Q1 sales down at Natuzzi; plans German expansion

Italian furniture manufacturer Natuzzi has reported a decline in first quarter sales while revealing plans to expand in Europe.

According to its Q1 results ended 31 March 2024, total sales amounted to €84.5m, down from €86.1m in 2023, but were ‘substantially in line with the level of activity of last year’.

“1Q 2024 continued to be affected by the persisting macroeconomic and industry-specific challenges, resulting in a reduced consumers’ spending capacity and postponement of durable purchases,” Natuzzi said.

Natuzzi Italia invoiced sales amounted to €29.5m, compared to €31.6m in 1Q 2023. Natuzzi Editions invoiced sales (including invoiced sales from Divani&Divani by Natuzzi) amounted to €46.5m, compared to €45.9m in 1Q 2023.

In Europe, the company added: “While concentrating on our three largest markets (UK, Italy and Spain), we are also reintroducing ourselves to markets such as Germany, where the Company previously experienced significant growth.

“We have recently signed an agreement with KHG Group for a first wave of at least 22 galleries that will be opened in the next future.”

During the period, Natuzzi continued its restructuring with a reduction of 94 staff as part of its long-term transformation process to ‘increase competitiveness and enhance margin generation’.

“We continue to execute the staff restructuring, in compliance with our ethics standards and with the labour regulations of the different markets which are particularly restrictive in some geographic areas in which we operate, chiefly in Italy,” the group added.

During period, Natuzzi had a gross margin of 36.9%, compared to 35.6% in 2023, for a total improvement of 1.4 p.p. Pre-tax losses amounted to €1.8m, narrowing for a loss of €3.2m

“The increase in gross margin was primarily driven by enhanced efficiency in material consumption during the manufacturing process, successful renegotiation of supplier terms, and a general decline in raw material costs,” the company said. “Additionally, we benefited from reduced industrial costs, improved channel mix, and disciplined cost control measures.”

Pasquale Natuzzi, Chairman of the Group, commented, “Our business is still confronting difficult market conditions alongside cautious customer behaviour. 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. We continue investing in the quality of our collections, in coherence with the DNA of our Brand, that blends design, functions, materials and colors to create harmonious living.

“The recent endorsement of our CEO and Board of Directors provides the competences and stability needed to navigate these challenging times. I am confident that our combined efforts will drive us towards achieving our mid-term growth objectives and enhancing the efficiency of our operating model.”

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