Natuzzi, a prominent Italian furniture brand, reported its unaudited financial results for the first quarter of 2024, highlighting several key developments and challenges. Despite challenging market conditions and cautious consumer behaviour influenced by persistent high interest rates, the company achieved an overall invoiced sales of €84.5 million, which remained consistent with the previous year's activity.
Notably, sales from directly operated stores (DOS) saw a significant increase, amounting to €20.5 million, marking a 13.6% growth from Q1 2023 and a 10.0% increase from Q1 2022. This growth underscores Natuzzi's strategic emphasis on bolstering its retail presence, particularly in North America, where DOS sales surged by 29.8% year-on-year, highlighting regional retail expansion efforts, especially for Natuzzi Italia.
Photo: Natuzzi
The company reported an improved gross margin of 36.9% for Q1 2024, up from 35.6% in Q1 2023 and continuing its recovery from the pre-COVID level of 30.1% in Q1 2019. Operating profit also showed positive momentum, reaching €0.6 million compared to an operating loss in the same period last year.
Natuzzi continued its restructuring initiatives, reducing headcount by 94 employees in Q1 2024, reflecting an 18% reduction compared to 2021, aimed at enhancing competitiveness and margin generation. The company invested €1.6 million in capital expenditures, focusing on upgrading its Italian factories and expanding DOS in the US.
Despite these advancements, the challenging market environment delayed the full impact of retail expansions. The company has set its sights on expansion into the German market as one of its key objectives. Focusing primarily on the UK, Italy, and Spain, the team will also be re-establishing our presence in markets like Germany, where Natuzzi previously saw substantial growth. Recently, the company finalised a deal with KHG Group to launch an initial phase comprising at least 22 galleries in the near future.
Looking ahead, Natuzzi remains committed to modernising its factories, optimising resources, and pursuing strategic divestments to support its retail expansion and restructuring efforts, ensuring sustained growth and profitability amid ongoing market uncertainties.
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.'
More information:
Natuzzi
www.natuzzi.com