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From Home Furnishing Business

Natuzzi Records 7.3% Q2 Sales Increase, but Net Loss Widens

Leather upholstery major Natuzzi (NYSE: NTZ) said second-quarter sales rose 7.3%, but the Italian company’s net loss widened to 4 million euros, or about $4.83 million.

Sales for the quarter ended June 30 totaled 117.9 million euros, or about $142.3 million. That was up from 109.9 million euros, or about $132.7 million in last year’s second quarter.

The company said Natuzzi branded sales rose 13.8% in the Americas, while sales from its Softaly private-label division rose 15.2% in the region.

Sales from company-owned retail stores jumped 32.5% in the quarter and represented 13.8% of sales in its core upholstery and home furnishings business.

Natuzzi currently has 60 company-owned stores worldwide, including a store opened earlier this year in West Palm Beach Fla. The company said it plans to open three more stores in the fourth quarter of 2017 and two in the first quarter of 2018.

The net loss in the most recent quarter was well above the loss in last year’s second quarter, which totaled 800,000 euros, or about $965,700.

“Despite the troubles confronting our industry and retail in general, I am pleased to report the Natuzzi grew both revenues and industrial margin in the second quarter,” said Pasquale Natuzzi, chairman and CEO. “This is a direct result of the work we are doing to grow our direct retail network through which we are generating sales of higher end product as well as more complete home furnishing packages. Focus on continuing to build for this growth is our highest priority.

“At the same time, we are taking steps to strengthen management in critical areas and are managing closely our administrative expenses during this period of rapid investment. Our brand has never been stronger and our drive never more directed.”

For the six months ended June 30, revenues totaled 233.8 million euros, or about $282.2 million. That was up from 230.6 million euros, or about $278.4 million in the first half of 2016.

The first-half net loss totaled 14.7 million euros, or about $17.7 million. In the first half of 2016, the loss totaled 1.1 million euros, or about $1.33 million.

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