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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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Equity Bottom-Up

Bassett Furniture Inds / Equity Bottom-Up

<ul><li>Herein, we analyze and discuss Bassett’s 2QFY24 earnings report.</li><li>Management reported its results for the interim period that ended on June 1, 2024, on Wednesday after market close.</li><li>It also conducted its “first-ever” management-sponsored and conducted earnings conference call on Thursday before market open, taking and answering analyst questions live.</li></ul>

Herein, we analyze and discuss Bassett’s 2QFY24 earnings report.Management reported its results for the interim period that ended on June 1, 2024, on Wednesday after market close.It also conducted its “first-ever” management-sponsored and conducted earnings conference call on Thursday before market open, taking and answering analyst questions live.

Bassett Furniture Industries, Inc. - 2QFY24 Results Were Ugly

<ul><li>Bassett’s 1QFY24 operating results disappointing, but not surprising.</li><li>In its 2023 Annual Report, Bassett CEO Rob Spilman’s opening line was, “The other side of the COVID sales boom has proven to a rough ride for the home furnishings sector.”</li><li>It remains challenging. Several untimely winter storms hit on important selling days, including the MLK holiday sale period. </li></ul>

Bassett’s 1QFY24 operating results disappointing, but not surprising.In its 2023 Annual Report, Bassett CEO Rob Spilman’s opening line was, “The other side of the COVID sales boom has proven to a rough ride for the home furnishings sector.”It remains challenging. Several untimely winter storms hit on important selling days, including the MLK holiday sale period. 

Bassett Furniture Industries, Inc. - 1QFY24 Disappointing but Not Surprising

<ul><li>We are initiating coverage of Bassett Furniture Industries, Inc., publicly traded under the ticker BSET.</li><li>Bassett primarily operates in two segments: Retail and Wholesale.</li><li>A third segment, Corporate &amp; Other, accounts for corporate and unallocated expenses, as well as the operating results of Noa Home, a recent e-commerce acquisition.</li></ul>

We are initiating coverage of Bassett Furniture Industries, Inc., publicly traded under the ticker BSET.Bassett primarily operates in two segments: Retail and Wholesale.A third segment, Corporate &amp; Other, accounts for corporate and unallocated expenses, as well as the operating results of Noa Home, a recent e-commerce acquisition.

Bassett Furniture Industries, Inc. - A Survivor Pursuing Success

Thematic (Sector/Industry)

<ul><li>Despite the spike in volatility earlier in the week, the markets were relatively calm by the end of the week, with mixed results for furniture/furnishings stocks.</li><li>The Water Tower Research Commercial/Contract Furniture Index (-0.9%), Residential Manufacturers &amp; Suppliers Index (+2.2%), and Home Goods Retailers Index (+1.3%) all lagged the two large-cap market indexes (+3.0%), which outperformed the small-cap R2K index (+2.1%).</li><li>ARHS noted weaker-than-anticipated demand at the high end. CFO Dawn Phillipson said on the 2QFY24 investor call, “We experienced softening demand comps starting in May, and the negative trend accelerated into July”, with comps now expected to be down somewhere in the negative low- to mid-teens in 2HFY24.</li></ul>

Despite the spike in volatility earlier in the week, the markets were relatively calm by the end of the week, with mixed results for furniture/furnishings stocks.The Water Tower Research Commercial/Contract Furniture Index (-0.9%), Residential Manufacturers &amp; Suppliers Index (+2.2%), and Home Goods Retailers Index (+1.3%) all lagged the two large-cap market indexes (+3.0%), which outperformed the small-cap R2K index (+2.1%).ARHS noted weaker-than-anticipated demand at the high end. CFO Dawn Phillipson said on the 2QFY24 investor call, “We experienced softening demand comps starting in May, and the negative trend accelerated into July”, with comps now expected to be down somewhere in the negative low- to mid-teens in 2HFY24.

Furniture/Furnishings Weekly - Aug 12, 2204

<ul><li>Furniture &amp; furnishings stocks retrenched broadly, in line with the broader ‘risk-off’ move that affected all major indexes.</li><li>The Water Tower Research Commercial/Contract Furniture Index declined (-3.1%), the Residential Manufacturers &amp; Suppliers Index fell (-1.6%), and the Home Goods Retailers Index declined (-7.2%).</li><li>The S&amp;P 500 and Dow 30 were both down (-2.1%), while the R2K declined (-5.8%). The Mass Retailers Index declined (-5.6%).</li></ul>

Furniture &amp; furnishings stocks retrenched broadly, in line with the broader ‘risk-off’ move that affected all major indexes.The Water Tower Research Commercial/Contract Furniture Index declined (-3.1%), the Residential Manufacturers &amp; Suppliers Index fell (-1.6%), and the Home Goods Retailers Index declined (-7.2%).The S&amp;P 500 and Dow 30 were both down (-2.1%), while the R2K declined (-5.8%). The Mass Retailers Index declined (-5.6%).

Furniture/Furnishings Weekly - Stocks Down as Market Retrenches

United States

Bassett Furniture Industries, Incorporated manufactures and sells a full line of furniture for the home.  The Company offers bedroom and dining suites, occasional tables and entertainment units, upholstered sofas and love seats, recliners, and mattresses, among other products.  Bassett's products are sold through retailers, including Bassett Furniture Direct.

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Bassett Furniture Inds (BSET US)

Bassett Furniture Industries, Inc. - 2QFY24 Results Were Ugly

Herein, we analyze and discuss Bassett’s 2QFY24 earnings report. Management reported its results for the interim period that ended on June 1, 2024,...

Water Tower Research

Bassett Furniture Industries, Inc. - 1QFY24 Disappointing but Not Surprising

In its 2023 Annual Report, Bassett CEO Rob Spilman’s opening line was, “The other side of the COVID sales boom has proven to a rough ride for the...

Water Tower Research

Bassett Furniture Industries, Inc. - A Survivor Pursuing Success

A third segment, Corporate & Other, accounts for corporate and unallocated expenses, as well as the operating results of Noa Home, a recent e...

Water Tower Research

Furniture/Furnishings Weekly - Aug 12, 2204

Despite the spike in volatility earlier in the week, the markets were relatively calm by the end of the week, with mixed results for furniture...

Water Tower Research

Furniture/Furnishings Weekly - Stocks Down as Market Retrenches

Furniture & furnishings stocks retrenched broadly, in line with the broader ‘risk-off’ move that affected all major indexes.

Water Tower Research

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