Lower Q3 sales and deepening losses for Natuzzi

Worldwide
Published:  29 November, 2017

The luxury Italian furniture manufacturer’s consolidated net sales for the third quarter of 2017 stood at €95.8 million, down -6.1% from €102.0 million reported in the same period in 2016.

Natuzzi reported a quarterly net operating loss of €8.6 million versus net operating loss of €3.6 million in the third quarter of 2016. Net loss for the period was €10.9 million, from a net loss of €5.5 million in the same quarter of last year. In the first nine months of 2017, consolidated sales totalled €329.5 million, down -0.9% (2016: €332.6 million). The Group reported an operating loss of €21.6 million and a net loss of €25.6 million in the period.

The Group’s product range includes furnishings for living, dining and bed rooms with production both in its own factories and products that are purchased from suppliers. “As a result of the difficulties between procurement and production incurred by the end of the third quarter, our backlog of undelivered orders increased and, as a consequence, we are reporting disappointing quarterly results. We estimate that additional €11million could have been delivered with a positive additional contribution margin of about €4 million”, said Natuzzi in a statement adding that its overall business in the Asia-Pacific region “is constantly improving in volume and profitability”.

Its Softaly private label division recorded an order flow down -8.3% as of November 12, 2017 compared with the same period in 2016. In 2016, the Group started an “aggressive” build-up in the America retail organisation by making the investments in qualified retail and marketing people in order to leverage on the brand and support growth in the geographic area. Natuzzi says it is now focussing its efforts on reinforcing its sales organisation in some North European countries.

“Although the financial results for the quarter were disappointing, the operational results start improving and give us confidence in our future.  Our retail sales are growing, both through our expansion and organically in our existing stores.  Our numbers were damaged by the lack of proper coordination between procurement and production, a situation which we have fixed. Had we not had this issue, our revenues would have grown.  I am more convinced than ever that our strategy works and that Natuzzi will return to its place as the leading global high end branded lifestyle manufacturer in 2018”, said Pascale Natuzzi, Chairman and CEO.

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