of low-end furniture being sold out there, what we call low-end anyway. So the guys who sell nicer furniture are fewer and farther between, and our guys are making a major presentation to one of those people this morning as we speak.
Speaker Change: Yeah.
Speaker Change: If you look at.
Speaker Change: Two three or four stores a year for us.
Speaker Change: That's a that's a base that we can absorb.
Speaker Change: Or is a lot.
Speaker Change: To us.
Speaker Change: Not that many sits somewhere in between but it's not like we're we're looking at a 20 store rollout or anything like that and we won't be there in the meantime.
Speaker Change: We're trying to find.
Speaker Change: The Guy who sells nice furniture.
Speaker Change: And there has been a huge migration to the lower end in this industry.
Speaker Change: So there is just a ton of low end furniture being sold out there what we call low end anyway. So the guys who sell nicer furniture are fewer and farther between then and now.
Speaker Change: Our guys are making a major presentation to one of those people. This morning as we speak.
Rob Spilman: And so we still... You know, we can't run all over the place lickety-split and do all these stores, so these independent dealers who sell nicer furniture are important to us, so we look at that, too. So it's kind of a Ouija board of all this stuff, and, um... But, you know, the good thing about the design channel is you can really do that anyway. and there are designers out there. in every market, a lot of them, now some of them are. you know, are kind of inconsequential and work out their dining room table. And then the other ones are more substantial.
Speaker Change: And.
Speaker Change: So we still.
Speaker Change: We can't we can't run all over the place Lickety split all these stores so.
Speaker Change: These independent dealers, who sell an extra furniture are important to us and we look at that too.
Speaker Change: Kind of a ouija board about this.
Speaker Change: Stuff.
Speaker Change: And.
Speaker Change: But the good thing about the does that channel is.
Speaker Change: You can really do that anywhere.
Speaker Change: And there are designers out there in.
Speaker Change: In every market.
Speaker Change: Some of them are.
Speaker Change: They are kind of inconsequential in work out there.
Speaker Change: Adding room table and then the other ones are.
Our more substantial say, you've kind of got to wait through all that but.
Rob Spilman: So you've kind of got to weed through all that, but. That's how we look at it. I hope I've answered your question, but it's not an easy answer.
Speaker Change: That's how we look at it I hope I answered your question, but it's it's not an easy answer.
Speaker Change: But matter of fact, we've got a board meeting next week and this this is this is the big topic, because we look at.
Mike Daniel: We, matter of fact, we've got a board meeting next week and this is the big topic as we look at. where we go and how we serve each market and it's an ongoing process. Anthony, I think, I think what we're, one thing we're saying. We do want to grow the number. Rob Kripke, if I'm wrong here, but grow the number of stores. over time. So while we're saying two to three stores, I think we're saying two to three. Net Stores. We definitely want to do that. All right. Well, that all sounds great.
Speaker Change: Where do we go and how we serve each market and it's an ongoing process.
Anthony: But Anthony I think.
Speaker Change: And one thing we're seeing.
Anthony: We do want to grow the number.
Rob: Rob Correct me, if I'm wrong here, but grow the number of stores.
Rob: Over time, so while we're while we're citing two to three stores I think we're saying two to three <unk>.
Rob: Net stores, yeah, Yeah, no we've definitely.
Rob: We definitely are.
Rob: I want to do that.
Rob: Alright.
Speaker Change: All sounds great well, thank you very much and best of luck.
Rob Spilman: Well, thank you very much and best of luck. Thank you, Anthony, Brian, and everyone else who's been on the call. You know, we, we, uh... announced our for restructuring a year ago, and we thank. We set the company on the right course to meet the challenges that we've already talked about with housing and consumer confidence. We really hadn't prepared for all the tariff activity and the issues. But we're working through that on a daily basis. And hopefully soon we will have complete clarity on that issue that affects our. We are pleased with our progress in the second quarter.
Speaker Change: Thank you Anthony.
Ryan: Ryan and everyone else has been on the call.
Speaker Change: We we.
Speaker Change: Announced hour.
Speaker Change: The restructuring a year ago and we.
Speaker Change: We think we.
Speaker Change: We've set the company on the right course to meet the challenges that we've already talked about housing and consumer confidence.
Speaker Change: Hadn't prepared for all of the tariff.
Speaker Change: Activity added issues and.
Speaker Change: But we're working through that on a daily basis.
Speaker Change: And hopefully we will have complete clarity on that.
Speaker Change: That issue debt.
Speaker Change: Effects are.
Speaker Change: Supply chain, we are pleased with our progress in the second quarter.
Rob Spilman: We're optimistic that the investments we've made in our new product lines and our emphasis on integrating Bassett. further into the interior design community will provide competitive advantages. through for the future. continue to manufacture almost 80% of our product here in the U.S. remain intensely focused on operating efficiencies and cost reduction. to deliver for our customers and shareholders. Thank you for your interest in Bassett Furniture.
Speaker Change: We're optimistic that the investments we've made in our new product lines.
Speaker Change: Our emphasis on integrating pass it <unk>.
Speaker Change: Further into that.
Speaker Change: Does that community will provide competitive advantages.
Speaker Change: Through.
Speaker Change: For the future.
Speaker Change: We continue to manufacture almost 80% of our product here in the U S.
Speaker Change: Remained intensely focused on operating efficiencies and cost reductions to deliver for our customers and shareholders.
Speaker Change: Thank you for your interest in Bassett furniture.
Speaker Change: This concludes today's conference call. Thank you for your participation and you may now disconnect.
Operator: This concludes today's conference call. Thank you for your participation, and you may now disconnect.
Speaker Change: Okay.
Operator: Thanks for watching!
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.