BASSETT FURNITURE INDUSTRIES INC (BSET)

CIK: 0000010329. SIC: 2511 Wood Household Furniture, (No Upholstered). Latest 10-K as of: 2026-02-05.

SIC breadcrumb: Manufacturing > SIC Major Group 25 > SIC 2511 Wood Household Furniture, (No Upholstered)

SEC company page: https://www.sec.gov/edgar/browse/?CIK=10329. Latest filing source: 0001437749-26-003189.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000010329.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-01. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000010329.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001437749-26-010901.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-04-01. Report date: 2026-02-28.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Safe-harbor, forward-looking statements:

This report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and business of Bassett Furniture Industries, Incorporated and subsidiaries. Such forward-looking statements are identified by use of forward-looking words such as “anticipates”, “believes”, “plans”, “estimates”, “expects”, “aims” and “intends” or words or phrases of similar expression. These forward-looking statements involve certain risks and uncertainties. No assurance can be given that any such matters will be realized. Important factors that could cause actual results to differ materially from those contemplated by such forward-looking statements include:

•

fluctuations in the cost and availability of raw materials, fuel, labor, delivery costs and sourced products, including those which may result from supply chain disruptions and shortages and the imposition of new or increased tariffs, retaliatory tariffs, duties and trade limitations with respect to foreign-sourced products

•

competitive conditions in the home furnishings industry

•

overall retail traffic levels in stores and on the web and consumer demand for home furnishings

•

ability of our customers and consumers to obtain affordable credit due to increased interest rates

•

the profitability of the stores (independent licensees and Company-owned retail stores) which may result in future store closings

•

the risk of additional asset impairment charges arising from the ongoing efforts to consolidate our retail warehouses.

•

ability to implement our Company-owned retail strategies and realize the benefits from such strategies

•

effectiveness and security of our information technology systems and possible disruptions due to cybersecurity threats, including any impacts from a network security incident; and the sufficiency of our insurance coverage, including cybersecurity insurance

•

future tax legislation, or regulatory or judicial positions

•

ability to efficiently manage the import supply chain to minimize business interruption

•

concentration of domestic manufacturing, particularly of upholstery products, and the resulting exposure to business interruption from accidents, weather and other events and circumstances beyond our control

Additionally, other risks that could cause actual results to differ materially from those contemplated by such forward-looking statements are set forth in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended November 29, 2025.

You should keep in mind that any forward-looking statement made by us in this report or elsewhere speaks only as of the date on which such forward-looking statement is made. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. We have no duty to, and do not intend to, update or revise the forward-looking statements in this discussion after the date hereof, except as may be required by law. In light of these risks and uncertainties, you should keep in mind that the events described in any forward-looking statement made in this report or elsewhere might not occur.

19 of 31

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

Overview

Bassett is a leading retailer, manufacturer and marketer of branded home furnishings. We were founded in 1902 and incorporated under the laws of Virginia in 1930. Our rich 124-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.

Approximately 60% of our wholesale sales arise from our network of 86 Company-owned and licensee-owned Bassett Home Furnishings (“BHF”) stores. Our store program is designed to provide a single source home furnishings retail store with a unique combination of stylish, quality furniture and accessories with a high level of customer service. The stores highlight our custom furniture design and manufacturing capabilities, free in-home or virtual design visits (“home makeovers”) and coordinated decorating accessories. Our philosophy is based on building strong long-term relationships with each customer. Salespeople are referred to as “Design Consultants” and are trained to evaluate customer needs and provide comprehensive solutions for their home decor. Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home or virtual design services for our customers.

Bassett also has a significant traditional wholesale business with more than 1,000 open market accounts. Most of the open market sales are through Bassett Design Centers and Bassett Custom Studios which function as a store within a multi-line store featuring the Company’s custom furniture capabilities. The wholesale business, including the Lane Venture outdoor brand, also services general furniture stores and a growing number of interior design firms through a network of over 30 independent sales representatives who have stated geographical territories. These sales representatives are compensated based on a standard commission rate. The Lane Venture outdoor brand was recently introduced in the Bassett Home Furnishings stores representing a new outlet for that brand.

We consider our website to be the front door to our brand experience where customers can research our furniture and accessory offerings and subsequently buy online or engage with an in-store design consultant. We know that we are driving a significant percentage of the retail foot traffic to our store network and our open market customers through engagement with www.bassettfurniture.com. Digital outreach strategies have been the primary vehicle for brand advertising and customer acquisition. We began supplementing the digital outreach strategy with added direct mail and television late in 2024 and expect to continue with a balanced blend of both digital and traditional direct mail and television in 2026.

We introduced a new web platform late in 2023 that leverages world class features including enhanced customer research capabilities and streamlined navigation. Since the debut of the new site, we have seen increased engagement with the brand through a greater number of page views per customer along with more time spent on the site. We have also seen an increase in average order value that has resulted in increased e-commerce revenue. Building on the 25% increase in web sales for fiscal 2025, written sales orders for the web increased 28% for the quarter while delivered sales increased 46%. Although e-commerce sales continue to be small relative to in-store sales, we will continue to invest in ongoing improvements to the aesthetics and user experience on our website while not compromising on our in-store experience or the quality of our in-home makeover capabilities.

We have factories in Newton, North Carolina that manufacture both stationary and motion upholstered furniture for inside the home along with our outdoor furniture offerings. We have a factory in Martinsville, Virginia that assembles and finishes our custom bedroom and dining offerings. We also have a facility in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.

In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam. Over 75% of our wholesale revenues are derived from products that are manufactured in the United States using a mix of domestic and globally sourced components and raw materials.

20 of 31

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

Results of Operations – Period ended February 28, 2026 compared with the period ended March 1, 2025:

Consolidated results of operations for the three months ended February 28, 2026 and March 1, 2025 are as follows:

Quarter Ended

Change

February 28, 2026

March 1, 2025

Dollars

Percent

Net sales of furniture and accessories

$

80,340

100.0

%

$

82,162

100.0

%

$

(1,822

)

-2.2

%

Cost of furniture and accessories sold

35,175

43.8

%

35,332

43.0

%

(157

)

-0.4

%

Gross profit

45,165

56.2

%

46,830

57.0

%

(1,665

)

-3.6

%

SG&A expenses

43,913

54.7

%

44,375

54.0

%

(462

)

-1.0

%

New store pre-opening costs

95

0.1

%

-

0.0

%

95

100.0

%

Income from operations

$

1,157

1.4

%

$

2,455

3.0

%

$

(1,298

)

-52.9

%

Analysis of Quarterly Results:

Total sales revenue for the three months ended February 28, 2026 decreased $1,822 or 2.2% from the prior year period primarily due to the impact of widespread winter weather disruptions in late January on store operations and retail and wholesale logistics. This consisted of a $749 or 1.4% decrease in retail sales from our Company-owned stores and a $1,073 or 3.7% decrease in sales to external wholesale customers.

Gross margins for the three months ended February 28, 2026 decreased 80 basis points from the prior year period primarily due to lower margins in both the wholesale and retail business.

Selling, general and administrative (“SG&A”) expenses (excluding new store pre-opening costs) as a percentage of sales for the three months ended February 28, 2026 increased 70 basis points from 2025 reflecting reduced leverage of fixed costs due to lower sales levels.

Refer to the following discussions of quarterly results by segment for additional details.

21 of 31

PART I-FINANCIAL INFORMATION-CONTINUED

BASSETT FURNITURE INDUSTRIES, INCORPORATED AND SUBSIDIARIES

FEBRUARY 28, 2026

(Dollars in thousands except share and per share data)

Segment Information

We have strategically aligned our business into two reportable segments as defined in ASC 280, Segment Reporting, and as described below:

●

Wholesale. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations, which includes Lane Venture.

●

Retail – Company-owned stores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers.

In addition to the two reportable segments described above, we include our remaining business activities and assets in a reconciling category known as Corporate and other. This category includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefitting both wholesale and retail operations. In addition to property and equipment and various other assets associated with the shared corporate functions, the identifiable assets of Corporate and other include substantially all of our cash and our investments in CDs. We consider our corporate functions to be other business activities and have aggregated them with any of our operating segments that do not meet the requirements to be reportable segments. As of and for the thr

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-05. Report date: 2025-11-29.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Amounts in thousands except share and per share data)

Overview

Bassett is a leading retailer, manufacturer and marketer of branded home furnishings. We were founded in 1902 and incorporated under the laws of Virginia in 1930. Our rich 123-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.

Approximately 60% of our wholesale sales arise from our network of 86 Company-owned and licensee-owned Bassett Home Furnishings (“BHF”) stores. Our store program is designed to provide a single source home furnishings retail store with a unique combination of stylish, quality furniture and accessories with a high level of customer service. The stores highlight our custom furniture design and manufacturing capabilities, free in-home or virtual design visits (“home makeovers”) and coordinated decorating accessories.  Our philosophy is based on building strong long-term relationships with each customer.  Salespeople are referred to as “Design Consultants” and are trained to evaluate customer needs and provide comprehensive solutions for their home decor.  Until a rigorous training and design certification program is completed, Design Consultants are not authorized to perform in-home or virtual design services for our customers.

Bassett also has a significant traditional wholesale business with more than 1,000 open market accounts. Most of the open market sales are through Bassett Design Centers and Bassett Custom Studios which function as a store within a multi-line store featuring the Company’s custom furniture capabilities. The wholesale business, including the Lane Venture outdoor brand, also services general furniture stores and a growing number of interior design firms through a network of over 30 independent sales representatives who have stated geographical territories. These sales representatives are compensated based on a standard commission rate.

We consider our website to be the front door to our brand experience where customers can research our furniture and accessory offerings and subsequently buy online or engage with an in-store design consultant. We know that we are driving a significant percentage of the retail foot traffic to our store network and our open market customers through engagement with www.bassettfurniture.com. Digital outreach strategies have been the primary vehicle for brand advertising and customer acquisition. We began supplementing the digital outreach strategy with added direct mail and television late in 2024 and expect to continue with a balanced blend of both digital and traditional direct mail and television in 2026.

We introduced a new web platform late in 2023 that leverages world class features including enhanced customer research capabilities and streamlined navigation. Since the debut of the new site, we have seen increased engagement with the brand through a greater number of page views per customer along with more time spent on the site. We have also seen an increase in average order value that has resulted in increased e-commerce revenue. While traffic to the website decreased 8% during 2025, sales conversion rates increased 28% resulting in a 25% increase in total web sales. Although e-commerce sales continue to be small relative to in-store sales, we will continue to invest in ongoing improvements to the aesthetics and user experience on our website while not compromising on our in-store experience or the quality of our in-home makeover capabilities.

During the fourth quarter of fiscal 2022 we acquired Noa Home Inc. (“Noa Home”). A mid-priced e-commerce furniture retailer headquartered in Montreal, Canada, Noa Home had operations in Canada, Australia, Singapore and the United Kingdom. After nearly two years of operating losses, we concluded during the second quarter of 2024 that Noa Home was not likely to achieve profitability at any time in the foreseeable future and decided to cease operations by selling the inventory in an orderly fashion. As of the end of 2024, we had substantially completed the liquidation of Noa Home’s assets and liabilities. In the second quarter of 2024 we recognized non-cash charges totaling $2,401 related to the impairment of certain long-lived assets of Noa Home and the establishment of a reserve against Noa Home’s remaining inventory at that time. Upon substantially completing the liquidation of Noa Home at the end of the fourth quarter of 2024, we recognized a charge of $962 associated with the transfer of the cumulative translation losses out of accumulated other comprehensive income.

We have factories in Newton, North Carolina that manufacture both stationary and motion upholstered furniture for inside the home along with our outdoor furniture offerings. We have a factory in Martinsville, Virginia that assembles and finishes our custom bedroom and dining offerings. We also have a facility in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.

In addition to the furniture that we manufacture domestically, we source most of our formal bedroom and dining room furniture (casegoods) and certain leather upholstery offerings from several foreign plants, primarily in Vietnam. Over 75% of our wholesale revenues are derived from products that are manufactured in the United States using a mix of domestic and globally sourced components and raw materials.

14

Analysis of Continuing Operations

The following discussion provides an analysis of our results of operations and reasons for material changes therein for fiscal year 2025 as compared to fiscal year 2024. For additional analysis of the fiscal year 2024 results as compared to fiscal year 2023, see “Analysis of Continuing Operations” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s 2024 Annual Report on Form 10-K, filed with the SEC on February 10, 2025.

Net sales revenue, cost of furniture and accessories sold, selling, general and administrative (“SG&A”) expense, other charges, and income from operations were as follows for the years ended November 29, 2025, November 30, 2024 and November 25, 2023:

Comparative Change

2025 vs 2024

2024 vs 2023

2025

2024*

2023

Dollars

Percent

Dollars

Percent

Net sales

$

335,280

100.0

%

$

329,923

100.0

%

$

390,136

100.0

%

$

5,357

1.6

%

$

(60,213

)

-15.4

%

Cost of goods sold

146,598

43.7

%

150,508

45.6

%

183,648

47.1

%

(3,910

)

-2.6

%

(33,140

)

-18.0

%

Gross profit

188,682

56.3

%

179,415

54.4

%

206,488

52.9

%

9,267

5.2

%

(27,073

)

-13.1

%

SG&A

180,357

53.8

%

187,527

56.8

%

205,227

52.6

%

(7,170

)

-3.8

%

(17,700

)

-8.6

%

Asset impairment charges

498

0.1

%

5,515

1.7

%

-

0.0

%

(5,017

)

-91.0

%

5,515

NM

Loss on contract abandonment

-

0.0

%

1,240

0.4

%

-

0.0

%

(1,240

)

-100.0

%

1,240

NM

Loss upon realization of cumulative translation adjustment

-

0.0

%

962

0.3

%

-

0.0

%

(962

)

-100.0

%

962

NM

Restructuring charges

-

0.0

%

440

0.1

%

-

0.0

%

(440

)

-100.0

%

440

NM

Goodwill impairment charge

-

0.0

%

-

0.0

%

5,409

1.4

%

-

NM

(5,409

)

-100.0

%

Gain on revaluation of contingent consideration

-

0.0

%

-

0.0

%

1,013

0.3

%

-

NM

(1,013

)

-100.0

%

Income (loss) from continuing operations

$

7,827

2.5

%

$

(16,269

)

-4.9

%

$

(3,135

)

-0.8

%

$

24,096

NM

$

(13,134

)

418.9

%

*53 weeks for fiscal 2024 as compared with 52 weeks for fiscal 2023 and 2022.

Our consolidated net sales by segment were as follows:

Comparative Change

2024 vs 2023

2023 vs 2022

2025

2024*

2023

Dollars

Percent

Dollars

Percent

Sales Revenue

Wholesale sales of furniture and accessories

$

214,614

$

207,462

$

248,911

$

7,152

3.4

%

$

(41,449

)

-16.7

%

Less: Sales to retail segment

(96,015

)

(87,021

)

(103,519

)

(8,994

)

10.3

%

16,498

-15.9

%

Wholesale sales to external customers

118,599

120,441

145,392

(1,842

)

-1.5

%

(24,951

)

-17.2

%

Retail sales of furniture and accessories

216,681

204,563

235,940

12,118

5.9

%

(31,377

)

-13.3

%

Corporate & Other - Noa Home

-

4,919

8,804

(4,919

)

-100.0

%

(3,885

)

-44.1

%

Consolidated net sales of furniture and accessories

$

335,280

$

329,923

$

390,136

$

5,357

1.6

%

$

(60,213

)

-15.4

%

*53 weeks for fiscal 2024 as compared with 52 weeks for fiscal 2025 and 2023.

Total sales revenue for the year ended November 29, 2025, increased $5,357 or approximately 1.6% from the prior year period primarily due to increases in delivered retail sales partially offset by decreases in wholesale shipments to the open market and lost sales from the closure of Noa Home at the end of fiscal 2024. Excluding the lost sales from Noa Home, total sales revenue increased 3.1%.

Gross margins for the year ended November 29, 2025 increased 190 basis points from 2024. Gross margins in the prior year were adversely impacted by increased inventory valuation charges of $1,729 in the wholesale segment, $472 in the retail segment and $500 in the Noa Home operation, as well as $609 of unproductive labor costs incurred during a temporary shutdown resulting from a cybersecurity incident. Excluding the above-mentioned additional inventory valuation charges and unproductive labor costs in 2024, gross margins would have increased 90 basis points primarily due to improved margins in the wholesale segment, partially offset by lower margins in the retail operations.

15

SG&A expenses as a percentage of sales for the year ended November 29, 2025 decreased 300 basis points reflecting benefits from the prior year restructuring plan and on-going cost containment activities coupled with greater leverage of fixed costs from higher sales levels.

During fiscal 2025, we recognized an asset impairment charge of $498 related to an underperforming retail store expected to be closed in late fiscal 2026.

During fiscal 2024, we recognized charges of $5,515 for asset impairments, $1,240 resulting from a contract abandonment, $962 from the realization of cumulative translation losses on Noa Home, and a restructuring charge for severance of $440. See Note 14 to our consolidated financial statements for additional information regarding these charges.

Certain other items affecting comparability between fiscal 2025 and 2024 are discussed below in “Other Items Affecting Net Income (Loss)”.

Segment Information

We have strategically aligned our business into two reportable segments as defined in ASC 280, Segment Reporting, and as described below:

●

Wholesale. The wholesale home furnishings segment is involved principally in the design, manufacture, sourcing, sale and distribution of furniture products to a network of Bassett stores (Company-owned and licensee-owned retail stores) and independent furniture retailers. Our wholesale segment includes our wood and upholstery operations, which includes Lane Venture.

●

Retail – Company-owned stores. Our retail segment consists of Company-owned stores and includes the revenues, expenses, assets and liabilities and capital expenditures directly related to these stores and the Company-owned distribution network utilized to deliver products to our retail customers.

In addition to the two reportable segments described above, we include our remaining business activities and assets in a reconciling category known as Corporate and other. This category includes the shared costs of corporate functions such as treasury and finance, information technology, accounting, human resources, legal and others, including certain product development and marketing functions benefitting both wholesale and retail operations. In addition to property and equipment and various other assets associated with the shared corporate functions, the identifiable assets of Corporate and other include substantially all of our cash and our investments in CDs. We consider our corporate functions to be other business activities and have aggregated them with any of our operating segments that do not meet the requirements to be reportable segments. As of and for the periods ended November 29, 2025, November 30, 2024 and November 25, 2023, the only such operating segment included in Corporate and other is Noa Home, which was acquired on September 2, 2022. All sales reported in our Corporate and other category are attributable to Noa Home, which generated substantially all of its sales outside of the United States. During the second fiscal quarter of 2024 we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and ceased operations as of the end of 2024 by selling the remaining inventory in an orderly fashion over the second half of fiscal 2024.

Inter-company net sales elimination represents the elimination of wholesale sales to our Company-owned stores. Inter-company income elimination includes the embedded wholesale profit in the Company-owned store inventory that has not been realized. These profits will be recorded when merchandise is delivered to the retail consumer. The inter-company income elimination also includes rent paid by our retail stores occupying Company-owned real estate.

16

Reconciliation of Segment Results to Consolidated Results of Operations

To supplement the segment financial measures prepared in accordance with GAAP, we also present gross profit by segment inclusive of the effects of intercompany sales by our wholesale segment to our retail segment. Because these intercompany transactions are not eliminated from our segment presentations and because we do not present gross profit as a measure of segment profitability in the accompanying condensed consolidated financial statements, the presentation of gross profit by segment is considered to be a non-GAAP financial measure. In addition, certain special gains or charges that are included in consolidated income (loss) before income taxes are not included in the measures of segment profitability. The reconciliation of this non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP is presented below along with the effects of various other intercompany eliminations on our consolidated results of operations.

Year Ended November 29, 2025

GAAP

Non-GAAP Presentation

Presentation

Corporate &

Special

Non-

Wholesale

Retail

Other

Eliminations

Items

Operating

Consolidated

Net sales

$

214,614

$

216,681

$

-

$

(96,015

)(1)

$

-

$

-

$

335,280

Cost of goods sold

138,883

103,205

-

(95,490

)(2)

-

-

146,598

Gross profit

75,731

113,476

-

(525

)(3)

-

-

188,682

SG&A expense

40,870

113,069

27,652

(1,234

)(4)

-

-

180,357

Asset impairment charges

-

-

-

-

498

(5)

-

498

Income (loss) from operations

34,861

407

(27,652

)

709

498

-

7,827

Interest income

-

-

-

-

-

1,979

1,979

Interest expense

-

-

-

-

-

(52

)

(52

)

Other loss, net

-

-

-

-

-

(994

)

(994

)

Income (loss) before income taxes

$

34,861

$

407

$

(27,652

)

$

709

$

498

$

933

$

8,760

Year Ended November 30, 2024

GAAP

Non-GAAP Presentation

Presentation

Corporate &

Special

Non-

Wholesale

Retail

Other

Eliminations

Items

Operating

Consolidated

Net sales

$

207,462

$

204,563

$

4,919

$

(87,021

)(1)

$

-

$

-

$

329,923

Cost of goods sold

139,393

95,728

2,803

(87,416

)(2)

-

-

150,508

Gross profit

68,069

108,835

2,116

395

(3)

-

-

179,415

SG&A expense

42,712

115,439

30,572

(1,196

)(4)

-

-

187,527

Asset impairment charges

-

-

-

-

5,515

(6)

-

5,515

Loss on contract abandonment

-

-

-

-

1,240

(7)

-

1,240

Loss upon realization of cumulative translation adjustment

-

-

-

-

962

(8)

-

962

Restructuring charges

-

-

-

-

440

(9)

-

440

Income (loss) from operations

25,357

(6,604

)

(28,456

)

1,591

8,157

-

(16,269

)

Interest income

-

-

-

-

-

2,673

2,673

Interest expense

-

-

-

-

-

(30

)

(30

)

Other loss, net

-

-

-

-

-

(744

)

(744

)

Income (loss) before income taxes

$

25,357

$

(6,604

)

$

(28,456

)

$

1,591

$

8,157

$

1,899

$

(14,370

)

17

Year Ended November 25, 2023

GAAP

Non-GAAP Presentation

Presentation

Corporate &

Special

Non-

Wholesale

Retail

Other

Eliminations

Items

Operating

Consolidated

Net sales

$

248,911

$

235,940

$

8,804

$

(103,519

)(1)

$

-

$

-

$

390,136

Cost of goods sold

171,394

111,769

4,002

(103,517

)(2)

-

-

183,648

Gross profit

77,517

124,171

4,802

(2

)(3)

-

-

206,488

SG&A expense

46,818

124,707

34,728

(1,026

)(4)

-

-

205,227

Goodwill impairment charge

5,409

(10)

5,409

Gain on revaluation of contingent consideration

-

-

-

-

1,013

(11)

-

1,013

Income (loss) from operations

30,699

(536

)

(29,926

)

1,024

4,396

(3,135

)

Interest income

-

-

-

-

-

2,528

2,528

Interest expense

-

-

-

-

-

(22

)

(22

)

Other loss, net

-

-

-

-

-

(1,859

)

(1,859

)

Income (loss) before income taxes

$

30,699

$

(536

)

$

(29,926

)

$

1,024

$

4,396

$

647

$

(2,488

)

Notes to Segment Consolidation Table:

(1)

Represents the elimination of sales from our wholesale segment to our Company-owned BHF stores.

(2)

Represents the elimination of purchases by our Company-owned BHF stores from our wholesale segment.

(3)

Represents the change in the elimination of intercompany profit in inventory.

(4)

Represents the elimination of rent paid by our retail stores occupying Company-owned real estate.

(5)

Represents an asset impairment charge of $498 in our retail segment.

(6)

Represents asset impairment charges of $2,887 and $727 in our retail and wholesale segments, respectively, a $1,827 charge for the impairment of the Noa Home trade name intangible asset, and a $74 charge for the impairment of Noa Home customized software.

(7)

Represents the charge for accruing the remaining minimum payments under a contract for logistical services in Riverside, CA which is no longer utilized.

(8)

Represents a charge for the realization of Noa Home's cumulative translation losses previously recorded in accumulated other comprehensive income due to the closure and substantially complete liquidation of that business.

(9)

Represents a charge for the accrual of severance pay due to restructuring.

(10)

Represents the charge for the full impairment of the goodwill associated with Noa Home.

(11)

Represents the gain resulting from the write-down of the contingent consideration payable on the acquisition of Noa Home.

Wholesale Segment

Net sales, gross profit, SG&A expense and operating income for our Wholesale Segment were as follows for the fiscal years ended November 29, 2025, November 30, 2024 and November 25, 2023:

Comparative Change

2025 vs 2024

2024 vs 2023

2025

2024*

2023

Dollars

Percent

Dollars

Percent

Net sales

$

214,614

100.0

%

$

207,462

100.0

%

$

248,911

100.0

%

$

7,152

3.4

%

$

(41,449

)

-16.7

%

Gross profit (1)

75,731

35.3

%

68,069

32.8

%

77,517

31.1

%

7,662

11.3

%

(9,448

)

-12.2

%

SG&A

40,870

19.0

%

42,712

20.6

%

46,818

18.8

%

(1,842

)

-4.3

%

(4,106

)

-8.8

%

Income from operations

$

34,861

16.2

%

$

25,357

12.2

%

$

30,699

12.3

%

$

9,504

37.5

%

$

(5,342

)

-17.4

%

(1)

Gross profit at the segment level is considered a Non-GAAP financial measure due to the included effects of intercompany transactions. Refer to the reconciliation of segment results to consolidated results of operations presented above.

*53 weeks for fiscal 2024 as compared with 52 weeks for fiscal 2025 and 2023.

18

Wholesale shipments by category for the fiscal years ended November 29, 2025, November 30, 2024 and November 25, 2023 are summarized below:

2025

2024*

2023

External

Intercompany

Total

External

Intercompany

Total

External

Intercompany

Total

Bassett Custom Upholstery

$

76,923

$

59,391

$

136,314

63.5

%

$

79,281

$

55,168

$

134,449

64.8

%

$

89,005

$

66,363

$

155,368

62.4

%

Bassett Leather

16,484

3,252

19,736

9.2

%

15,705

1,920

17,625

8.5

%

26,701

1,171

27,872

11.2

%

Bassett Custom Wood

12,357

16,297

28,654

13.4

%

13,735

15,932

29,667

14.3

%

17,357

20,070

37,427

15.0

%

Bassett Casegoods

12,835

17,075

29,910

13.9

%

11,720

14,001

25,721

12.4

%

12,329

15,915

28,244

11.3

%

Total

$

118,599

$

96,015

$

214,614

100.0

%

$

120,441

$

87,021

$

207,462

100.0

%

$

145,392

$

103,519

$

248,911

100.0

%

*53 weeks for fiscal 2024 as compared with 52 weeks for fiscal 2025 and 2023.

Fiscal 2025 as Compared to Fiscal 2024

Net sales for the year ended November 29, 2025 increased $7,152 or 3.4% from fiscal 2024 due primarily to a 8.2% increase in shipments to our retail store network partially offset by a 2% decrease in shipments to the open market and a 9% decrease in Lane Venture shipments. Gross margins for the year ended November 29, 2025 increased 250 basis points over fiscal 2024 year. Excluding $1,729 of increased inventory valuation charges in 2024 and $609 of unproductive labor costs incurred during a temporary shutdown resulting from a cybersecurity incident in 2024, gross margins would have increased by 140 basis points due primarily to improved pricing strategies in both the upholstery and wood operations coupled with greater leverage of fixed costs from higher sales levels. SG&A expenses as a percentage of sales decreased 160 basis points primarily due to to the benefit of cost reductions implemented during the second half of fiscal 2024 coupled with greater leverage of fixed costs from higher sales levels and lower bad debt costs.

The dollar value of our wholesale backlog, representing orders received but not yet shipped to the BHF store network or independent dealers, was $19,519 at November 29, 2025 and $21,750 at November 30, 2024.

Retail Segment – Company Owned Stores

Net sales, gross profit, SG&A expense, and operating income (loss) for our retail segment were as follows for the fiscal years ended November 29, 2025, November 30, 2024 and November 25, 2023:

Comparative Change

2025 vs 2024

2024 vs 2023

2025

2024*

2023

Dollars

Percent

Dollars

Percent

Net sales

$

216,681

100.0

%

$

204,563

100.0

%

$

235,940

100.0

%

$

12,118

5.9

%

$

(31,377

)

-13.3

%

Gross profit (1)

113,476

52.4

%

108,835

53.2

%

124,171

52.6

%

4,641

4.3

%

(15,336

)

-12.4

%

SG&A

113,069

52.2

%

115,439

56.4

%

124,707

52.9

%

(2,370

)

-2.1

%

(9,268

)

-7.4

%

Income (loss) from operations

$

407

0.2

%

$

(6,604

)

-3.2

%

$

(536

)

-0.2

%

$

7,011

-106.2

%

$

(6,068

)

NM

(1)

Gross profit at the segment level is considered a Non-GAAP financial measure due to the included effects of intercompany transactions. Refer to the reconciliation of segment results to consolidated results of operations presented above.

*53 weeks for fiscal 2024 as compared with 52 weeks for fiscal 2025 and 2023.

19

Retail sales by major product category for the fiscal years ended November 29, 2025, November 30, 2024 and November 25, 2023 were as follows:

2025

2024*

2023

Bassett Custom Upholstery

$

117,231

54.1

%

$

111,943

54.7

%

$

134,000

56.8

%

Bassett Leather

9,121

4.2

%

4,990

2.4

%

1,951

0.8

%

Bassett Custom Wood

31,885

14.7

%

32,201

15.7

%

36,732

15.6

%

Bassett Casegoods

29,218

13.5

%

26,179

12.8

%

32,252

13.7

%

Accessories, mattresses & other (1)

29,226

13.5

%

29,250

14.3

%

31,005

13.1

%

Total

$

216,681

100.0

%

$

204,563

100.0

%

$

235,940

100.0

%

(1)

Includes the sale of goods other than Bassett-branded products, such as accessories and bedding, and also includes the sale of furniture protection plans.

*53 weeks for fiscal 2024 as compared with 52 weeks for fiscal 2025 and 2023.

Fiscal 2025 as Compared to Fiscal 2024

Net sales for the year ended November 29, 2025 increased $12,118 or 5.9% from fiscal 2024. Written sales (the value of sales orders taken but not delivered) increased 1.2% from fiscal 2024. Gross margin for the year ended November 29, 2025 declined 80 basis points from fiscal 2024. Excluding the $471 of additional inventory valuation charges in the prior year period, gross margins would have decreased by 100 basis points due to lower margins for both in-line and clearance goods as we have become more aggressive in cycling through unproductive inventory coupled with increased promotional activity. In addition, the Company-owned stores did not take a price increase related to the increase in tariff costs until January 2026. SG&A expenses as a percentage of sales for the year ended November 29, 2025 decreased 420 basis points primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024, lower advertising and marketing costs, efficiency gains in our warehouse and delivery operation along with greater leverage of fixed costs due to higher sales levels.

Retail backlog at November 29, 2025 was $34,402 compared to $37,053 at November 30, 2024.

Corporate and Other

In addition to the two reportable segments discussed above, we include our remaining business activities and assets in a reconciling category known as Corporate and other, which includes the shared costs of various corporate functions along with any operating segments that do not meet the requirements to be reportable segments. Therefore, Noa Home is included within the Corporate and other reconciling category and accounts for all of the sales and gross profit within this reconciling category. Revenues, costs and expenses of Corporate and other for the fiscal years ended November 29, 2025, November 30, 2024 and November 25, 2023 are as follows:

Comparative Change

2025 vs 2024

2024 vs 2023

2025

2024*

2023

Dollars

Percent

Dollars

Percent

Net sales

$

-

0.0

%

$

4,919

100.0

%

$

8,804

100.0

%

$

(4,919

)

-100.0

%

$

(3,885

)

-44.1

%

Gross profit

-

0.0

%

2,116

43.0

%

4,802

54.5

%

(2,116

)

-100.0

%

(2,686

)

-55.9

%

SG&A

27,652

NM

30,572

621.5

%

34,728

394.5

%

(2,920

)

-9.6

%

(4,156

)

-12.0

%

Income (loss) from operations

$

(27,652

)

NM

$

(28,456

)

-578.5

%

$

(29,926

)

-339.9

%

$

804

-2.8

%

$

1,470

-4.9

%

*53 weeks for fiscal 2024 as compared with 52 weeks for fiscal 2025 and 2023.

Fiscal 2025 as Compared to Fiscal 2024

Sales and gross profit for the year ended November 29, 2025 declined from fiscal 2024 due to the closure and liquidation of Noa Home during fiscal 2024. The $2,920 decrease in SG&A expenses from fiscal 2024 was primarily due to the closure of Noa Home and decreased corporate overhead spending from better expense management, including the benefit of cost reductions implemented during the second half of fiscal 2024, partially offset by increased incentive compensation.

20

Other Items Affecting Net Income (Loss)

Other items affecting net income (loss) for fiscal 2025, 2024 and 2023 are as follows:

2025

2024

2023

Interest income (1)

$

1,979

$

2,673

$

2,528

Interest expense (2)

(52

)

(30

)

(22

)

Net periodic pension costs (3)

(260

)

(430

)

(496

)

Net gains (cost) of company-owned life insurance

(84

)

302

(572

)

Other

(650

)

(616

)

(791

)

Total other income (loss), net

$

933

$

1,899

$

647

(1)

Consists of interest income arising from our short-term investments and interest-bearing cash equivalents. The decrease in interest income for fiscal 2025 as compared with fiscal 2024 was due primarily to lower interest rates paid on certificates of deposit. See Note 3 to the Consolidated Financial Statements for additional information regarding our investments in certificates of deposit.

(2)

Interest expense is attributable to finance leases for trucks and computer and office equipment. See Note 15 to the Consolidated Financial Statements for additional information regarding our leases.

(3)

Represents the portion of net periodic pension costs not included in income from operations. See Note 10 to the Consolidated Financial Statements for additional information related to our defined benefit pension plans.

Provision for Income taxes

We recorded income tax expense (benefit) of $2,660, $(4,675) and $683 for fiscal 2025, 2024 and 2023, respectively. Our effective tax rate of 30.4% for 2025 differs from the federal statutory rate of 21.0% primarily due to the effects of state income taxes and various permanent differences, capital loss carrybacks, provision to return adjustments and other charges. Our effective tax rate of 32.5% for 2024 differs from the federal statutory rate of 21.0% due to the increases in the valuation allowance placed on deferred tax assets resulting from pre-tax losses in foreign tax jurisdictions associated with Noa Home, the nondeductible impairment of the Noa Home tradename, the tax benefit recorded for the capital loss associated with the cumulative investment in Noa Home due to the shutdown of the operations, the effects of state income taxes, various permanent differences, provision to return adjustments and other charges.

We have net deferred tax assets of $5,979 as of November 29, 2025, which, upon utilization, are expected to reduce our cash outlays for income taxes in future years. It will require approximately $28,500 of future taxable income to utilize our net deferred tax assets. See Note 13 to the Consolidated Financial Statements for additional information regarding income taxes.

Liquidity and Capital Resources

We are committed to maintaining a strong balance sheet in order to weather difficult industry conditions, to allow us to take advantage of opportunities as market conditions improve, and to execute our long-term retail strategies.

Cash Flows

Cash provided by operations for the year ended November 29, 2025 was $13,491 compared to cash provided by operations of $4,050 for the year ended November 30, 2024, representing an increase of $9,441 in cash flows from operations. This increase was primarily the result of improved operating income and changes in working capital due to the timing impact of expenditures as a result of an additional week in the first quarter of 2024.

Our overall cash position increased $1,726 for fiscal 2025. We spent $4,530 on purchases of property and equipment, $6,939 in dividends and $2,150 to repurchase shares under our existing stock repurchase program. As of November 29, 2025, $18,254 remains available for future purchases under our stock repurchase plan. During the fourth quarter of fiscal 2025, a $2,500 CD which had formerly been pledged as collateral against our merchant services agreement with a bank matured and was not reinvested. With cash and cash equivalents and short-term investments totaling $59,240 on hand at November 29, 2025, expected future operating cash flows and the availability under our credit line noted below, we believe we have sufficient liquidity to fund operations for the foreseeable future.

21

Debt and Other Obligations

Bank Credit Facility

On May 15, 2024, we entered into the Eighth Amended and Restated Credit Agreement with our bank (the “Credit Facility”). This Credit Facility provides for a line of credit of up to $25,000. At November 29, 2025, we had $8,182 outstanding under standby letters of credit against our line. The line bears interest at the One-Month Term Secured Overnight Financing Rate (“One-Month Term SOFR”) plus 1.75% and is secured by our accounts receivable and inventory. Our bank charges a fee of 0.25% on the daily unused balance of the line, payable quarterly. Under the terms of the Credit Facility, Consolidated Minimum Tangible Net Worth (as defined in the Credit Facility) shall at no time be less than $120,000. In addition, we must maintain the following financial covenants, measured quarterly on a rolling twelve-month basis and commencing as of the end of the first fiscal quarter after the first date that the used commitment (the sum of any outstanding advances plus standby letters of credit) equals or exceeds $8,250:

●

Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility) of not less than 1.2 times; and

●

Consolidated Lease Adjusted Leverage to EBITDAR Ratio (as defined in the Credit Facility) not to exceed 3.35 times.

Since our used commitment was less than $8,250 at November 29, 2025, we were not required to test the Consolidated Fixed Charge Coverage Ratio or the Consolidated Lease Adjusted Leverage to EBITDAR Ratio. However, had we been required to test those ratios, we would have been in full compliance. Consequently, our availability under the Credit Facility is currently $16,818. As of November 29, 2025 the Credit Facility was scheduled to expire on January 31, 2027. Subsequent to November 29, 2025, the Credit Facility has been extended through January 31, 2029 under substantially the same terms.

Leases

We lease land and buildings that are used in the operation of our Company-owned retail stores as well as in the operation of certain of our licensee-owned stores, and we lease land and buildings at various locations throughout the continental United States for warehouse space used in our retail segment. We also lease trucks used in our wholesale and retail segments. The total future minimum lease payments for leases with terms in excess of one year at November 29, 2025 is $105,045 the present value of which is $89,392 and is included in our accompanying consolidated balance sheet at November 29, 2025. We were contingently liable under licensee lease obligation guarantees in the amount of $4,148 at November 29, 2025. The remaining terms under these lease guarantees range from approximately one to five years. See Note 15 to our Consolidated Financial Statements for a schedule of future cash payments on our lease obligations and additional details regarding our leases and lease guarantees.

Post-Employment Benefits

We provide post-employment benefits to certain current and former executives and management level employees of the Company. Included among these benefits are two defined-benefit plans with a combined projected benefit obligation of $6,990 at November 29, 2025. See Note 10 to our consolidated financial statements for a projection of future benefit payments under these plans from 2026 through 2035. We also have deferred compensation plans with a total liability of $5,530 at November 29, 2025, the current portion of which is $327. See Note 10 to our Consolidated Financial Statements for additional information regarding these plans.

Dividends and Share Repurchases

During fiscal 2025, we declared and paid four quarterly dividends totaling $6,939, or $0.80 per share. During fiscal 2025, we repurchased 142,121 shares of our stock for an aggregate of $2,150 under our share repurchase program. The weighted-average effect of these share repurchases on basic earnings per share from continuing operations was less than $0.01 per share. On March 9, 2022, our Board of Directors increased the remaining limit of the repurchase plan to $40,000. The approximate dollar value that may yet be purchased pursuant to our stock repurchase program as of November 29, 2025 was $18,254.

22

Capital Expenditures

We currently anticipate that total capital expenditures for fiscal 2026 will be between $8 million and $12 million, which will be used for tenant improvements on new retail stores and additional investments in information technology, including enhancements to our website. Our capital expenditure and working capital requirements in the foreseeable future may change depending on many factors, including but not limited to the overall performance of the store program, our rate of growth, our operating results and any adjustments in our operating plan needed in response to industry conditions, competition or unexpected events. We believe that our existing cash, together with cash from operations, will be sufficient to meet our capital expenditure and working capital requirements for the foreseeable future.

Fair Value Measurements

We account for items measured at fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures. ASC 820’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. ASC 820 classifies these inputs into the following hierarchy:

Level 1 Inputs– Quoted prices for identical instruments in active markets.

Level 2 Inputs– Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs– Instruments with primarily unobservable value drivers.

We believe that the carrying amounts of our current assets and current liabilities approximate fair value due to the short-term nature of these items. Our primary non-recurring fair value estimates, typically involving the valuation of goodwill impairments (see Note 7 to the Consolidated Financial Statements) and asset impairments (see Note 14 to the Consolidated Financial Statements) have utilized Level 3 inputs.

Off-Balance Sheet Arrangements

We utilize stand-by letters of credit in the procurement of certain goods in the normal course of business. We lease land and buildings that are primarily used in the operation of our retail BHF stores and distribution facilities as well as certain manufacturing facilities in our upholstery operations. We have guaranteed certain lease obligations of licensee operators as part of our retail strategy. See Note 15 to the Consolidated Financial Statements, included in Item 8 of this Annual Report on Form 10-K, for further discussion of lease guarantees, including descriptions of the terms of such commitments and methods used to mitigate risks associated with these arrangements.

Contingencies

We are involved in various claims and litigation as well as environmental matters which arise in the normal course of business. Although the final outcome of these legal and environmental matters cannot be determined, based on the facts presently known, it is our opinion that the final resolution of these matters will not have a material adverse effect on our financial position or future results of operations.

Critical Accounting Estimates

Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) which requires that certain estimates and assumptions be made that affect the amounts and disclosures reported in those financial statements and the related accompanying notes. Actual results could differ from these estimates and assumptions. We use our best judgment in valuing these estimates and may, as warranted, solicit external advice. Estimates are based on current facts and circumstances, prior experience and other assumptions believed to be reasonable. The following critical accounting estimates, some of which are impacted significantly by judgments, assumptions and estimates, affect our consolidated financial statements.

Returns and Allowances – We record an estimate for returns and allowances as a reduction of revenue based on our historical return patterns. The estimate for returns and allowances was $2,732, $3,970 and $4,883 at November 29, 2025, November 30, 2024 and November 25, 2023.

Allowance for credit losses - We maintain an allowance for credit losses for estimated losses resulting from the inability of our customers to make required payments. Our accounts receivable reserves were $429 and $1,097 at November 29, 2025 and November 30, 2024, respectively, representing 2.9% and 7.7% of our gross accounts receivable balances at those dates, respectively. The allowance for credit losses is based on a review of specifically identified customer accounts in addition to an overall aging analysis which is applied to accounts pooled on the basis of similar risk characteristics. Judgments are made with respect to the collectibility of accounts receivable within each pool based on historical experience, current payment practices and current economic trends We have elected to use the practical expedient under ASC Topic 326 which allows us to assume that current conditions as of the balance sheet date do not change over the expected life of the receivables (see Recent Accounting Pronouncements below regarding the early adoption of ASU 2025-05). Although actual losses have not differed materially from our previous estimates, future losses could differ from our current estimates. Unforeseen events such as a licensee or customer bankruptcy filing could have a material impact on our results of operations.

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Inventory Reserves - We estimate an inventory reserve for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand and market conditions. Our reserves for excess and obsolete inventory were $6,027 and $5,395 at November 29, 2025 and November 30, 2024, respectively, representing 8.9% of our inventories on a LIFO basis at both years. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required.

Goodwill – Goodwill represents the excess of the fair value of consideration given over the fair value of the tangible assets and liabilities and identifiable intangible assets of businesses acquired. The acquisition of assets and liabilities and the resulting goodwill is allocated to the respective reporting unit: Wood, Upholstery, Retail – Company-Owned Stores, and Noa Home. We review goodwill at the reporting unit level annually for impairment or more frequently if events or circumstances indicate that assets might be impaired.

In accordance with ASC Topic 350, Intangibles – Goodwill & Other, we first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test described in ASC Topic 350. The more likely than not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the quantitative impairment test is unnecessary and our goodwill is considered to be unimpaired. However, if based on our qualitative assessment we conclude that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we will proceed with performing the quantitative evaluation process. For the annual test of goodwill performed as of the beginning of the fourth quarter of fiscal 2025, 2024 and 2023 we performed the qualitative assessment as described above with respect to our upholstery reporting unit and concluded that there was no impairment of goodwill. With respect to our former Noa Home reporting unit, for the annual test of goodwill as of the beginning of the fourth quarter of fiscal 2023 we proceeded to the quantitative test and concluded that the goodwill allocated to that reporting unit as of November 25, 2023 was fully impaired.

The quantitative evaluation compares the carrying value of each reporting unit that has goodwill with the estimated fair value of the respective reporting unit. Should the carrying value of a reporting unit be in excess of the estimated fair value of that reporting unit, a goodwill impairment charge will be recognized in the amount by which the reporting unit’s carrying amount exceeds its fair value, but not to exceed the total goodwill assigned to the reporting unit. The determination of the fair value of our reporting units is based on a combination of a market approach, that considers benchmark company market multiples, an income approach, that utilizes discounted cash flows for each reporting unit and other Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurements and Disclosure, and, in the case of our retail reporting unit, a cost approach that utilizes estimates of net asset value. The cash flows used to determine fair value are dependent on a number of significant management assumptions such as our expectations of future performance and the expected future economic environment, which are partly based upon our historical experience. Our estimates are subject to change given the inherent uncertainty in predicting future results. Additionally, the discount rate and the terminal growth rate are based on our judgment of the rates that would be utilized by a hypothetical market participant. As part of the goodwill impairment testing, we also consider our market capitalization in assessing the reasonableness of the combined fair values estimated for our reporting units. While we believe such assumptions and estimates are reasonable, the actual results may differ materially from the projected amounts.

Other Intangible Assets – Intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized but are tested for impairment annually or between annual tests when an impairment indicator exists. The recoverability of indefinite-lived intangible assets is assessed by comparison of the carrying value of the asset to its estimated fair value. If we determine that the carrying value of the asset exceeds its estimated fair value, an impairment loss equal to the excess would be recorded. During fiscal 2024, as a result of our decision to cease operations at Noa Home, we recognized a charge of $1,827 to fully impair the Noa Home trade name intangible asset. At November 29, 2025, our indefinite-lived intangible asset other than goodwill consisted of the trade name acquired in the acquisition of Lane Venture and had a carrying value of $6,848.

Definite-lived intangible assets are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. We estimate the useful lives of our intangible assets and ratably amortize the value over the estimated useful lives of those assets. If the estimates of the useful lives should change, we will amortize the remaining book value over the remaining useful lives or, if an asset is deemed to be impaired, a write-down of the value of the asset may be required at such time. At November 29, 2025 our definite-lived intangible assets consist of customer relationships acquired in the acquisition of Lane Venture with a carrying value of $62.

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Impairment of Long-Lived Assets - We periodically evaluate whether events or circumstances have occurred that indicate long-lived assets may not be recoverable or that the remaining useful life may warrant revision. When such events or circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value will be recovered through the expected undiscounted future cash flows resulting from the use of the asset. In the event the sum of the expected undiscounted future cash flows is less than the carrying value of the asset, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. When analyzing our real estate properties for potential impairment, we consider such qualitative factors as our experience in leasing and selling real estate properties as well as specific site and local market characteristics. Upon the closure of a Bassett Home Furnishings store, we generally write off all tenant improvements which are only suitable for use in such a store. Right of use assets under operating leases are written down to their estimated fair value. Our estimates of the fair value of the impaired right of use assets include estimates of discounted cash flows based upon current market rents and other inputs which we consider to be Level 3 inputs as specified in the fair value hierarchy in ASC Topic 820, Fair Value Measurement and Disclosure.

Recent Accounting Pronouncements

See Note 2 to our Consolidated Financial Statements regarding the impact or potential impact of recent accounting pronouncements upon our financial position and results of operations.

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