Natuzzi posts smaller loss of $6.5 million as European sales lag

Larry Thomas -- Furniture Today, November 19, 2012

SANTERAMO IN COLLE, Italy — Hampered by weak sales in Europe, leather upholstery major Natuzzi reported a third-quarter loss of $6.5 million.

The company said worldwide sales fell 2.4% to $139.7 million, a figure that included a 25.8% drop in sales in Italy and a 6.3% decline in the rest of Europe.

By contrast, sales in the Americas, which includes the United States, Canada and Brazil, were up 5.1%.

"(Our) performance during the quarter turned out to be affected both by the persisting poor trend in sales from Europe, which is suffering from the effects of fiscal consolidation policies still in force in some countries, and by the expansion of the global slowdown to other markets that are important to us," said Pasquale Natuzzi, chairman and CEO.

The most recent quarterly loss, which equals 12 cents per share, was well below the loss in last year's third quarter, when it totaled $12.8 million or 20 cents per share.

"We are not fully pleased with the quarterly operating result. However, the improving trend in EBIT (earnings before interest and taxes) as compared with one year ago gives us reasons for looking to the future with confidence," Natuzzi said. "In fact, the efficiency recovery measures we've been implementing, together with a rigorous overhead cost-controlling plan, continue to give encouraging results and represent a clear indication that we are on the right path towards profitability."

For the nine months ended Sept. 30, sales totaled $438.9 million, down 4.1% from $457.4 million in the first nine months of 2011.

The company said sales rose 18.1% in the Americas during the period, but fell 30.1% in Italy and 15.5% in the rest of Europe.

The nine-month net loss totaled $18 million or 33 cents per share. That compares with a loss of $4.7 million or 10 cents per share in the first nine months of last year.