Italian furniture manufacturer Natuzzi has reported a decline in second quarter sales.
According to its latest trading update for Q2 2025, total sales amounted to €78.3 million, down 7.2% from €84.4 million in 2Q 2024.
Sales in North America fell 11% to €25.4 million, while China revenues were down 4.9% to €6 million. As for West & South Europe, sales fell 11.2% to €22.2 million and Rest of the World sales slipped 22.5% to €9.5 million. The only key market that showed growth was its emerging markets division, with revenues up 25.3% to €12.4 million.
Gross margin was at 34% of revenue, compared to 38.1% in 2Q 2024, primarily due to the decrease in sales and the planned production shift of Natuzzi Editions for the North American market from China to Italy.
Natuzzi said that store traffic and written orders remain below expectations, due to a persisting and generalised weakness in consumer confidence in addition to trade duties by the US administration. The group warned that this may continue to adversely affect its results of operations for the remainder of the year.
Pre-tax losses for the period resulted at €5.8 million, widening from a loss of €2.2 million in 2024. During the quarter, Natuzzi invested €4.3 million, primarily to upgrade the Group’s Italian factories.
Pasquale Natuzzi, Chairman and Chief Executive Officer and interim of the Group, commented: “The operating environment remains challenging, influenced by the geopolitical instability, a weak US real estate market, a strengthening euro, and still high interest rates. These factors have affected consumer confidence and slowed demand of semi-durable goods.
“Furthermore, trade tensions arising from US trade tariffs have heightened uncertainty, with dealers and their buyers prioritizing inventory reduction over placing new orders. As a result, consolidated sales for the first half of the year fell short of our expectations, making it more difficult to absorb fixed costs and protect margins.
“We fully recognise that the Group is currently navigating a highly challenging environment and Company-specific factors. These circumstances have weighed on our operating performance and slowed the execution of our turnaround strategy, which have adversely affected our cash-generation capacity.
“In response to that, management is developing a comprehensive restructuring plan, aimed at restoring efficiency and profitability across the Group, and that marks a clear break from the past.”
The restructuring plan guidelines envisages a significant reduction in fixed costs; a more flexible production capacity; the divesting of certain non-strategic Italian assets; the outsourcing of low value-added activities; and a review of the Company’s capital structure and potential capital strengthening measures.
“In the short term, we remain firmly committed to maintaining a rigorous focus on cash flow monitoring, exerting strict controls on discretionary spending, and ensuring disciplined management of working capital to safeguard our liquidity,” Pasquale added.
“Although the execution of our commercial strategy is affected by current uncertainties, its core pillars remain unchanged. Investments made in product innovation, design, marketing and customer experience are delivering encouraging results, and the Trade & Contract division represents a short-term growth opportunity.
“We have made progress in reorganising our commercial operations. We recently appointed David Workman as Chief Commercial Officer, Wholesale, to lead Natuzzi’s North American operations. In addition, we have completed the organization in the UK with a new Marketing Manager and a Merchandising Manager supported by a dedicated customer care team. In Italy the new leadership team is delivering encouraging results and can serve as a best-practice model for other key markets.”
The Company, with the full support of its majority shareholder, is advancing the search for a new Chief Executive Officer to succeed Pasquale Natuzzi, who currently holds the position of ‘CEO ad interim’.
The Board of Directors has initiated a selection process aimed at identifying and appointing an experienced executive with specific expertise in business turnaround and capable of driving the strategic priorities set forth in the Company’s restructuring plan.
