Italian furniture manufacturer Natuzzi has reported a decline in second quarter sales and expects the rest of 2023 to remain challenging.
According to its unaudited financial information for the second quarter ended 30 June 2023, total sales fell 28.5% to €83.5m. Q2 branded invoiced sales, while being below Q2 2022, are up 4.7% against the same period in 2019.
Natuzzi saw an improved gross margin at 36.4% on revenue, compared to 31.4% in 2022. The increase in gross margin stems from the advantages gained through improved price discipline and better cost management, which have offset the negative impact of reduced sales volume on industrial production costs.
“In the second quarter of 2023, we achieved operating breakeven,” the group said. “This compares with an operating profit of €1.1m, from €116.9m sales in the 2Q of 2022, and an operating loss of €7.8m from €92.2m sales in the 2Q of 2019.
“In the current market context, cost and capital efficiency are crucial. We launched a set of initiatives to reduce costs and improve working capital discipline.
“We continue to expect the overall economy and the furnishing sector to remain challenging throughout the rest of 2023 and the beginning of next year, with a potential negative impact on our business. We remain confident in the strength of our brands and in the company’s long-term growth plan.”
As for the first half of 2023, total revenue resulted at €169.6m, a decrease of 28% compared to first half of 2022, while also posting a loss for the period of €3.7m.
Pasquale Natuzzi, Chairman of the Group, added: “Our industry globally continues to be negatively affected by consumers’ decision to postpone their purchasing, as a result of eroding spending power and shift of spending in favour of travelling and dining out.
“Real estate, which is a primary driver for the furnishing market, has been negatively affected by high interest rates. This has been one of the main causes of the weak store traffic we have been witnessing for more than 15 months.
“I feel reassured by the work our Group is doing to weather this adverse market conditions, both on the commercial front, where we have launched multiple initiatives to regain growth, and on cost/efficiency front, where our team has intensified the effort to mitigate the impact on our P&L of this negative sales trend.
“Our Group also worked on the innovation process with the objective of having “fewer and bolder” innovations, that are brought to the market according to a new global launch process, which leverages some of the best practices of the automotive and high-tech industry.”
