Natuzzi (NTZ) Q2 2025 earnings summary

Executive summary

• Performance in the first half of 2025 was significantly impacted by challenges in the Chinese and American markets, including store closures, production shifts due to tariff uncertainties, and weak consumer demand.

• Revenue for 2Q 2025 was €78.3 million, down 7.2% year-over-year, with gross margin declining to 34.0% from 38.1% due to lower sales and production shift from China to Italy for North America.

• Operating loss widened to (€2.7) million, and net loss for the quarter was (€5.9) million.

• A multi-year restructuring plan has been approved to optimize costs, increase flexibility, and develop the retail business, with a focus on cost reduction, asset divestitures, and capital structure review.

• Majority shareholder provided a €15 million interim credit line to support liquidity and transformation.

Financial highlights

• Net sales for 2Q 2025 were €78.3 million, down 7.2% year-over-year.

• Gross margin was 34.0% for the last quarter, affected by lower retail sales and margin pressures.

• Operating loss was (€2.7) million, and net loss was (€5.9) million for the quarter.

• Net finance costs were (€3.2) million, mainly due to unfavorable currency movements.

• Total net asset value is approximately $70 million, including core and non-core assets.

Outlook and guidance

• The restructuring plan aims to achieve sustainable profitability, with a trajectory toward breakeven and then profitability even at current depressed revenue levels.

• Management expects continued adverse effects on operations for the remainder of the year due to weak consumer confidence and U.S. trade duties.

• No specific guidance on commercial revenue run rate was provided, but management expects a multiplying effect as more projects are completed.

• Management is confident that ongoing investments and commercial initiatives will drive potential business growth.