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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C., 20549

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended November 29, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File No. 000-00209

BASSETT FURNITURE INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)

VIRGINIA

54-0135270

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

3525 FAIRYSTONE PARK HIGHWAY

BASSETT, VIRGINIA

24055

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code 276/629-6000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Trading Symbol		Name of each exchange on which registered
Common Stock ($5.00 par value)		BSET		NASDAQ

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for at least the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☒
Non-Accelerated Filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ☐ Yes ☒ No

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of May 31, 2025 was $133,570,442.

The number of shares of the Registrant’s common stock outstanding on January 28, 2026 was 8,654,370

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Bassett Furniture Industries, Incorporated definitive Proxy Statement for its 2026 Annual Meeting of Stockholders to be held March 11, 2026, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934 (the “Proxy Statement”) are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS		1

PART I
Item 1.	Business	2
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	9
Item 1C.	Cybersecurity	9
Item 2.	Properties	11
Item 3.	Legal Proceedings	11
Item 4.	Mine Safety Disclosures	11
	Information about our Executive Officers	12

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	13
Item 6.	[Reserved]	13
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	25
Item 8.	Financial Statements and Supplementary Data	27
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	60
Item 9A.	Controls and Procedures	60
Item 9B.	Other Information	62
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	62

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	62
Item 11.	Executive Compensation	62
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	62
Item 13.	Certain Relationships and Related Transactions, and Director Independence	62
Item 14.	Principal Accountant Fees and Services	62
Item 15.	Exhibits	63
Item 16.	Form 10-K Summary	64

PART IV

SIGNATURES		65

As used herein, unless the context otherwise requires, “Bassett,” the “Company,” “we,” “us” and “our” refer to Bassett Furniture Industries, Incorporated and its subsidiaries. References to 2025, 2024 and 2023 mean the fiscal years ended November 29, 2025, November 30,2024 and November 25, 2023. Please note that fiscal 2024 contained 53 weeks while fiscal 2025 and 2023 each contained 52 weeks.

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”, “aimed” 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, which should be read in conjunction with Item 1A “Risk 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 duties, tariffs, retaliatory tariffs 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 internet 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

You should keep in mind that any forward-looking statement made by us in this report 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 report 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 might not occur.

PART I

ITEM 1. BUSINESS

(dollar amounts in thousands except per share data)

General

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.

Operating Segments

We have strategically aligned our business into two reportable segments:

●

Wholesale

●

Retail—Company-owned stores

Wholesale Segment Overview

The wholesale segment is involved principally in the design, manufacturing and sourcing of furniture products that are distributed through our BHF store network (both Company-owned and licensee-owned stores) and various independent retailers. The wholesale furniture industry is very competitive and there are a large number of manufacturers both within and outside the United States who compete in the market on the basis of product quality, price, style, delivery and service. Additionally, many retailers source imported product directly, thus bypassing domestic furniture manufacturers and wholesale importers. We believe that we can be successful in the current competitive environment because our products represent excellent value combining attractive prices, quality and styling, prompt delivery, and superior service.

Wholesale shipments by category for the last three fiscal years, excluding intercompany sales to our retail segment, 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.

Approximately 23% of our 2025 wholesale sales were of imported product compared to 20% in 2024 and 22% in 2023. We define imported product as fully finished product that is sourced. Our domestic product includes certain products that contain components which were also sourced. We continue to believe that a blended strategy including domestically produced products primarily of a custom-order nature combined with sourcing of major collections provides the best value and quality of products to our customers.

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.

We use lumber, fabric, leather, foam and other materials in the production of wood and upholstered furniture. These components are purchased from a variety of domestic and international suppliers and are widely available. The price and availability of foam, which is highly dependent on the cost of oil and available capacity of oil refineries, can be subject to significant volatility from time to time.

Retail Segment Overview – Company-Owned Retail Stores

The retail—Company-owned stores segment consists of 57 BHF stores that provide consumers with a friendly and casual environment for buying furniture and accessories. The retail furniture industry remains very competitive and includes local furniture stores, regional furniture retailers, national department and chain stores, single-vendor branded retailers and on-line retailers. As a whole, our store network which includes 29 licensee-owned stores in addition to the 57 BHF Company-owned stores, ranks in the top 40 in retail furniture sales in the United States. The following table shows the number of Company-owned stores by state at November 29, 2025:

	Number of		Number of
State	Stores	State	Stores
Arizona	3	Nevada	1
Arkansas	1	New Jersey	2
California	1	New York	4
Connecticut	3	North Carolina	5
Delaware	1	Ohio	2
Florida	5	Oklahoma	1
Georgia	3	Pennsylvania	2
Kentucky	1	South Carolina	1
Maryland	3	Tennessee	1
Massachusetts	1	Texas	11
Missouri	1	Virginia	4
		Total	57

Net sales for our Company-owned retail stores by major product category for the last three fiscal years are summarized below:

	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 sales 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.

We also continue to examine the performance of every one of our stores. Store traffic has been declining and the effect on our retail model has become increasingly challenging. We believe that on a market-by-market basis, there will be fewer stores in the future. We will continue to evaluate store-by-store performance as we seek the optimal store count in the markets in which we compete at retail. We closed one store in 2025 and expect to open two new stores in 2026. We are also planning to relocate one store within the same market in late 2026 or 2027.

Corporate and Other

In addition to the two reportable segments described above, we include our remaining business activities 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. 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 was Noa Home, which was acquired on September 2, 2022. All sales reported in our Corporate and other category were attributable to Noa Home, which generated substantially all of its sales outside of the United States. During the second quarter of 2024 we concluded that Noa Home was not likely to achieve profitability 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.

Trademarks

Our trademarks, including “Bassett” and the names of some of our marketing divisions, products and collections, are significant to the conduct of our business. This is important due to consumer recognition of the names and identification with our broad range of products. Certain of our trademarks are licensed to independent retailers for use in full store and store gallery presentations of our products. We also own copyrights that are important in the conduct of our business.

Government Regulations

We believe that we have materially complied with all federal, state and local standards regarding safety, health and pollution and environmental controls.

We may also be affected by laws and regulations of countries from which we source goods. Labor, environmental and other laws and regulations change over time, especially in the developing countries from which we source. Changes in these areas of regulation could negatively impact the cost and availability of sourced goods. The timing and extent to which these regulations could have an adverse effect on our financial position or results of operations is difficult to predict. In addition, the imposition of new or increased duties, tariffs, retaliatory tariffs and trade limitations with respect to foreign-sourced products could negatively impact the cost of such goods. While we currently do not believe that costs associated with such trade policies will have a material adverse effect on our financial position or future results of operations, changes to such policies in the future could negatively impact our financial position or future results of operations.

Human Capital

We employed 1,194 people as of November 29, 2025. Our associate count represents a decrease of 34 from a year ago, 29 due to headcount reductions in our manufacturing facilities in response to business conditions and 9 in our retail segment primarily attributable to the closure of a store location and the consolidation of several warehouses. Headcount by segment is as follows:

●

615 in the wholesale segment

●

444 in the retail segment

●

135 in the corporate segment

We approach our workplace culture by being Invested… In Each Other, the tenets of which include fostering a workplace that promotes respect for each other, investing in our associates’ well-being, providing safe and comfortable work environments, offering opportunities to develop personally and professionally, being good stewards of the environment, and giving back to the communities in which we work and live. We believe that these investments are crucial to the success of our associates and our Company.

Focus Group Study

In 2025 we conducted a focus group study, facilitated by a third-party consultant, in our manufacturing facilities and our corporate office. Meeting in groups of 8-10, approximately 20% of our associates participated and shared their thoughts about the Company and their work environment. This information was provided to senior management by the consultant in location-specific summary reports. Based on opinions shared by the focus groups, we gained valuable insight into how we can improve our work environments and better communicate with our associates.

Workplace Respect

We value the diversity of our associates as an essential component in the way we do business. It continues to be Bassett’s policy to be equitable and impartial in our relations with our associates and to base all employment-related decisions upon valid, job-related factors, without regard to race, color, religion, national origin, age, sex, physical or mental disability, genetic information, veteran or other protected status.

We continue to maintain and enforce our policy prohibiting discrimination and harassment in our workplace. Our managers are trained in how to prevent, recognize and respond to possible inappropriate behavior. Associates have several available avenues for reporting concerns, including a confidential hotline. We promptly and carefully investigate each complaint of harassment or discrimination. More details about our commitment to preventing discrimination and harassment in our workplaces are available on our website.

Quality of Life

We continue to invest in the physical and mental well-being of our associates, their spouses and their children.

●

Our benefits and wellness app, free to our associates and their dependents, assists with locating best-in-class, in terms of quality and cost, healthcare providers and facilities, along with free virtual exercise therapy for back and joint care.

●

We offer several free online mental and behavioral health resources, with unlimited access to board-certified psychiatrists and licensed therapists.

●

Our wellness programs, including onsite health clinics, personalized health coaching, mental health counseling, and incentivized healthy lifestyle choices, are designed to improve associate health and reduce healthcare costs for both the associate and the Company.

●

We provide opportunities for our associates to meet with a certified financial planner for personalized retirement planning and budget counseling.

●

We offer comprehensive benefit plans including Company-subsidized health insurance, 401(k) Plan with Company matching contributions, and paid time off. We believe our benefit plans are competitive and meet the needs of most of our associates.

Work Environment

Our investments in our facilities continue, which improve our associates’ safety and comfort, and increase efficiency. These include:

●

Continued installation of air quality control equipment at our Martinsville, VA facility.

●

Roof replacement and a complete freight elevator refurbishment at our Central Warehouse in Bassett, VA.

●

Installation of a new HVAC system at one of our upholstery manufacturing facilities in Newton, NC.

●

Installation of a biometric (finger scan) building entry system at our Corporate Office to improve security.

Our comprehensive human resources, benefits, payroll and timekeeping system gives our associates the ability to view, and where applicable, update their personal information, benefits enrollments, pay history and time worked in real time.

Through our “Opportunities For Improvement” program, associates can submit an “OFI” about a job-related issue they’ve experienced or observed and a suggestion for improvement. Examples include concerns related to product quality, process improvement, safety and communication issues.

Professional Development

We offer opportunities to our associates for educational and skill development, including:

●

Tuition reimbursement for associates who desire to further their education

●

Online training for managers, with classes completed monthly

●

Training for customer-facing associates designed to enhance the in-store and follow up experiences for our customers

Environmental and Civic Responsibility

Representing our commitment to sustainably sourced hardwoods, each Arbor Day since 2021, over 30 of our associates travel to central Ohio to take part in the planting of Appalachian hardwood seedlings. This event is hosted by our BenchMade supply partners, and over 220,000 trees have been planted to date – and counting. Additionally, we remain committed to our recycling efforts. Materials recycled in 2025 include:

	Tons		Tons
Wood Dust	1,333	Fabric Scraps	177
Paper/Cardboard	162	Wood Pallets	148
Metal/Electronics	56	Finishing Materials	16
Plastic	36
Foam	9,450 cubic feet

In 2025, we partnered with the mission-driven team from Military Makeover with Montel® to design and furnish a home for a North Carolina veteran and his family. Additionally, we supported numerous other charitable and civic organizations with monetary and in-kind donations.

Major Customers

Our risk exposure related to our customers, consisting primarily of trade accounts receivable along with certain guarantees, net of recognized reserves, totaled approximately $18,528 and $18,281 at November 29, 2025 and November 30, 2024, respectively. At November 29, 2025 and November 30, 2024, approximately 41% and 43%, respectively, of the aggregate risk exposure, net of reserves, was attributable to five customers. In fiscal 2025, 2024 and 2023, no customer accounted for more than 10% of total consolidated net sales.

Available Information

We file our annual, quarterly and current reports, proxy statements and other information with the SEC. Our filings with the Securities and Exchange Commission (“SEC”) are available to the public at the SEC’s website at www.sec.gov.

Through our website, www.bassettfurniture.com, we make available free of charge as soon as reasonably practicable after electronically filing or furnishing with the SEC, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments thereto.

ITEM 1A. RISK FACTORS

The following risk factors should be read carefully in connection with evaluating our business and the forward-looking information contained in this Annual Report on Form 10-K. The risk factors below represent what we believe are the known material risk factors with respect to us and our business. Any of the following risks could materially adversely affect our business, operations, industry, financial position or future financial results.

Risks Related to Our Retail Operations

We face a volatile retail environment and changing economic conditions that may further adversely affect consumer demand and spending.

Historically, the home furnishings industry has been subject to cyclical variations in the general economy and to uncertainty regarding future economic prospects. Should current economic conditions weaken, the current rate of housing starts continue to decline, or rising inflation persist, consumer confidence and demand for home furnishings could deteriorate which could adversely affect our business through its impact on the performance of our Company-owned stores, as well as our licensees and the ability of a number of them to meet their obligations to us.

Our retail stores face significant competition from national, regional and local retailers of home furnishings, including increasing on-line competition via the internet.

The retail market for home furnishings is highly fragmented and intensely competitive. We currently compete against a diverse group of retailers, including national department stores, regional or independent specialty stores, and dedicated franchises of furniture manufacturers. National mass merchants such as Costco also have limited product offerings. We also compete with retailers that market products through store catalogs and the internet. In addition, there are few barriers to entry into our current and contemplated markets, and new competitors may enter our current or future markets at any time. We have also seen increasing competition from retailers offering consumers the ability to purchase home furnishings via the internet for home delivery, and this trend is expected to continue. Our existing competitors or new entrants into our industry may use a number of different strategies to compete against us, including aggressive advertising, pricing and marketing, extension of credit to customers on terms more favorable than we offer, and expansion into markets where we currently operate. Competition from any of these sources could cause us to lose market share, revenues and customers, increase expenditures or reduce prices, any of which could have a material adverse effect on our results of operations.

Our licensee-owned stores may not be able to meet their obligations to us.

We have a significant amount of accounts receivable attributable to our network of licensee-owned stores. We also guarantee one lease each for two licensees. If these stores do not generate the necessary level of sales and profits, the licensees may not be able to fulfill their obligations to us resulting in additional bad debt expenses and real estate related losses.

Risks Related to Our Brand and Product Offerings

Failure to successfully anticipate or respond to changes in consumer tastes and trends in a timely manner could adversely impact our business, operating results and financial condition.

Sales of our furniture are dependent upon consumer acceptance of our designs, styles, quality and price. As with all retailers, our business is susceptible to changes in consumer tastes and trends. We attempt to monitor changes in consumer tastes and home design trends through attendance at international industry events and fashion shows, internal marketing research, and communication with our retailers and design consultants who provide valuable input on consumer tendencies. However, such tastes and trends can change rapidly and any delay or failure to anticipate or respond to changing consumer tastes and trends in a timely manner could adversely impact our business, operating results and financial condition.

In addition, certain suppliers may require extensive advance notice of our requirements in order to produce products in the quantities we desire. This long lead time may require us to place orders far in advance of the time when certain products will be offered for sale, thereby exposing us to risks relating to shifts in consumer demand and trends, and any downturn in the U.S. economy.

Our success depends upon our brand, marketing and advertising efforts and pricing strategies, and if we are not able to maintain and enhance our brand, or if we are not successful in these efforts and strategies, our business and operating results could be adversely affected.

Maintaining and enhancing our brand is critical to our ability to expand our base of customers and drive increased traffic at both Company-owned and licensee-owned stores and on our website. 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 have also invested heavily in our website and e-commerce. We cannot provide assurance that our marketing, advertising and other efforts to promote and maintain awareness of our brand will not require us to incur substantial costs. If these efforts are unsuccessful or we incur substantial costs in connection with these efforts, our business, operating results and financial condition could be adversely affected.

Risks Related to Material Sourcing and Supply

Our use of foreign sources of production for a portion of our products exposes us to certain additional risks associated with international operations.

Our use of foreign sources for the supply of certain of our products exposes us to risks associated with overseas sourcing. These risks are related to government regulation, volatile ocean freight costs, delays in shipments, and extended lead time in ordering. The U.S. government as well as governments in the foreign countries where we source our products may change their laws, regulations and policies, including those related to tariffs and trade barriers, investments, taxation and exchange controls which could make it more difficult to service our customers resulting in an adverse effect on our earnings.

Fluctuations in the price, availability and quality of raw materials could result in increased costs or cause production delays which might result in a decline in sales, either of which could adversely impact our earnings.

We use various types of wood, foam, fibers, fabrics, leathers, and other raw materials in manufacturing our furniture. Certain of our raw materials, including fabrics, are purchased both abroad and domestically. Fluctuations in the price, availability and quality of raw materials could result in increased costs or a delay in manufacturing our products, which in turn could result in a delay in delivering products to our customers. For example, lumber prices fluctuate over time based on factors such as weather and demand, which in turn impact availability. There is no guarantee that we will be able to successfully pass along additional cost increases as they arise and rising inflation could have an adverse impact upon consumer demand for discretionary items such as home furnishings. Production delays or upward trends in raw material prices could result in lower sales or margins, thereby adversely impacting our earnings.

Risks Related to Electronic Data Processing and Digital Information

We rely extensively on computer systems to process transactions, summarize results and manage our business. Disruptions in both our primary and back-up systems could adversely affect our business and operating results.

Our primary and back-up computer systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, natural disasters and errors by employees. Though losses arising from some of these issues would be covered by insurance, interruptions of our critical business computer systems or failure of our back-up systems could reduce our sales or result in longer production times. If our critical business computer systems or back-up systems are damaged or cease to function properly, we may have to make a significant investment to repair or replace them. We have been a target of a cybersecurity attack in the past, and while such attack did not result in a material impact on our operations, business, customer relationships or reputation, we can provide no assurance that cybersecurity attacks or incidents in the future will not have a material adverse impact on our business.

We have previously and may continue in the future to incur costs resulting from security risks we face in connection with our electronic processing, storage and transmission of confidential information whether on computer systems maintained on our internal network or by third parties that may host certain of our systems. We may also incur reputational harm resulting from these security risks.

We accept electronic payment cards in our stores and also gather certain personal identifiable information in the processing of our retail sales transactions. We also store and process confidential information pertaining to our employees and other third parties on our networks. We may in the future become subject to claims for purportedly fraudulent transactions arising out of the actual or alleged theft of credit or debit card information. In addition, if there were a disclosure of confidential information provided by, or concerning, our employees, customers or other third parties, including through inadvertent disclosure, unapproved dissemination, or unauthorized access, our reputation could be harmed, and we could be subject to civil or criminal liability and regulatory actions. Proceedings related to theft of credit or debit card information may be brought by payment card providers, banks and credit unions that issue cards, cardholders (either individually or as part of a class action lawsuit) and federal and state regulators. Any such proceedings could distract our management from running our business and cause us to incur significant unplanned losses and expenses. Consumer perception of our brand could also be negatively affected by these events, which could further adversely affect our results and prospects.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Risk Management and Strategy

The Company maintains an information security program designed in alignment with the ISO/IEC 27001 and ISO/IEC 27002 standards to address risks arising from cybersecurity threats. The program consists of documented policies, standards, and procedures that define the design, implementation, operation, and maintenance of security controls. The maturity and effectiveness of the information security program are evaluated biennially by an independent third party.

A risk assessment is conducted annually. The risk assessment along with risk-based analysis and judgment are used to select security controls to address risks. During this process, the following factors, among others, are considered: likelihood and severity of risk, impact on the Company and others if a risk materializes, feasibility and cost of controls, and impact of controls on operations and others. Specific controls used by the Company include, endpoint threat detection and response (EDR), identity and access management (IAM), multi-factor authentication (MFA), firewalls and intrusion detection and prevention systems, vulnerability and patch management, and ongoing employee information security awareness and training programs. An internal information security audit program is maintained to help ensure that these controls remain operational and effective.

Third-party security firms are used by the Company in different capacities to provide or operate some of these controls and technology systems. Third parties are also used to conduct assessments, such as vulnerability scans and penetration testing of the Company and its systems. The Company uses a variety of processes to address cybersecurity threats related to the use of third-party technology and services.

The Company has a written incident response plan ("IRP") and conducts tabletop exercises to enhance incident response preparedness. Disaster recovery plans are used to prepare for the potential for a disruption in technology we rely on. Employees undergo security awareness training, including phishing simulation training, when hired and periodically throughout the year.

The Company’s executive leadership team meets regularly to address enterprise risks, and cybersecurity is a risk category addressed by that group. In addition to assessing major risks, management identifies and monitors such risks. At least annually, the Company’s executive leadership reviews with the Board of Directors the major risks identified in the enterprise risk management process, as well as the steps identified to mitigate such risks. Each of the business and functional leaders responsible for the management of these identified risks also regularly discuss with the Board changes in assessment of these risks and mitigation plans.

The Company (or third parties it relies on) may not be able to fully, continuously, and effectively implement security controls as intended. As described above, we utilize a risk-based approach and judgment to determine the security controls to implement and it is possible we may not implement appropriate controls if we do not recognize or if we underestimate a particular risk. In addition, security controls, no matter how well designed or implemented, may only mitigate and not fully eliminate risks. And events, when detected by security tools or third parties, may not always be immediately understood or acted upon.

In fiscal 2024, the Company activated its incident response plan to address a cybersecurity incident that was resolved without material impact to the Company. The Company is not aware of any additional cybersecurity threats or incidents to date that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations or financial condition.

Additionally, in Item 1A Risk Factors under the heading of "Risks Related to Electronic Data Processing and Digital Information,” forward-looking cybersecurity threats that could have a material impact on the Company are discussed. That section of Item 1A should be read in conjunction with this Item 1C.

Governance

The Chief Information Officer ("CIO") holds primary oversight responsibility for the team managing the development, operation, and maintenance of our information security program. This team also has responsibility to maintain and enhance the Company’s written cyber security incident response plan, which identifies incident severity classifications and serves as a trigger for escalation for the response team.

With over 25 years of experience across diverse IT technologies, the CIO brings extensive expertise to the role. The CIO is also a member of the Company’s executive leadership team, meeting regularly with the CEO, CFO, and other senior leaders. The CIO directly reports to the Board at least annually, addressing cybersecurity risks and strategy, and attends Board meetings to discuss cybersecurity matters as needed. The Audit Committee provides oversight of the information security program. The CIO reports to the Audit Committee annually on cybersecurity risks and related internal controls and attends quarterly meetings to provide updates and address any questions regarding cybersecurity and information technology systems.

ITEM 2. PROPERTIES

We own the following facilities, by segment:

Wholesale Segment:

Facility	Location

Bassett Wood Division	Martinsville, Virginia
Bassett Upholstery Division	Newton, North Carolina
Bassett Upholstery Division	Haleyville, Alabama
2 Warehouses	Bassett, Virginia

In general, these facilities are suitable and are considered to be adequate for the continuing operations involved. All facilities are in regular use and provide adequate capacity for our manufacturing and warehousing needs. In addition to the owned properties shown above, we lease facilities in Newton, North Carolina for the manufacturing of upholstered furniture and the manufacturing and warehousing operations of outdoor furniture.

Retail Segment:

Real estate associated with our retail segment consists of eight owned locations with an aggregate square footage of 203,465 and a net book value of approximately $23,500,000. These stores are located as follows:

Concord, North Carolina	Greensboro, North Carolina
Greenville, South Carolina	Fredericksburg, Virginia
Houston, Texas	Louisville, Kentucky
Knoxville, Tennessee	Tampa, Florida

Of these locations, two are subject to land leases. Our remaining 49 store locations are leased from third parties. In addition to retail stores, we also lease ten locations for use as regional warehouses and home delivery distribution centers.

Corporate and Other:

We own our corporate office building, which includes an annex, located in Bassett, Virginia.

See Note 15 to the Consolidated Financial Statements included under Item 8 of this Annual Report for more information with respect to our operating lease obligations.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

John E. Bassett III, 67, has been with the Company since 1981 and served in various wood manufacturing and product sourcing capacities, including Vice President, Wood Manufacturing; Vice-President, Global Sourcing from 2001 to 2007 and Vice President, Wood in 2008. He was appointed Senior Vice President, Wood in 2009. In 2019, he was promoted to the position of Senior Vice President, Chief Operations Officer.

Bruce R. Cohenour, 67, has been with the Company since 2011, starting as Senior Vice President of Upholstery Merchandising. In 2013, he was promoted to Senior Vice President of Sales and Merchandising. In 2019, he was appointed Senior Vice President, Chief Sales Officer. Prior to joining Bassett, Mr. Cohenour was with Hooker Furniture Corp. from 2007 through 2010, last serving as President of the Case Goods Division.

J. Michael Daniel, 64, joined the Company in 2007 as Corporate Controller. From April 2009 through December 2009, he served as Corporate Controller and Interim Chief Financial Officer. In January 2010, he was appointed Vice President and Chief Accounting Officer. In January 2013, he was promoted to Senior Vice President and Chief Financial Officer. In 2019, he was also promoted to the position of Senior Vice President, Chief Financial and Administrative Officer.

Jay R. Hervey, Esq., 66, has served as the General Counsel, Vice President and Secretary for the Company since 1997.

Robert H. Spilman, Jr., 69, has been with the Company since 1984. Since 2000, he has served as Chief Executive Officer and President, and in 2016 also became the Chairman of the Board of Directors.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information:

Bassett’s common stock trades on the NASDAQ global select market system under the symbol “BSET.” We had approximately 6,500 beneficial stockholders at January 28, 2026.

Issuer Purchases of Equity Securities:

We are authorized to repurchase Company stock under a plan which was originally announced in 1998. On March 9, 2022, the Board of Directors increased the remaining limit of the repurchase plan to $40,000,000. The repurchase program does not include a specific timetable or price targets and may be suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions at the discretion of management based on its evaluation of prevailing market conditions and other factors. The following table summarizes the stock repurchase activity for the three months ended November 29, 2025, and the approximate dollar value of shares that may yet be repurchased pursuant to our stock repurchase program:

Issuer Purchases of Equity Securities

(amounts in thousands, except share and per share data)

	Total Shares Purchased		Average Price Paid		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

August 31, 2025 - October 4, 2025		8,890	$	15.53		8,890	$	18,744
October 5 - November 1, 2025		17,199	$	15.34		17,199	$	18,480
November 2, 2025 - November 29, 2025		15,172	$	14.90		15,172	$	18,254

ITEM 6. [RESERVED]

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

(Amounts in thousands except share and per share data)

Overview

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.

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.

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	)

	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.

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.

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.

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.

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.

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.

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.

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.

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.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in the value of foreign currencies. Substantially all of our purchases outside of North America are denominated in U.S. dollars. Therefore, we believe that gains or losses resulting from changes in the value of foreign currencies relating to foreign purchases not denominated in U.S. dollars would not be material to our results from operations in fiscal 2025.

We are exposed to market risk from changes in the cost of raw materials used in our manufacturing processes, principally wood, woven fabric, and foam products. The cost of foam products, which are petroleum-based, is sensitive to changes in the prices of oil and refined petroleum materials.

We are also exposed to commodity price risk related to diesel fuel prices for fuel used in our retail segment for home delivery as well as through amounts we are charged for logistical services by our service providers. We manage our exposure to that risk primarily through the application of fuel surcharges to our customers.

We have potential exposure to market risk related to conditions in the commercial real estate market. Our retail real estate holdings of $23,513 and $24,127 at November 29, 2025 and November 30, 2024, respectively, for Company-owned stores, consisting of eight locations with a total of 203,465 square feet of space, could suffer significant impairment in value if we are forced to close additional stores and sell or lease the related properties during periods of weakness in certain markets. Additionally, if we are required to assume responsibility for payment under the lease obligations of $4,148 and $5,131 which we have guaranteed on behalf of licensees as of November 29, 2025 and November 30, 2024, respectively, we may not be able to secure sufficient sub-lease income in the current market to offset the payments required under the guarantees. We are also exposed to risk related to conditions in the commercial real estate rental market with respect to the right-of-use assets we carry on our balance sheet for leased retail store locations and warehouse facilities. At November 29, 2025, the unamortized balance of such right-of-use assets totaled $77,180. Should we have to close or otherwise abandon one of these leased locations, we could incur additional impairment charges if rental market conditions do not support a fair value for the right of use asset in excess of its carrying value.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Bassett Furniture Industries, Incorporated and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Bassett Furniture Industries, Incorporated (a Virginia corporation) and subsidiaries (the “Company”) as of November 29, 2025, the related consolidated statement of operations, comprehensive income (loss), cash flows, and stockholders’ equity for the year ended November 29, 2025, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of November 29, 2025, and the results of its operations and its cash flows for the year ended November 29, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of November 29, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 5, 2026 expressed an unqualified opinion.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Grant Thornton LLP

We have served as the Company’s auditor since 2025.

Charlotte, North Carolina

February 5, 2026

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Bassett Furniture Industries, Incorporated and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Bassett Furniture Industries, Incorporated and subsidiaries (the Company) as of November 30, 2024, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity and cash flows for each of the two years in the period ended November 30, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at November 30, 2024, and the results of its operations and its cash flows for each of the two years in the period ended November 30, 2024, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We served as the Company’s auditor from 2002 to 2024.

Richmond, Virginia

February 10, 2025

Consolidated Balance Sheets

Bassett Furniture Industries, Incorporated and Subsidiaries

November 29, 2025 and November 30, 2024

(In thousands, except share and per share data)

	2025		2024
Assets
Current assets
Cash and cash equivalents	$	41,277	$	39,551
Short-term investments		17,963		20,360
Accounts receivable, net of allowance for credit losses of $429 and $1,097 as of November 29, 2025 and November 30, 2024, respectively		14,410		13,181
Inventories		61,790		54,965
Recoverable income taxes		2,878		4,240
Other current assets		7,224		9,242
Total current assets		145,542		141,539

Property and equipment, net		73,175		77,047

Other long-term assets
Deferred income taxes, net		5,979		6,867
Goodwill		7,217		7,217
Intangible assets		6,910		6,968
Right of use assets under operating leases		76,727		93,624
Other		8,269		7,908
Total other long-term assets		105,102		122,584
Total assets	$	323,819	$	341,170

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	14,739	$	13,303
Accrued compensation and benefits		10,227		6,898
Customer deposits		24,969		25,742
Current portion of operating lease obligations		19,299		18,050
Other accrued liabilities		7,750		9,410
Total current liabilities		76,984		73,403

Long-term liabilities
Post employment benefit obligations		11,379		10,882
Long-term portion of operating lease obligations		69,353		88,395
Other long-term liabilities		996		1,163
Total long-term liabilities		81,728		100,440

Commitments and Contingencies (Notes 15 and 16)

Stockholders’ equity
Common stock, $5 par value; 50,000,000 shares authorized; issued and outstanding: 8,651,054 at November 29, 2025 and 8,736,046 at November 30, 2024		43,256		43,681
Retained earnings		121,128		122,847
Additional paid-in-capital		-		6
Accumulated other comprehensive income		723		793
Total stockholders' equity		165,107		167,327
Total liabilities and stockholders’ equity	$	323,819	$	341,170

The accompanying notes to consolidated financial statements are an integral part of these statements.

Consolidated Statements of Operations

Bassett Furniture Industries, Incorporated and Subsidiaries

For the years ended November 29, 2025, November 30, 2024, and November 25, 2023

(In thousands, except per share data)

	2025			2024			2023

Net sales	$	335,280		$	329,923		$	390,136
Cost of goods sold		146,598			150,508			183,648
Gross profit		188,682			179,415			206,488

Selling, general and administrative expenses		180,357			187,527			205,227
Asset impairment charges		498			5,515			-
Loss on contract abandonment		-			1,240			-
Loss upon realization of cumulative translation adjustment		-			962			-
Restructuring charges		-			440			-
Goodwill impairment charge		-			-			5,409
Gain on revaluation of contingent consideration		-			-			1,013

Income (loss) from operations		7,827			(16,269	)		(3,135	)

Interest income		1,979			2,673			2,528
Interest expense		(52	)		(30	)		(22	)
Other loss, net		(994	)		(744	)		(1,859	)

Income (loss) before income taxes		8,760			(14,370	)		(2,488	)

Income tax expense (benefit)		2,660			(4,675	)		683

Net income (loss)	$	6,100		$	(9,695	)	$	(3,171	)


Basic earnings (loss) per share:	$	0.70		$	(1.11	)	$	(0.36	)

Diluted earnings (loss) per share:	$	0.70		$	(1.11	)	$	(0.36	)

Regular dividends per share	$	0.80		$	0.76		$	0.68

The accompanying notes to consolidated financial statements are an integral part of these statements.

Consolidated Statements of Comprehensive Income (Loss)

Bassett Furniture Industries, Incorporated and Subsidiaries

For the years ended November 29, 2025, November 30, 2024, and November 25, 2023

(In thousands)

	2025			2024			2023

Net income (loss)	$	6,100		$	(9,695	)	$	(3,171	)
Other comprehensive income (loss):
Foreign currency translation adjustments		-			652			(378	)
Income taxes related to foreign currency translation adjustments		-			(166	)		96
Actuarial adjustment to
Long Term Cash Awards (LTCA)		(17	)		(117	)		100
Amortization associated with LTCA		-			61			119
Income taxes related to LTCA		4			14			(59	)
Actuarial adjustment to supplemental executive retirement defined benefit plan (SERP)		(12	)		287			324
Amortization associated with SERP		(65	)		(22	)		-
Income taxes related to SERP		20			(68	)		(100	)

Other comprehensive income (loss), net of tax		(70	)		641			102

Total comprehensive income (loss)	$	6,030		$	(9,054	)	$	(3,069	)

The accompanying notes to consolidated financial statements are an integral part of these statements.

Consolidated Statements of Cash Flows

Bassett Furniture Industries, Incorporated and Subsidiaries

For the years ended November 29, 2025, November 30, 2024, and November 25, 2023

(In thousands)

	2025			2024			2023
Operating activities:
Net income (loss)	$	6,100		$	(9,695	)	$	(3,171	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		8,801			9,918			10,141
Non-cash goodwill impairment charge		-			-			5,409
Gain on revaluation of contingent consideration		-			-			(1,013	)
Asset impairment charges		498			5,515			-
Inventory valuation charges		2,389			5,001			4,626
Deferred income taxes		912			(2,442	)		831
Other, net		1,308			2,284			2,036
Changes in operating assets and liabilities
Accounts receivable		(1,229	)		555			4,102
Inventories		(9,214	)		3,016			17,869
Other current and long-term assets		3,380			(2,427	)		1,773
Right of use assets under operating leases		17,114			17,254			18,680
Customer deposits		(773	)		2,954			(13,175	)
Accounts payable and accrued liabilities		2,713			(7,246	)		(9,188	)
Obligations under operating leases		(18,508	)		(20,637	)		(20,196	)
Net cash provided by operating activities		13,491			4,050			18,724

Investing activities:
Purchases of property and equipment		(4,530	)		(5,211	)		(17,489	)
Proceeds from sales of property and equipment		-			-			500
Investment in certificates of deposit		(316	)		(2,585	)		(60	)
Proceeds from the maturity of certificates of deposit		2,713			-			-
Proceeds from the disposition of discontinued operations		-			-			1,000
Other		(597	)		(972	)		(1,714	)
Net cash used in investing activities		(2,730	)		(8,768	)		(17,763	)

Financing activities:
Cash dividends		(6,939	)		(6,654	)		(5,982	)
Issuance of common stock		335			371			318
Repurchases of common stock		(2,150	)		(1,420	)		(4,176	)
Taxes paid related to net share settlement of equity awards		(136	)		(161	)		(109	)
Repayment of finance lease obligations		(145	)		(253	)		(278	)
Net cash used in financing activities		(9,035	)		(8,117	)		(10,227	)
Effect of exchange rate changes on cash and cash equivalents		-			(21	)		48
Change in cash and cash equivalents		1,726			(12,856	)		(9,218	)
Cash and cash equivalents - beginning of year		39,551			52,407			61,625
Cash and cash equivalents - end of year	$	41,277		$	39,551		$	52,407

The accompanying notes to consolidated financial statements are an integral part of these statements.

Consolidated Statements of Stockholders’ Equity

Bassett Furniture Industries, Incorporated and Subsidiaries

For the years ended November 29, 2025, November 30, 2024, and November 25, 2023

(In thousands, except share and per share data)

													Accumulated
							Additional						other
	Common Stock						paid-in			Retained			comprehensive
	Shares			Amount			capital			earnings			income (loss)			Total

Balance, November 26, 2022		8,951,839		$	44,759		$	-		$	150,800		$	50		$	195,609

Comprehensive income (loss)
Net loss		-			-			-			(3,171	)		-			(3,171	)
Foreign currency translation adjustments, net of tax		-			-			-			-			(282	)		(282	)
Amortization of defined benefit plan costs, net of tax		-			-			-			-			68			68
Actuarial adjustments to defined benefit plans, net of tax		-			-			-			-			316			316
Regular dividends ($0.68 per share)		-			-			-			(5,982	)		-			(5,982	)
Issuance of common stock		74,421			373			(55	)		-			-			318
Purchase and retirement of common stock		(258,039	)		(1,290	)		(701	)		(2,293	)		-			(4,284	)
Stock-based compensation		-			-			849			-			-			849

Balance, November 25, 2023		8,768,221			43,842			93			139,354			152			183,441

Comprehensive income (loss)
Net loss		-			-			-			(9,695	)		-			(9,695	)
Foreign currency translation adjustments, net of tax		-			-			-			-			486			486
Amortization of defined benefit plan costs, net of tax		-			-			-			-			29			29
Actuarial adjustments to defined benefit plans, net of tax		-			-			-			-			126			126
Regular dividends ($0.76 per share)		-			-			-			(6,654	)		-			(6,654	)
Issuance of common stock		79,490			397			(26	)		-			-			371
Purchase and retirement of common stock		(111,665	)		(558	)		(865	)		(158	)		-			(1,581	)
Stock-based compensation		-			-			804			-			-			804


Balance, November 30, 2024		8,736,046			43,681			6			122,847			793			167,327

Comprehensive income (loss)
Net income		-			-			-			6,100			-			6,100
Amortization of defined benefit plan costs, net of tax		-			-			-			-			(48	)		(48	)
Actuarial adjustments to defined benefit plans, net of tax		-			-			-			-			(22	)		(22	)
Regular dividends ($0.80 per share)		-			-			-			(6,939	)		-			(6,939	)
Issuance of common stock		66,964			335			-			-			-			335
Purchase and retirement of common stock		(151,956	)		(760	)		(645	)		(880	)		-			(2,285	)
Stock-based compensation		-			-			639			-			-			639

Balance, November 29, 2025		8,651,054		$	43,256		$	-		$	121,128		$	723		$	165,107

The accompanying notes to consolidated financial statements are an integral part of these statements.

1.	Description of Business

Bassett Furniture Industries, Incorporated (together with its consolidated subsidiaries, “Bassett”, “we”, “our”, the “Company”) based in Bassett, Virginia, is a leading manufacturer, marketer and retailer of branded home furnishings. Bassett’s full range of furniture products and accessories, designed to provide quality, style and value, are sold through an exclusive nation-wide network of 86 retail stores known as Bassett Home Furnishings (referred to as “BHF”). Of the 86 stores, the Company owns and operates 57 stores (“Company-owned retail stores”) with the other 29 being independently owned (“licensee operated”). We also distribute our products through other multi-line furniture stores, many of which feature Bassett galleries or design centers. Products can also be purchased by the end consumer directly from our website.

In 2025 we sourced approximately 23% of our wholesale products from various foreign countries, with the remaining volume produced at our five domestic manufacturing facilities.

2.	Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Our fiscal year ends on the last Saturday in November, which periodically results in a 53-week year. Fiscal 2025 and 2023 each contained 52 weeks while fiscal 2024 contained 53 weeks. The Consolidated Financial Statements include the accounts of Bassett Furniture Industries, Incorporated and our subsidiaries, all of which are wholly owned.. All significant intercompany balances and transactions are eliminated in consolidation. The financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP"). Unless otherwise indicated, references in the Consolidated Financial Statements to fiscal 2025, 2024 and 2023 are to Bassett's fiscal years ended November 29, 2025, November 30, 2024 and November 25, 2023, respectively. References to the “ASC” included hereinafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board as the source of authoritative GAAP.

We analyzed our licensees under the requirements for variable interest entities (“VIEs”). All of these licensees operate as BHF stores and are furniture retailers. We sell furniture to these licensees, and in some cases have acted as a sublessor and made lease guarantees. We have recorded reserves for potential exposures related to these licensees. See Note 15 for disclosure of leases and lease guarantees. Based on financial projections and best available information, all licensees have sufficient equity to carry out their principal operating activities without subordinated financial support. Furthermore, we believe that the power to direct the activities that most significantly impact the licensees’ operating performance continues to lie with the ownership of the licensee dealers. Our rights to assume control over or otherwise influence the licensees’ significant activities only exist pursuant to our license and security agreements and are in the nature of protective rights as contemplated under ASC Topic 810. We completed our assessment for other potential VIEs and concluded that there were none. We will continue to reassess the status of potential VIEs including when facts and circumstances surrounding each potential VIE change.

On September 2, 2022, we acquired 100% of the capital stock of 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. Since acquisition, Noa Home was consolidated as a wholly-owned subsidiary. During the second quarter of fiscal 2024 we concluded that Noa Home was not likely to achieve profitability in the foreseeable future and decided to cease operations and sell the remaining inventory in an orderly manner. As of November 30, 2024 we had substantially completed the liquidation of Noa Home’s assets and liabilities.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Some of the more significant estimates include allowances for credit losses, calculation of inventory reserves, the valuation of our reporting units for the purpose of testing the carrying value of goodwill, and the valuation of our right of use assets. We also utilize estimates in determining the valuation of income tax reserves, insurance reserves, and assumptions related to our post-employment benefit obligations. Actual results could differ from those estimates.

Revenue Recognition

ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration the company expects to receive in exchange for those goods or services. For our wholesale and retail segments, revenue is recognized at a point in time when the risks and rewards of ownership and title to the product have transferred to the buyer.

At wholesale, transfer occurs and revenue is recognized upon the shipment of goods to independent dealers and licensee-owned BHF stores. We offer payment terms varying from 30 to 60 days for licensees and wholesale customers. Estimates for returns and allowances have been recorded as a reduction of revenue based on our historical return patterns. Our accounts receivable, net, which are associated with our wholesale segment, were $14,410, $13,181 and $13,736 at November 29, 2025, November 30, 2024 and November 25, 2023, respectively. The contracts with our licensee store owners do not provide for any royalty or license fee to be paid to us.

At retail, transfer occurs and revenue is recognized upon delivery of goods to the customer. We typically collect a significant portion of the purchase price as a customer deposit upon order, with the balance typically collected upon delivery. These deposits are carried on our balance sheet as a current liability until delivery is fulfilled and amounted to $24,969, $25,742 and $22,788 as of November 29, 2025, November 30, 2024 and November 25, 2023, respectively. Substantially all of the customer deposits held at November 30, 2024 related to performance obligations that were satisfied during fiscal 2025 and have therefore been recognized in revenue for the year ended November 29, 2025. Estimates for returns and allowances have been recorded 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, respectively, and is included with other accrued liabilities in the accompanying balance sheets. Some accessories sold to our retail customers are shipped directly to the customer by third-party vendors who have the responsibility for the performance obligation with respect to those items. Because we are acting in the capacity of an agent for the vendor in these sales, we recognize the revenue net of the cost paid to the vendor. We also sell furniture protection plans to our retail customers on behalf of a third party which is responsible for the performance obligations under the plans. Revenue from the sale of these plans is recognized upon delivery of the goods net of amounts payable to the third-party service provider.

Sales commissions are expensed as part of selling, general and administrative expenses at the time revenue is recognized because the amortization period would have been one year or less. Sales commissions at wholesale are accrued upon the shipment of goods. Sales commissions at retail are accrued at the time a sale is written (i.e. – when the customer’s order is placed) and are carried as prepaid commissions in other current assets until the goods are delivered and revenue is recognized. At November 29, 2025, November 30, 2024 and November 25, 2023, our balance of prepaid commissions included in other current assets was $2,662, $2,928 and $2,245, respectively.

For our accounting and reporting under ASC 606, we apply the following policy elections and practical expedients:

•

We exclude from revenue amounts collected from customers for sales tax.

•

We do not adjust the promised amount of consideration for the effects of a significant financing component since the period of time between transfer of our goods or services and the collection of consideration from the customer is less than one year.

•

We do not disclose the value of unsatisfied performance obligations because the transfer of goods or services is made within one year of the placement of customer orders.

See Note 19 for disaggregated revenue information.

Cash Equivalents and Short-Term Investments

The Company considers cash on hand, demand deposits in banks and all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. Substantially all of our cash and cash equivalents are in excess of federal deposit insurance limits. Our short-term investments consist of certificates of deposit that have original maturities of twelve months or less but greater than three months and all placed with federally insured financial institutions and are within federal deposit insurance limits.

Accounts Receivable

Substantially all of our trade accounts receivable is due from customers located within the United States. We maintain an allowance for credit losses for estimated losses resulting from the inability of our customers to make required payments. The allowance for credit losses is based on a review of specifically identified 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 collectability of accounts receivable within each pool based on historical experience, current payment practices and current economic trends. Actual credit losses could differ from those estimates. 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).

Concentrations of Credit Risk and Major Customers

Financial instruments that subject us to credit risk consist primarily of investments, accounts and financial guarantees. Investments are managed within established guidelines to mitigate risks. Accounts and notes receivable and financial guarantees subject us to credit risk partially due to the concentration of amounts due from and guaranteed on behalf of independent licensee customers. At November 29, 2025 and November 30, 2024, our aggregate exposure from receivables and guarantees related to customers consisted of the following:

	2025		2024
Accounts receivable, net of allowances (Note 4)	$	14,410	$	13,181
Contingent obligations under lease guarantees, less amounts recognized (Note 15)		4,118		5,100
Total credit risk exposure related to customers	$	18,528	$	18,281

At November 29, 2025 and November 30, 2024, approximately 41% and 43%, respectively, of the aggregate risk exposure, net of reserves, shown above was attributable to five customers. In fiscal 2025, 2024 and 2023, no customer accounted for more than 10% of total consolidated net sales.

We have no foreign manufacturing operations. We define export sales from our wholesale segment as sales to any country or territory other than the United States or its territories or possessions. Our wholesale export sales were approximately $334, $323, and $406 in fiscal 2025, 2024, and 2023, respectively. All of our export sales are invoiced and settled in U.S. dollars.

Inventories

Inventories (finished goods, work in process, raw materials and retail merchandise) accounted for under the first-in, first out (“FIFO”) method are stated at the lower of cost or net realizable value or, in the case of inventory accounted for under the last-in, first out (“LIFO”) method, at the lower of cost or market. Cost is determined for domestic manufactured furniture inventories using the LIFO method because we believe this methodology provides better matching of revenue and expenses. The cost of imported inventories as well as Lane Venture and Bassett Outdoor product inventories are determined on a first-in, first-out (“FIFO”) basis. Inventories accounted for under the LIFO method represented 46% and 50% of total inventory before reserves at November 29, 2025 and November 30, 2024, respectively. We estimate inventory reserves for excess quantities and obsolete items based on specific identification and historical write-offs, taking into account future demand and market conditions. If actual demand or market conditions in the future are less favorable than those estimated, additional inventory write-downs may be required.

Property and Equipment

Property and equipment is comprised of all land, buildings and leasehold improvements and machinery and equipment used in the manufacturing and warehousing of furniture, our Company-owned retail operations, our logistical services operations, and corporate administration. This property and equipment is stated at cost less accumulated depreciation. Depreciation is computed over the estimated useful lives of the respective assets utilizing the straight-line method. Buildings and improvements are generally depreciated over a period of 10 to 39 years. Machinery and equipment are generally depreciated over a period of 5 to 10 years. Leasehold improvements are amortized based on the underlying lease term, or the asset’s estimated useful life, whichever is shorter.

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 or 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.

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 (see Note 3), 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. See Note 7 for additional information regarding the results of our goodwill impairment test performed as of the beginning of the fourth quarter of fiscal 2023.

Leases

We account for leases in accordance with ASC Topic 842, Leases. The guidance requires lessees to recognize substantially all leases on their balance sheet as a right-of-use (“ROU”) asset and a lease liability.

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 local delivery trucks used in our retail segment. We determine if a contract contains a lease at inception based on our right to control the use of an identified asset and our right to obtain substantially all of the economic benefits from the use of that identified asset. Our real estate lease terms range from one to 15 years and generally have renewal options of between five and 15 years. We assess these options to determine if we are reasonably certain of exercising these options based on all relevant economic and financial factors. Any options that meet this criteria are included in the lease term at lease commencement.

Most of our leases do not have an interest rate implicit in the lease. As a result, for purposes of measuring our ROU asset and lease liability, we determine our incremental borrowing rate by applying a spread above the U.S. Treasury borrowing rates which we believe approximates the rate we would get if borrowing on a collateralized basis based on information available at the commencement date. In the case an interest rate is implicit in a lease we will use that rate as the discount rate for that lease. Some of our leases contain variable rent payments based on a Consumer Price Index or percentage of sales. Due to the variable nature of these costs, they are not included in the measurement of the ROU asset and lease liability.

We have made an accounting policy election to not recognize ROU assets and lease liabilities on the balance sheet for those leases with initial terms of one year or less and instead such lease obligations will be expensed on a straight-line basis over the lease term.

See Note 15 for additional information regarding our leases.

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 the second quarter of fiscal 2024, in conjunction with our decision to close Noa Home and cease operations by the end of fiscal 2024, we fully impaired the carrying value of the intangible asset for the Noa Home trade name.

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 and eventual disposition 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. Fair value is determined based on discounted cash flows or appraised values depending on the nature of the assets. The long-term nature of these assets requires the estimation of cash inflows and outflows several years into the future.

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. ROU assets under operating leases are written down to their estimated fair value. Our estimates of the fair value of the impaired ROU assets included 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 (see Note 3).

Income Taxes

We account for income taxes under the liability method which requires that we recognize deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Despite our belief that our liability for unrecognized tax benefits is adequate, it is often difficult to predict the final outcome or the timing of the resolution of any particular tax matters. We may adjust these liabilities as relevant circumstances evolve, such as guidance from the relevant tax authority or our tax advisors, or resolution of issues in the courts. These adjustments are recognized as a component of income tax expense in the period in which they are identified.

We evaluate our deferred income tax assets to determine if valuation allowances are required or should be adjusted. A valuation allowance is established against our deferred tax assets based on consideration of all available evidence, both positive and negative, using a “more likely than not” standard. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carryforward or carryback periods, our experience with tax attributes expiring unused and tax planning alternatives. In making such judgments, significant weight is given to evidence that can be objectively verified. See Note 13 for additional information regarding our income taxes.

Shipping and Handling Costs

Costs incurred to deliver wholesale merchandise to customers are recorded in selling, general and administrative expense and totaled $23,005, $22,721, and $26,125 for fiscal 2025, 2024 and 2023, respectively. Costs incurred to deliver retail merchandise to customers, including the cost of operating regional distribution warehouses, are also recorded in selling, general and administrative expense and totaled $20,317, $20,342, and $23,399 for fiscal 2025, 2024 and 2023, respectively.

Advertising

Costs incurred for producing and distributing advertising and advertising materials are expensed when incurred and are included in selling, general and administrative expenses. Advertising costs totaled $10,330, $13,256, and $19,106 in fiscal 2025, 2024, and 2023, respectively.

Insurance Reserves

We have self-funded insurance programs in place to cover workers’ compensation and health insurance. These insurance programs are subject to various stop-loss limitations. We accrue estimated losses using historical loss experience. Although we believe that the insurance reserves are adequate, the reserve estimates are based on historical experience, which may not be indicative of current and future losses. We adjust insurance reserves, as needed, in the event that future loss experience differs from historical loss patterns.

Supplemental Cash Flow Information

Refer to the supplemental lease disclosures in Note 15 for cash flow impacts of leasing transactions during fiscal 2025, 2024 and 2023. At November 29, 2025 and November 30, 2024, $34 and $273, respectively, of our fiscal 2025 and 2024 purchases of property and equipment were unpaid and included in accounts payable in the accompanying balance sheets. Otherwise, there were no material non-cash investing or financing activities during fiscal 2025, 2024 or 2023.

Interest paid during fiscal 2025, 2024 and 2023 was $36, $21 and $22, respectively.

See Note 13 for taxes paid net of refunds received.

BASSETT FURNITURE INDUSTRIES INC 10-K