Natuzzi sales up 14.7% worldwide but decline 1.2% in the Americas
By Joan Gunin -- Furniture Today, November 18, 2001
SANTERAMO IN COLLE, Italy — SANTERAMO IN COLLE, Italy — Upholstery producer Natuzzi said sales rose 14.7% worldwide in the third quarter despite a slight decline in the Americas, and earnings also were up from the same period a year earlier.
Sales of $155 million marked the seventh consecutive quarter of strong revenue growth, said Pasquale Natuzzi, chairman and chief executive officer.
Meanwhile, the company said that its previously announced flagship store in Greensboro, N.C., will be open by next October. The company-owned outlet will serve as a retail laboratory for Natuzzi and a training ground for its dealers, said Fred Starr, president and CEO of Natuzzi Americas.
"We want to have a consistent, strong consumer-focused image and this store will give us a way to do it," Starr said. "It will be an extension of the brand at retail, done in a creative way, as only a flagship store can do."
In the third quarter, Natuzzi's net income rose 71% from a year ago to $16.6 million. But excluding a gain from an adjustment related to foreign exchange contracts, the net would have risen 19%, the company said.
In the Americas, sales were down 1.2% in the third quarter to $77.9 million. Sales rose nearly 39% in Italy and the rest of Europe, accounting for most of the company's gains.
Natuzzi's gross profit dipped slightly to $50.5 million in the quarter. The gross profit margin decreased to 32.6% from 37.6% a year ago. The margin decline was due to higher raw material prices, chiefly leather, and lower efficiency levels stemming from the startup of plants in Brazil, China and Italy.
Operating income declined 21.8% to $18.3 million, with the operating margin falling to 11.8% from 17.3% a year earlier.
Pasquale Natuzzi said attendance at the company's High Point showroom in October was off 34%, but added, "Our company realized double-digit order growth as large customers sought to stock depleted inventories in advance of the January-February sales period."
| Quarter ended 9/30 | 2001 | 2000 | Change |
|---|---|---|---|
| Sales | 336,758 | 293,560 | 14.7% |
| Operating income | 39,791 | 50,860 | (21.8%) |
| Net income(b) | 36,089 | 21,105 | 71.0% |
| Earnings per share(c) | $0.30 | $0.17 | 76.5% |
| 9 months ended 9/30 | 2001 | 2000 | Change |
| Sales | 1,139,875 | 951,348 | 19.8% |
| Operating income | 150,669 | 186,008 | (19.0%) |
| Net income(d) | 110,418 | 111,684 | (1.1%) |
| Earnings per share(c) | $0.93 | $0.95 | (2.1%) |
| (a) In millions of Italian lire, except earnings per share, which are in U.S. dollars. (b) Includes an ITL 8.8 billion net currency exchange gain and an ITL 69 million minority interest loss in the 2001 quarter and an ITL 26.7 billion net currency exchange loss and an ITL 26 million minority interest gain in the 2000 quarter. (c) Converted at the rate of US $1=ITL 2,172.2 for the 2001 quarter, US $1=2,139.5 for the 2000 quarter, US $1=ITL 2,162.8 for the 2001 nine months and US $1=ITL 2,055.5 in the 2000 nine months. (d) Includes net currency exchange losses of ITL 12.1 billion in the 2001 nine months and ITL 49.5 billion in the 2000 nine months and minority losses of ITL 96 million in the 2001 nine months and ITL 44 million in the 2000 nine months. | |||
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