Natuzzi sales rise in third quarter, but so does loss

Unfavorable exchange rates hurt results

Larry Thomas -- Furniture Today, November 20, 2008

SANTERAMO IN COLLE, Italy — Upholstery major Natuzzi said its third-quarter sales were slightly ahead of last year's third quarter, but the company's net loss widened due to unfavorable currency exchange rates and high operating costs.

The company, which makes the Natuzzi and Italsofa brands, said sales totaled 142.3 million euros ($213.9 million) for the quarter - slightly ahead of last year's third quarter sales of 141.3 million euros.

The net loss totaled 16.2 million euros ($24.3 million), compared with a loss of 14.1 million euros a year ago.

Unfavorable currency exchange rates cost the company's bottom line at least 20 million euros, said CEO Aldo Uva.

He said sales in the Americas rose 4.7% during the quarter due to the growth of the Italsofa brand. Unit sales were 13.7% ahead of last year's third quarter in North and South America - a figure that included a 32.4% jump in Italsofa seating units.

For the first nine months of 2008, worldwide sales were 483.9 million euros ($736.7 million), an increase of 5.8% from the first nine months of 2007, when sales were 457.5 million euros.

The nine-month net loss totaled 42.1 million euros ($64.1 million), compared with a loss of 23.1 million euros in the first nine months of last year.

Uva said he believes sales growth for the full year will be similar to the nine-month sales increase. He did not make an earnings forecast, but said Natuzzi's operating loss should be 35 million to 40 million euros. The 2007 operating loss was 49.1 million euros.