Natuzzi sales up in dollars, units
Joan Gunin -- Furniture Today, November 16, 2003
Santeramo in Colle, Italy — In U.S. dollars, Natuzzi's third-quarter 2003 sales of $195.9 million were up 15.8 % from the same period a year earlier. But because its sales are denominated in euros, which have strengthened against the dollar, the company reported a sales gain of just 1.2%.
Third-quarter net income was the equivalent of $7.9 million, down 60.9% in euros from the same period last year. Operating income fell 30.9% to $12.1 million, with the operating margin falling to 6.2% from 10.4% in the 2002 quarter.
Leather-upholstered furniture sales decreased 11.3% to $135.6 million, while fabric-upholstered product sales grew 25.2% to $30.8 million.
Sales of Natuzzi-branded furniture, which accounted for 76.6% of third-quarter total upholstery sales, declined 11.7% in euros to the equivalent of $127.5 million, and Italsofa-branded furniture rose 17.3% to $38.9 million.
"While unit sales increased 1.7% in the quarter compared to the same period of 2002 despite the weak economic conditions reported in Europe in the period, the appreciation of the euro against the U.S. dollar and other currencies in which we export had a negative effect on Natuzzi's upholstery sales performance," said Pasquale Natuzzi, chairman and chief executive officer.
He said profitability also continued to be affected by higher advertising expenses, costs incurred to open new stores and galleries, and "the persistent pressure on price coming from low-cost countries."
The company said it expects to report unit sales that are about flat with last year's and a net profit margin of approximately 6% for the full year 2003.
| Natuzzi(a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are loses or declines. | |||
| Quarter ended 9/3020032002Change | |||
| (a) Converted from euros to U.S. dollars at the average exchange rate of U.S. $1.1266=1 euro in the 2003 quarter, U.S. $.9843=1 euro in the 2002 quarter, U.S. $1.1124=1 euro in the 2003 nine months and U.S. $.9274=1 euro in the 2002 nine months. |
|||
| Sales | $195,900,000 | $169,200,000 | 15.8% |
| Operating income | 12,100,000 | 17,500,000 | (30.9%) |
| Net income | 7,900,000 | 17,600,000 | (55.1%) |
| Earnings per share | 0.15 | 0.32 | (53.1%) |
| 9 months ended 9/30 | 2003 | 2002 | Change |
| Sales | $622,900,000 | $558,800,000 | 11.5% |
| Operating income | 35,500,000 | 75,900,000 | (53.2%) |
| Net income | 37,500,000 | 67,700,000 | (44.6%) |
| Earnings per share | 0.69 | 1.24 | (44.4%) |
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