Natuzzi’s net sales down 22.4% in first quarter

Worldwide
Published:  02 July, 2020

The premium leather furniture manufacturer said its net sales for the first quarter of the year were greatly affected by the Covid-19 pandemic.

Natuzzi’s consolidated net sales for the first quarter of 2020 totalled €82.5 million, down 22.4% from €106.2 million recorded in the same quarter of 2019. Considering the Group’s core business only (upholstery, accessories and home furnishings), net sales were €78.5 million, down 22.4% year-on-year, due to a 43.7% decrease in Private Label sales and a 15.9% decrease in Natuzzi sales. Other sales were €4 million. According to the manufacturer, the 15.9% decrease in Natuzzi branded revenues was the result of a 22.8% decrease in the Americas, a 12.2% decrease in the EMEAI and a 11.2% decrease in the Asia-Pacific region. Consolidated gross margin was 34.2% in the quarter, up 30.1%, attributed to a favourable trend in raw material prices, a better sales mix, notwithstanding decreasing sales. The Group reported an operating loss of €4.9 million, compared with an operating loss of €3 million in the same quarter of the previous year. Loss for the period was €7.8 million.

Natuzzi said its Chinese plant, located in Shanghai and currently serving the North American and Asian market, was closed for safety-related reasons for two weeks due to the Covid-19 pandemic, in addition to the Chinese New Year holiday period, with points of sale in China also closed during the same period. Operations in China started to gradually resume only at the end of February. In March, the lockdown measures introduced in most of the countries in which the Group operates led to a significant reduction in the Group’s and its customers’ activities. “While the Chinese economy has been the first to emerge from the sanitary crisis, emergency still persists in areas such as the Americas, whereas in Europe virus containment measures that were adopted locally by different governments have started to be eased only from the beginning of May”, said Natuzzi, adding that as a result of the Covid-19 outbreak, it “remains strongly focussed on minimising cash outlays, including, among others, managing workforce costs, delaying capital expenditures and reducing discretionary expenses”.