Natuzzi Posts Sales Gain, Higher Loss

November 19, 2008  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on November 2008 Natuzzi announced Wednesday that it increased units sold by 3.8 percent in the company’s third quarter, with sales increasing by about 1 million euros to 142.3 million euros, but had an operating loss of 12.2 million euros due to unfavorable exchange rates and high operating costs. The company posted an operating loss of 11 million euros in the third quarter of 2007.

For the first nine months of the year (through Sept. 30) Natuzzi’s sales increased 5.8 percent to 483.9 million euros, with an operating loss of 29.5 million euros. New CEO Aldo Uva, who was appointed in June, recently unveiled a business plan that calls for Natuzzi to achieve sales of 1 billion euros within three years by focusing on fast-growing markets and making changes such as building a factory in North America.

“Despite the 5.8 percent growth of our net sales reported in the first nine months of 2008, a highly positive performance in a singularly downbeat shopping environment, our profitability was by no means satisfactory,” Uva said. “Our operating profitability suffered from unfavorable exchange rates, with a net impact of nearly 20 million euros, and from excessively high operational costs. The improvement of our gross margin is one of the top strategic priorities of our three-year plan, and we are continuing to see abundant signs that this business plan is built on the right assumptions. We are aware that there is a lot of work ahead of us, but we are confident that we will recover profitability within the next few quarters.”

He said full-year sales rates will be roughly in line with those of the first nine months of the year, adding that the company’s operating loss should be in the range of 35 million to 40 million euros as compared to a loss of 49 million euros in 2007.