Natuzzi returns to profitability in Q1, with strong showing for retail

SANTERAMO IN COLLE, Bari, Italy – Luxury Italian furniture supplier and retailer Natuzzi reported €84.5 million in invoiced first quarter sales, just slightly lower than the €86.1 million reported the same time last year.

The company returned to profitability, recording a €600,000 gain compared with a €2.1 million loss last quarter and a €900,000 loss the same time last year. Gross margin improved slightly, growing to 36.9% from last year’s 35.6%. Gross margin has been consistently improving for the company since 2019.

The company continued with its long-term restructuring efforts, reducing headcount by 94 for the quarter “to increase competitiveness and enhance margin generation.” Its total headcount is now 18% lower than it was in 2021.

Retail is a continued focus, with sales climbing 13.6% from last year and 10% from 2022. In North America, directly-operated store sales grew 29.8% from last year.

The company’s branded invoiced sales amounted to €76 million, compared to €77.5 million last year. Unbranded sales came in at €6.4 million, a slight dip from last year’s €6.5 million.

Business is difficult, the company said.

“Our business is still confronting difficult market conditions alongside cautious customer behavior,” said Pasquale Natuzzi, chairman. “Persistent high interest rates are postponing the housing market recovery, which remains a primary driver for new demand of furnishing.

“In this market context, our team is efficiently allocating resources and tightly managing discretionary expenses. Our primary objective remains leveraging our brand strength to regain growth and execute our mid-term plan.”

That plan, encompassing eight key points, includes expanding margins and lowering break-even point; nurturing the strength of the brand; continuing with a retail first approach; upgrading and re-imagining a gallery program; developing new collections; focusing on core markets; modernizing factories and executing restructuring; and freeing up non-strategic resources to invest in retail and restructuring.

See also:

  • With Q4 sales down, Natuzzi keeps focus on branded business, restructuring
  • Natuzzi adds context to its building sale; affirms wholesale business still key

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