Bassett's fiscal Q3 sales rose 3.4% to $82.8M and EPS rose to $0.24 from $0.09, though about $1M of a one-off IEEPA tariff refund and lower bonus costs drove most of the profit gain while retail stayed loss-making.
Revenue
$83M
+3.4% YoY
Net income
$2.1M
+162.3% YoY
Diluted EPS
$0.24
+166.7% YoY
Operating margin
3.4%
This period vs a year ago
Same period last year
This period
Revenue▲+3.4%
≈$80M
$83M
Net income▲+162.3%
≈$801K
$2.1M
Diluted EPS▲+166.7%
≈$0.09
$0.24
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
A one-off tariff refund did most of the lifting in a slightly better quarter
Bassett Furniture's fiscal third quarter (the 13 weeks to August 29, 2026) brought net sales of $82.8 million, up 3.4% from a year earlier. Net income rose to $2.1 million, or $0.24 per diluted share, from $0.8 million ($0.09). Operating income, the profit from running the business before interest, investment income and tax, rose to $2.8 million from $0.6 million. About $1.0 million of that improvement is a refund of tariffs Bassett paid in 2025. U.S. Customs returned them after the Supreme Court struck down the tariffs imposed under the International Emergency Economic Powers Act (IEEPA) in February 2026. Underneath the refund, sales grew in both halves of the business. Lower corporate bonus costs helped too.
At a glance
$956,000 of tariff refund went into Q3 gross profit. That is about 44% of the $2.2 million rise in operating income. Without it, our rough estimate is EPS of about $0.16 rather than $0.24 (still up from $0.09).
Retail written orders up 4.4%. Written sales are the value of orders customers placed in Bassett's own stores, delivered later. It is the best demand signal in the filing, and it roughly matched the 4.5% rise in delivered retail sales.
Operating margin was 3.4%, against 0.7% a year ago. Operating margin is the share of revenue left after running the business, before interest and tax. Even at 3.4%, a furniture maker with a 57% gross margin keeps very little of each sales dollar, because store, delivery and corporate costs absorb nearly all of it.
Key metrics
Metric
Q3 FY2026
Q3 FY2025
YoY change
Net sales
$82.8M
$80.1M
+3.4%
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Gross margin
57.5%
56.2%
+130 bp
SG&A expenses (% of sales)
53.9%
55.4%
-150 bp
Operating income
$2.8M
$0.6M
+369%
Operating margin
3.4%
0.7%
+2.7 pts
Net income
$2.1M
$0.8M
+162.3%
Diluted EPS
$0.24
$0.09
+166.7%
Retail written sales (orders)
—
—
+4.4%
Wholesale backlog (period-end)
$16.9M
$16.6M
+1.9%
Fiscal Q3 runs May 31 to August 29, 2026. Bassett's fiscal year ends in late November. "bp" means basis points, or hundredths of a percentage point. SG&A means selling, general and administrative costs.
Year to date (nine months), sales were flat at $246.9 million (+0.1%). Net income was $5.3 million against $4.6 million, and diluted EPS was $0.61 against $0.53.
Takeaway: Take out the one-time tariff refund and lower bonus accruals, and Bassett's quarter still improved, though only modestly. Stores are taking more orders (+4.4%) but discounting more to win them: retail gross margin fell 90 bp, and the retail segment still lost money. Bassett has not yet shown it can turn retail sales growth into retail profit.
Segment performance
Bassett runs two businesses. Wholesale makes and imports furniture. It sells to Bassett's own stores, to licensee-owned Bassett stores and to more than 1,000 independent retailers. Retail is Bassett's company-owned Bassett Home Furnishings stores. Segment figures below include sales from wholesale to Bassett's own stores. Those sales are removed in the consolidated totals, so the two segments add up to more than group sales.
Segment (Q3)
Net sales
YoY
Gross margin
Operating income (loss)
Prior year
Wholesale
$53.7M
+5.7%
36.6% (35.1%)
$9.3M (17.4% margin)
$8.1M (15.9%)
Retail
$54.2M
+4.5%
51.5% (52.4%)
-$0.3M
-$0.3M
Corporate & other costs
—
—
—
-$6.6M
-$7.4M
Wholesale. Total shipments rose 5.7%. Shipments to the Bassett store network rose 7.5% and shipments to independent "open market" retailers rose 3.7%. The Lane Venture outdoor brand grew fastest. Its shipments to wholesale customers rose 28%, and including the Bassett stores, which began carrying the brand in Q1, total Lane Venture shipments rose 44%. Sales to outside customers alone (excluding Bassett's own stores) rose only 1.4%, to $28.6 million. Segment gross margin rose 150 bp. Management attributes this to the tariff refund and better margins in domestic wood and Lane Venture, "partially offset by lower margins in the imported wood and imported upholstery operations due to the realization of higher tariff costs." By product, custom upholstery (65.6% of wholesale sales) rose 7.1%, leather imports rose 7.4%, custom wood rose 3.9% and casegoods (wooden bedroom and dining furniture) were flat. Higher fuel costs raised outbound freight, which offset the benefit of spreading fixed costs over more sales, so wholesale SG&A stayed flat at 19.3% of sales.
Retail. Delivered sales rose 4.5% and written orders rose 4.4%. The filing does not report same-store sales, the sales change at stores open in both periods. The reported growth includes the Cincinnati store opened late in Q2 and the Cherry Hill, NJ store bought from a former licensee in Q2, so stores open a full year grew by less than 4.5%. Retail gross margin fell 90 bp "primarily due to lower margins on in-line goods from increased promotional activities." SG&A fell 130 bp as a share of sales, thanks to higher volume and lower advertising spend, partly offset by higher employee costs. The segment's operating loss narrowed only to $253,000 from $333,000, and that includes $144,000 of pre-opening costs for the Orlando store. Year to date, retail has lost $1.6 million, against a $0.1 million profit a year ago. The swing includes $712,000 of new-store pre-opening costs and a 120 bp fall in gross margin, which management attributes to promotions and more aggressive clearance of returned goods and floor samples.
Web. Online orders are a small part of sales but growing quickly. Web written sales rose 39% in the first nine months, and delivered web sales rose 34%.
What the headline numbers hide
Part of the profit gain will not repeat. Of the $2.83 million IEEPA tariff refund received in Q2, $956,000 was booked as gross profit in Q3. Most of the balance is due in Q4, as the inventory those tariffs were charged on is sold. The refund is not pure upside. Tariffs paid in 2025 were added to the cost of inventory, and management says those "high tariff costs" in goods sold through Q3 were "substantially offset" by the refund. Imported products are still carrying higher tariff costs, which is why imported wood and upholstery margins fell. Once the refund has all been booked, those costs stay.
Lower bonus accruals helped. Corporate SG&A fell $799,000 (10.8%), "due primarily to lower incentive compensation costs." Together with the $956,000 refund, that is about $1.75 million of the $2.19 million rise in operating income. Higher operating profit in the two businesses accounts for little of the gain.
Non-operating items worked the other way. Other income swung to a $375,000 loss from a $30,000 gain, mainly because the cash surrender value of company-owned life insurance rose in the prior-year quarter. The tax rate was 27.2% against 26.8%, so tax did not help EPS. The diluted share count fell only 0.4%, to 8.64 million, so buybacks added almost nothing to EPS growth.
Cash flow is fine, with a refund in it too. Operating cash flow for nine months was $8.0 million against net income of $5.3 million, up from $5.7 million a year ago. Management attributes the increase to higher income, the tariff refund receipt and better working capital. Inventory fell $2.6 million in the nine months after rising $6.5 million in the same stretch last year. Capital spending more than doubled to $6.9 million (new stores and a High Point showroom), and dividends took $5.2 million, roughly all of year-to-date net income. Cash and short-term CDs fell $5.9 million in the nine months, to $53.4 million. Bassett has no borrowings under its $25 million credit line; only $5.9 million of standby letters of credit is drawn against it.
Receivables are growing faster than outside wholesale sales. Wholesale receivables were $14.3 million, up 8.7% from $13.1 million a year earlier, while outside wholesale sales rose 1.4% in the quarter. The amount is small but worth watching.
Outlook
Bassett gives no sales or earnings guidance. Management expects full-year capital spending of $9-11 million. That implies $2-4 million in Q4, as the Orlando store opens in early October 2026. Expect a further start-up loss there: management puts total start-up losses, including pre-opening costs, at $400,000-$600,000 per store. Management describes demand as "somewhat stabilized" at post-COVID levels, with housing turnover, the main driver of furniture purchases, still well below normal. The filing also flags higher fuel and material costs linked to the conflict with Iran as a risk.
Our view: Q4 should again get help from the rest of the tariff refund, so reported margins will likely look better than the business underneath. The test for fiscal 2027 is whether retail written sales keep growing without more discounting, and whether Lane Venture and the newer stores can lift outside wholesale sales beyond low single digits. The balance sheet is solid: $53 million of cash and CDs and no bank debt. Earnings, though, barely cover the $0.20 quarterly dividend, so the cash pile is not growing.
Source: Bassett Furniture Industries Form 10-Q for the quarter ended August 29, 2026. "EPS excluding the refund" is our own estimate: $956,000 taxed at the quarter's 27.2% effective rate, divided by 8.64 million diluted shares. It is not a company-reported figure.