BASSETT FURNITURE INDUSTRIES INC
For the period ended Feb 28, 2026. Filed Apr 1, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Feb 28, 2026 · Filed Apr 1, 2026
BSET$21.76-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-08-30; filed 2025-10-08.
0001437749-25-030703
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-02-28; filed 2026-04-01.
0001437749-26-010901
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 78 current paragraphs.
36 unchanged; 23 reworded; 19 added; 29 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 34 previous and 29 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
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We introduced a new web platform late in 2023 that leverages world class features including enhanced customer research capabilities and streamlined navigation. Since the debut of the new site, we have seen increased engagement with the brand through a greater number of page views per customer along with more time spent on the site. We have also seen an increase in average order value that has resulted in increased e-commerce revenue. Building on the 25% increase in web sales for fiscal 2025, written sales orders for the web increased 28% for the quarter while delivered sales increased 46%. Although e-commerce sales continue to be small relative to in-store sales, we will continue to invest in ongoing improvements to the aesthetics and user experience on our website while not compromising on our in-store experience or the quality of our in-home makeover capabilities.
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Total sales revenue for the three months ended February 28, 2026 decreased $1,822 or 2.2% from the prior year period primarily due to the impact of widespread winter weather disruptions in late January on store operations and retail and wholesale logistics. This consisted of a $749 or 1.4% decrease in retail sales from our Company-owned stores and a $1,073 or 3.7% decrease in sales to external wholesale customers.
Current report
Gross margins for the three months ended February 28, 2026 decreased 80 basis points from the prior year period primarily due to lower margins in both the wholesale and retail business.
Current report
Refer to the following discussions of quarterly results by segment for additional details.
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Net sales for the three months ended February 28, 2026 increased $34 or 0.1% over the prior year, consisting of a 0.6% increase in shipments to our retail store network and a 2.6% increase in Lane Venture shipments to wholesale customers partially offset by a 5.3% decrease in shipments to the open market. As previously mentioned, we introduced the Lane Venture brand in the Bassett Home Furnishings stores during the first quarter of 2026 and have included those shipments in the above change in shipments to the retail store network. Including those shipments in the total Lane Venture brand, shipments of that brand increased 32%. Shipments were negatively impacted by winter weather as our major distribution centers were closed for multiple days during the quarter. Gross margins for the three months ended February 28, 2026 decreased 50 basis points from the prior year period as margin decreases in the Bassett Custom Upholstery operations due to reduced leverage on fixed costs were partially offset by improved margins in the Bassett Casegoods operations due to improved pricing strategies. SG&A expenses as a percentage of sales were essentially flat compared with the prior year period.
Current report
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During the three months ended February 28, 2026, we incurred $95 of new store pre-opening costs associated with new stores in the Cincinnati, Ohio and Orlando, Florida markets, expected to open by the end of the second and third quarters of fiscal 2026, respectively. Prior to opening a new store we incur such expenses as rent, training costs and other payroll-related costs. These costs generally range between $200 to $400 per store depending on the overall rent costs for the location and the period between the time when we take physical possession of the store space and the time of the store opening. Generally, rent payments during a buildout period between delivery of possession and opening of a new store are deferred and therefore straight-line rent expense recognized during that time does not require cash. Inherent in our retail business model, we also incur losses in the two to three months of operation following a new store opening. Like other furniture retailers, we do not recognize a sale until the furniture is delivered to our customer. Because our retail business model does not involve maintaining a stock of retail inventory that would result in quick delivery and because of the custom nature of many of our furniture offerings, delivery to our customers usually occurs about 30 to 45 days after an order is placed. We generally require a deposit at the time of order and collect the remaining balance when the furniture is delivered, at which time the sale is recognized. Coupled with the previously discussed store pre-opening costs, total start-up losses can range from $400 to $600 per store. We generally expect that new stores will operate at or above a retail break-even level within a reasonable period of time following store opening. Factors affecting the length of time required to achieve this goal on a store-by-store basis may include the level of brand recognition, the degree of local competition and the depth of penetration in a particular market. Even as new stores ramp up to break even, we do realize additional wholesale sales volume that leverages the fixed costs in our wholesale business.
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SG&A expenses included in Corporate and other decreased $108 or 1.7% from the prior year primarily due to decreased corporate overhead spending from better expense management.
Current report
Interest income for the three months ended February 28, 2026 and March 1, 2025 was $553 and $559, respectively, a decrease of $6. Lower interest income on CDs and interest-bearing cash equivalents was largely offset by $99 of interest received as a Federal income tax refund during the first quarter of fiscal 2026.
Current report
Other Loss, Net
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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 $7,010 at February 28, 2026, the current portion of which is $815. We also have deferred compensation plans with a total liability of $5,764 at February 28, 2026, the current portion of which is $330. See Note 9 to our condensed consolidated financial statements for additional information regarding these plans.
Removed paragraphs (29)
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Our fiscal year, which ends on the last Saturday of November, periodically results in a 53-week year instead of the normal 52 weeks. The prior fiscal year ending November 30, 2024 was a 53-week year, with the additional week being included in the first fiscal quarter. Accordingly, the information presented below includes 39 weeks of operations for the nine months ended August 30, 2025 as compared to 40 weeks included in the nine months ended August 31, 2024.
Previous report
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 November 30, 2024, we had substantially completed the liquidation of Noa Home’s assets and liabilities.
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Total sales revenue for the three months ended August 30, 2025 increased $4,484 or 5.9% over the prior year period. This consisted of a $4,635 or 9.8% increase in retail sales from our Company-owned stores and an $837 or 3.1% increase in sales to external wholesale customers, partially offset by a $988 decline in sales by Noa Home, which was closed during the second half of fiscal 2024.
Previous report
Gross margins for the three months ended August 30, 2025 increased 320 basis points over the prior year period primarily due to margin improvements at wholesale partially offset by a slight decrease in retail margins from our Company-owned stores. In addition, the wholesale gross margin in the prior year period was negatively impacted by $609 of unproductive labor costs incurred during the temporary shutdown resulting from the cybersecurity incident that occurred during the third quarter of fiscal 2024.
Previous report
Analysis of Year-to-Date Results:
Previous report
Total sales revenue for the nine months ended August 30, 2025 increased $1,030 or 0.4% over the prior year period. Normalizing for the additional week in the first nine months of 2024, consolidated sales increased 3.0% which included a 7.9% increase in retail sales, partially offset by a 0.8% decrease in sales to external wholesale customers and a $3,934 decline due to the closure of Noa Home during the second half of 2024.
Previous report
Gross margins for the nine months ended August 30, 2025 increased 270 basis points over the prior year period. 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 the temporary shutdown resulting from the cybersecurity incident. Excluding the above-mentioned additional inventory valuation charges and unproductive labor costs in 2024, gross margins would have increased 130 basis points primarily due to improved margins in the wholesale segment.
Previous report
Selling, general and administrative (“SG&A”) expenses as a percentage of sales for the nine months ended August 30, 2025 decreased 390 basis points from 2024 primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024 coupled with on-going cost containment activities.
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Net sales for the three months ended August 30, 2025 increased $2,959 or 6.2% over the prior year, consisting of a 9.2% increase in shipments to our retail store network, a 0.8% increase in shipments to the open market, and a 9.6% increase in Lane Venture shipments. Gross margins for the three months ended August 30, 2025 increased 440 basis points over the prior year period. Excluding the $609 of unproductive labor costs incurred during the temporary shutdown resulting from the cybersecurity incident in the prior year period, gross margins would have increased by 310 basis points. This margin increase was driven by 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 210 basis points primarily due 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.
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Analysis of Year-to-Date Results–* Wholesale*
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Net sales for the nine months ended August 30, 2025 increased $2,805 or 1.8% over the prior year. Normalizing for the additional week in the first nine months of 2024, net sales increased 4.4%, consisting of a 9.1% increase in shipments to our retail store network, partially offset by a 1.5% decrease in shipments to the open market and a 3.4% decrease in Lane Venture shipments. Gross margins for the nine months ended August 30, 2025 increased 310 basis points over the prior year. Excluding the $1,729 of increased inventory valuation charges in 2024 and $609 of unproductive labor costs incurred during the temporary shutdown resulting from the cybersecurity incident in 2024, gross margins would have increased by 160 basis points due primarily to improved margins in our Bassett Custom Upholstery business from manufacturing efficiency gains, increased margins in our Lane Venture operations due to improved customer mix and improved margins in the Bassett Leather business, and improved pricing strategies in the remaining wood and upholstery operations, partially offset by the prior year including a reduction in the warranty and returns reserve from improved experience in warranty and returns claims and improved administration of those claims. SG&A expenses as a percentage of sales decreased 180 basis points primarily due to lower bad debt costs coupled with the benefit of cost reductions implemented during the second half of fiscal 2024.
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Analysis of Year-to-Date Results–* Retail*
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Net sales for the nine months ended August 30, 2025 increased $7,939 or 5.2% over the prior year period. Normalizing for the additional week in the first nine months of 2024, net sales increased by 7.9%. Written sales (the value of sales orders taken but not delivered) declined 0.2% from the prior year period. Normalizing for the additional week in the first nine months of 2024, written sales increased 2.3%. Gross margin for the nine months ended August 30, 2025 declined 70 basis points over the prior period. 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. SG&A expenses as a percentage of sales for the nine months ended August 30, 2025 decreased 510 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.
Previous report
Sales and gross profit declined from the prior year period due to the closure and liquidation of Noa Home during fiscal 2024. The $28 and $3,029 decrease in SG&A expenses for the three and nine months ended August 30, 2025, respectively, was primarily due to 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.
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Interest income for the three and nine months ended August 30, 2025 was $472 and $1,552, respectively, compared to $692 and $2,075, respectively, for the three and nine months ended August 31, 2024. The decline from the prior year period is primarily due to lower balances of interest-bearing cash and cash equivalents, as well as lower average rates earned on our cash and cash equivalents and investments in CDs compared to the preceding year.
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Other Income (Loss), Net
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In July of 2025, new tax legislation was enacted under the One Big Beautiful Bill Act (the “Act”). While the Act includes a wide range of provisions that could impact our financial results in future periods, we do not expect the passage of the Act to have a material impact on our results of operations or financial condition in the current fiscal year.
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Investment in Retail Real Estate
Previous report
We have a substantial investment in real estate acquired for use as retail locations and occupied by Company-owned retail stores. Such real estate is included in property and equipment, net, in the accompanying condensed consolidated balance sheet and consists of eight properties with an aggregate square footage of 203,465 and a net book value of $23,680 at August 30, 2025.
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Previous wording
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.
Current wording
Bassett is a leading retailer, manufacturer and marketer of branded home furnishings. We were founded in 1902 and incorporated under the laws of Virginia in 1930. Our rich 124-year history has instilled the principles of quality, value, and integrity in everything we do, while simultaneously providing us with the expertise to respond to ever-changing consumer tastes and meet the demands of a global economy.
Previous wording
Approximately 60% of our wholesale sales arise from our network of 87 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.
Current wording
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.
Previous wording
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.
Current wording
Bassett also has a significant traditional wholesale business with more than 1,000 open market accounts. Most of the open market sales are through Bassett Design Centers and Bassett Custom Studios which function as a store within a multi-line store featuring the Company’s custom furniture capabilities. The wholesale business, including the Lane Venture outdoor brand, also services general furniture stores and a growing number of interior design firms through a network of over 30 independent sales representatives who have stated geographical territories. These sales representatives are compensated based on a standard commission rate. The Lane Venture outdoor brand was recently introduced in the Bassett Home Furnishings stores representing a new outlet for that brand.
Previous wording
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 introduced a new web platform late in 2023 that leverages world class features including enhanced customer research capabilities and streamlined navigation. 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. Although e-commerce sales continue to be small in relation to in-store sales, we are pleased that we have seen a greater than 30% e-commerce sales increase for the nine months ended August 30, 2025 as compared to the same period of 2024. We will continue to invest in ongoing improvements to the aesthetics and user experience that we provide on our website.
Current wording
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.
Previous wording
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 own a facility in Haleyville, Alabama where we manufacture aluminum frames for our outdoor furniture.
Current wording
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.
Previous wording
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. Approximately 80% 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.
Current wording
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.
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Results of Operations–** Periods ended August 30, 2025 compared with the periods ended August 31, 2024:**
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Results of Operations–** Period ended February 28, 2026 compared with the period ended March 1, 2025:**
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Consolidated results of operations for the three and nine months ended August 30, 2025 and August 31, 2024 are as follows:
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Consolidated results of operations for the three months ended February 28, 2026 and March 1, 2025 are as follows:
Previous wording
Selling, general and administrative (“SG&A”) expenses as a percentage of sales for the three months ended August 30, 2025 decreased 440 basis points from 2024 primarily due to the benefit of cost reductions implemented during the second half of fiscal 2024, on-going cost containment activities and greater leverage of fixed costs due to higher sales levels.
Current wording
Selling, general and administrative (“SG&A”) expenses (excluding new store pre-opening costs) as a percentage of sales for the three months ended February 28, 2026 increased 70 basis points from 2025 reflecting reduced leverage of fixed costs due to lower sales levels.
Previous wording
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 three and nine months ended August 31, 2024, the only such operating segment included in Corporate and other is Noa Home, which was acquired on September 2, 2022, subsequently closed during fiscal 2024 and substantially liquidated as of November 30, 2024. All sales reported in our Corporate and other category during fiscal 2024 were attributable to Noa Home, which generated substantially all of its sales outside of the United States.
Current wording
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 three months ended February 28, 2026 and March 1, 2025, Corporate and other included no other operating segments.
Previous wording
Results for the wholesale segment for the three and nine months ended August 30, 2025 and August 31, 2024 are as follows:
Current wording
Results for the wholesale segment for the three months ended February 28, 2026 and March 1, 2025 are as follows:
Previous wording
Wholesale backlog at August 30, 2025 was $16,596 as compared to $21,750 at November 30, 2024 and $18,481 at August 31, 2024.
Current wording
Wholesale backlog at February 28, 2026 was $16,745 as compared to $19,519 at November 29, 2025 and $19,515 at March 1, 2025.
Previous wording
Net sales for the three months ended August 30, 2025 increased $4,635 or 9.8% over the prior year period. Written sales (the value of sales orders taken but not delivered) increased 2.4% from the third quarter of 2024. Gross margin for the three months ended August 30, 2025 declined 40 basis points from the prior period 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. SG&A expenses as a percentage of sales for the three months ended August 30, 2025 decreased 590 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.
Current wording
Net sales for the three months ended February 28, 2026 decreased $749 or 1.4% from the prior year period due primarily to the previously mentioned winter weather disruptions during the last two weeks of January. Written sales (the value of sales orders taken but not delivered) decreased 0.2% from the first quarter of 2025. Gross margin for the three months ended February 28, 2026 declined 170 basis points from the prior period primarily due to lower margins on in-line goods as we did not institute a price increase related to the increased tariff costs until mid-January of 2026. SG&A expenses (excluding new store pre-opening costs) as a percentage of sales for the three months ended February 28, 2026 were unchanged from the prior year period as reduced leverage of fixed costs due to lower sales levels was substantially offset by improved efficiency in the warehouse and delivery operation.
Previous wording
Retail backlog at August 30, 2025 was $32,206 compared to $37,053 at November 30, 2024 and $33,251 at August 31, 2024.
Current wording
Retail backlog at February 28, 2026 was $34,247 compared to $34,402 at November 29, 2025 and $36,143 at March 1, 2025.
Previous wording
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, prior to fiscal 2025, Noa Home was included within the Corporate and other reconciling category and accounted for all of the sales and gross profit within this reconciling category. Revenues, costs and expenses of Corporate and other for the periods ended August 30, 2025 and August 31, 2024 are as follows:
Current wording
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. SG&A expenses of Corporate and other for the periods ended February 28, 2026 and March 1, 2025 are as follows:
Previous wording
Other income (loss), net, for the three and nine months ended August 30, 2025 was $30 and $(851), respectively, compared to $(109) and $(489), respectively, for the three and nine months ended August 31, 2024. The net change from the prior year quarter and year to date was primarily due to changes in the net costs associated with Company-owned life insurance compared to the prior year periods.
Current wording
Other loss, net, for the three months ended February 28, 2026 and March 1, 2025 was $192 and $459, respectively, a decline of $267 from the prior year period. The net change from the prior year quarter and year to date was primarily due to lower net costs associated with Company-owned life insurance partially offset by increased interest expense from finance leases compared to the prior year period.
Previous wording
Our effective tax rate was 26.8% and 26.8% for the three and nine months ended August 30, 2025, respectively. The effective rates for the three and nine months ended August 30, 2025 differ from the federal statutory rate of 21% primarily due to the effects of state income taxes and various permanent differences.
Current wording
Our effective tax rate was 26.5% for the three months ended February 28, 2026. The effective rate differs from the federal statutory rate of 21% primarily due to the effects of state income taxes and various permanent differences.
Previous wording
Our effective tax rate was 22.0% and 17.3% for the three and nine months ended August 31, 2024, respectively. The effective rates for the three and nine months ended August 31, 2024 differ from the federal statutory rate of 21% primarily due to increases in the valuation allowance placed on deferred tax assets associated with Noa Home, the effects of state income taxes and various permanent differences.
Current wording
Our effective tax rate was 27.4% for the three months ended March 1, 2025. The effective rate differs from the federal statutory rate of 21% primarily due to the effects of state income taxes and various permanent differences.
Previous wording
Cash provided by operating activities for the first nine months of fiscal 2025 was $5,726 compared to cash used in operations of $2,323 for the first nine months of fiscal 2024, representing an improvement of $8,049 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 nine months of 2024, partially offset by a planned increase in inventory levels.
Current wording
Cash used in operating activities for the first three months of fiscal 2026 was $5,468 compared to cash used in operations of $52 for the first three months of fiscal 2025, representing a decline of $5,416 in cash flows from operations. This decrease was primarily the result of lower income levels and negative changes in working capital which had been expected.
Previous wording
Our overall cash position declined $5,138 during the first nine months of 2025. During the first nine months of fiscal 2025, we spent $3,737 on purchases of property and equipment. We also paid $5,210 in dividends during the first nine months of 2025. We repurchased $1,522 of shares under our stock repurchase program during the first nine months of 2025 compared to repurchases of $1,127 in the prior year period. We expect capital expenditures for the full year to range from $5 million to $7 million. As of August 30, 2025, $18,882 remains available for future purchases under our stock repurchase plan. With cash and cash equivalents and short-term investments totaling $54,634 on hand at August 30, 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.
Current wording
Our overall cash position declined $8,288 during the first three months of 2026. During the first three months of fiscal 2026, we spent $863 on purchases of property and equipment. We also paid $1,730 in dividends during the first three months of 2026. We repurchased $147 of shares under our stock repurchase program during the first three months of 2026 compared to repurchases of $721 in the prior year period. We expect capital expenditures for the full year to range from $8 million to $12 million. As of February 28, 2026, $18,106 remains available for future purchases under our stock repurchase plan. With cash and cash equivalents and short-term investments totaling $50,952 on hand at February 28, 2026, 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.
Previous wording
On May 15, 2024, we entered into the Credit Facility with our bank. This Credit Facility provides for a line of credit of up to $25,000. At August 30, 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 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:
Current wording
On May 15, 2024, we entered into the Credit Facility with our bank. This Credit Facility provides for a line of credit of up to $25,000. At February 28, 2026, we had $5,866 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 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:
Previous wording
Since our used commitment was less than $8,250 at August 30, 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. Our availability under the Credit Facility is currently $16,818.
Current wording
At February 28, 2026, we were in compliance with the Consolidated Minimum Tangible Net Worth requirement. Since our used commitment was less than $8,250 at February 28, 2026, 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. Our availability under the Credit Facility is currently $19,134. On January 9, 2026, the Credit Facility was amended to extend the expiration date to January 31, 2029.
Previous wording
We lease land and buildings that are used in the operation of our Company-owned retail stores as well as in the operation of one of our licensee-owned stores, and we lease land and buildings used in our wholesale manufacturing operations. We also lease certain personal property such as lift trucks, office equipment and local delivery trucks. The present value of our obligations for leases with terms in excess of one year at August 30, 2025 is $93,300 and is included in our accompanying condensed consolidated balance sheet at August 30, 2025. We were contingently liable under licensee lease obligation guarantees in the amount of $4,393 at August 30, 2025. The remaining terms under these lease guarantees extend for six years. See Note 11 to our condensed consolidated financial statements for additional details regarding our lease guarantees.
Current wording
We lease land and buildings that are used in the operation of our Company-owned retail stores as well as in the operation of one of our licensee-owned stores, and we lease land and buildings used in our wholesale manufacturing operations. We also lease certain personal property such as lift trucks, office equipment and local delivery trucks. The present value of our obligations for leases with terms in excess of one year at February 28, 2026 is $85,791 and is included in our accompanying condensed consolidated balance sheet at February 28, 2026. We were contingently liable under licensee lease obligation guarantees in the amount of $3,902 at February 28, 2026. The remaining terms under these lease guarantees extend for six years. See Note 10 to our condensed consolidated financial statements for additional details regarding our lease guarantees.