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From Home Furnishing Business

Natuzzi Q1 Sales off 11.2 Percent

Italian leather upholstery vendor Natuzzi Group (NYSE: NTZ) reported first-quarter 2014 sales of 98.4 million euros, down 11.2 percent from fiscal 2013's first three months.

For the three months ended March 31, Natuzzi lost 9.8 million euros, compared with a 6 million-euro loss in the first quarter of 2013.

The company attributed the sales drop to the negative impact from foreign currency movements that have eroded 3.2 percent of total net sales when translated into Euro; the negative performance of some of Natuzzi Group’s largest dealers located in the North America region, following the adverse weather conditions that occurred on the Atlantic coast and that have affected the first few months of the year; production delays, particularly in Italy and China.

In Italy, Natuzzi reported a low level of productivity since staffing its Italian plants with workers on rotation, in accordance with the agreement it entered into with the unions in October. In China, Natuzzi experienced a higher than expected level of turnover among workers after the Chinese New Year holiday period, consequently lowering the level of productivity for the Chinese plant.

“First quarter 2014 results represent a first check-point for monitoring the progress of the 2014-2016 Business Plan, that was approved by the board of directors on February 28, 2014, as well as the effectiveness of the actions already undertaken," said Chairman Pasquale Natuzzi.

Natuzzi attributed a 2.6 million euro loss to the operating performance of the Matuzzi Group’s directly operated stores; a 1.4 million euro loss related to operations in Brazil; and the remaining operating loss to the Group’s industrial operations and the overhead cost structure.

"Although the current order flow is not in line with our expectations, we perceive the first signals of a trend reversal following the positive feedback we have received on our new collections that were recently introduced at international fairs since the end of March," Natuzzi said.

Click here for the complete Natuzzi earnings release.

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