Natuzzi (NTZ) Q1 2024 earnings summary

Executive summary

• Q1 2024 revenue was €84.5 million, nearly flat year-over-year, with growth in the U.S. and China offset by declines in South/West Europe and emerging markets.

• Directly operated store sales rose 13.6% to €20.5 million, with North America DOS up 29.8% year-over-year.

• Gross margin improved to 36.9%, up 1.3 percentage points from 2023 and 7 points from 2019, leading to an operating profit of €0.6 million versus a loss last year.

• Ongoing restructuring reduced headcount by 94 in Q1 2024, with total workforce down 18% since 2021.

• Net loss narrowed to €1.8 million from €3.3 million in Q1 2023.

Financial highlights

• Consolidated revenue: €84.5 million (down 1.8% year-over-year).

• Gross profit: €31.2 million (36.9% margin), up from €30.6 million (35.6%) in Q1 2023.

• Operating profit was €0.6 million, compared to a €0.9 million loss in Q1 2023.

• Retail network (DOS and franchise) accounted for 66.4% of sales, up from 61.7% in Q1 2023.

• Natuzzi Italia sales were €29.5 million and Natuzzi Editions €46.5 million in Q1 2024.

Outlook and guidance

• Management expects continued gross margin expansion, targeting 40% at €100 million revenue as market conditions normalize.

• Focus remains on margin expansion, cost reduction, and retail-led growth, especially in the U.S., China, and select European markets.

• Continued investment in new retail formats, product collections, and digital marketing to drive future sales.