Late last week, Bassett Furniture (NASDAQ:BSET) reported fiscal second-quarter results. Sales rose 4.5% to $80.4 million vs. the prior year. The increase was attributed to growth in the company's ongoing distribution channels, which benefited from increased shipments to Bassett Furniture Direct (yep, BFD) stores and greater demand for juvenile products.
The company continues to focus on and benefit from the operation of its BFD stores. The strategy of selling affordable furniture that is ready for delivery within 30 days continues to generate the most significant growth for Bassett. Sales to the BFD stores accounted for 57% of total wholesale shipments for the first half of 2004, up from 52% for the first six months of 2003. Bassett currently operates 104 BFD stores and plans to end the fiscal year with 118 in operation.
The company is also benefiting from its cost-cutting maneuvers, which, unfortunately, consisted of hundreds of layoffs. It reported second-quarter earnings of $1.9 million, or $0.16 per share, an increase of 60% from last year. For the first six months, earnings increased nearly 80%.
Bassett should also receive some benefits in the future from the recent preliminary ruling that imposes antidumping duties on imports of Chinese wood bedroom furniture. The company expects the ruling to deter further price deflation in the furniture industry. This has been something Bassett and some of its competitors, including La-Z-Boy (NYSE:LZB), Stanley Furniture (NASDAQ:STLY), and occasionallyHooker Furniture (NASDAQ:HOFT) have been fighting for.
With the struggles of 2003 apparently in the past, the Virginia-based furniture manufacturer appears to be back in fashion. Investors should not be deterred by its somewhat high price (it trades at 27.2 times forward earnings). Bassett boasts a fat 4.32% dividend yield that sweetens the deal considerably.
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Fool contributor Mike Cianciolo waited 16 weeks for his Broyhill furniture. He doesn't own stock in any companies mentioned in this article.
