Financial Data and Key Metrics Changes - The net loss for the first quarter of 2025 was $4.2 million, or $0.19 per diluted share, compared to a loss of $6.3 million, or $0.29 per diluted share in the first quarter of 2024 [20] - Adjusted net loss was $5.3 million for Q1 2025, or $0.25 per diluted share, compared to $3.2 million, or $0.15 per diluted share in 2024 [20] - Consolidated sales declined by 1.5% to $140.1 million, with US segment sales also decreasing by 1.5% to $128.5 million [21][22] - Gross margin decreased to 36.1% from 40.5%, driven by customer and product mix [22] Business Line Data and Key Metrics Changes - The major product line decrease was in kitchenware, offset by increases in tableware and home solution products, particularly in warehouse clubs, e-commerce, and the dollar channel [21] - Revenue in the food service segment showed growth despite macro-driven delays in product launches and capital projects [13] - International segment sales were flat year over year, with operating results improving due to implemented actions [14] Market Data and Key Metrics Changes - The Asia Pacific region saw an increase in sales, which was offset by a small decrease from UK national accounts [22] - The mass retail channel experienced a significant sales decline, estimated at around $15 million, while e-commerce, club, and dollar store channels saw increases [30] Company Strategy and Development Direction - The company is transitioning to a geographically distributed sourcing and manufacturing model to mitigate risks from US trade policy changes, aiming to relocate 80% of manufacturing out of China by the end of 2025 [10][19] - Cost management measures have been tightened, with over $10 million in annual costs identified for elimination [15] - The company is actively pursuing M&A opportunities but is being conservative in its approach due to the current economic environment [17] Management's Comments on Operating Environment and Future Outlook - The management highlighted ongoing economic headwinds and a volatile tariff policy affecting the retail environment, leading to slower purchasing and cautious reordering [6][18] - The decision to withhold formal guidance for the full year 2025 was made due to a lack of visibility in the current environment [19][41] - Management expressed confidence in the company's positioning and resilience, stating that they are well-prepared to absorb near-term pressures [18] Other Important Information - The company has taken early actions to build import inventory from China ahead of tariff increases, which has helped mitigate some risks [12] - The transition to a new distribution facility in Maryland is on track, expected to generate long-term efficiencies despite short-term financial impacts [16] Q&A Session Summary Question: Can you provide additional numbers regarding the sales decline at mass retail and the increase in e-commerce? - The sales decline in the mass retail channel was approximately $15 million [30] Question: Can you give an update on the Dolly Parton shipments? - Shipments occurred as expected, and the program remains strong with anticipated year-over-year growth [32] Question: What is the magnitude of the planned price increases? - Price increases are expected to be between 6-16%, with some items subject to higher increases due to tariffs [34] Question: Why did the company decide not to provide guidance? - The decision was based on a lack of visibility in the current environment, making it difficult to provide accurate guidance [41][42] Question: What is the company's strategy for moving out of China? - The company is actively ramping up production in Mexico and other regions, with positive feedback from retail customers regarding the transition [46] Question: How does the company expect demand to react to significant price increases? - Historically, the company's products have shown resilience in high-cost environments, with minimal impact on demand [47] Question: What message does the company have for shareholders regarding stock performance? - The company believes there is a significant intrinsic value gap and is focused on realizing this value in the stock price [50]

Financial Data and Key Metrics Changes - The company reported total sales of €318.8 million for the year, a decrease of 3% compared to the previous year [6] - Gross margin improved to 36.3% in 2024, up from 34.3% in 2023 and 29.7% in 2019, indicating a significant enhancement in profitability [15][16] - The operational loss for the year was €6.3 million, a notable improvement from a loss of €22.5 million in 2019 with higher sales [16][17] Business Line Data and Key Metrics Changes - Branded sales accounted for €289 million, representing approximately 93% of total sales, an increase from 80% in 2019 [7][9] - Direct-to-operator store sales reached €70.1 million, up 4% from 2023 and 18% from 2019, driven primarily by growth in the U.S. market [11] - The company closed two underperforming Natuzzi Italia stores and one Divani Divani store, reflecting a strategic move to optimize retail locations [12] Market Data and Key Metrics Changes - The company noted a challenging and volatile market environment, impacting overall sales performance [6][7] - The U.S. market showed resilience with the opening of a new store in Denver, contributing to the growth in direct-to-operator sales [11] Company Strategy and Development Direction - The company is focused on transforming from a manufacturer to a brand retailer, emphasizing the importance of retail presence and customer experience [10][24] - A significant restructuring effort was undertaken, including the relocation of production from Shanghai to Qinzhou, aimed at improving cost efficiency [14][21] - The company is committed to organic growth and enhancing profitability through improved sales per store and effective marketing strategies [98] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market challenges, highlighting the flexibility of its production capabilities across various regions [61][66] - The management acknowledged the uncertainty in the market due to potential tariff increases but emphasized the company's preparedness to protect margins [62][64] - The focus remains on improving consumer confidence and sales across all geographies, supported by new product launches and marketing initiatives [81][82] Other Important Information - The company has made significant investments in developing new marketing and retail competencies, aiming to enhance customer experience and operational efficiency [24][32] - A strategic divestment of non-core assets is ongoing, with the completion of a transaction involving High Point expected in March 2025 [19][20] Q&A Session Summary Question: How will increased tariffs impact pricing and margins? - Management indicated that they are proactively protecting margins through discussions with partners and implementing surcharges where necessary to mitigate tariff impacts [62][63] Question: What is the company's strategy for increasing revenue? - The focus is on organic growth, improving sales per store, and leveraging new collections and marketing strategies to drive traffic [98] Question: What tools and systems are in place to support the retail transition? - The company has developed analytical tools to diagnose store performance and improve merchandising strategies, enabling faster decision-making [90] Question: What is the outlook for profitability and potential retail expansion in the U.S.? - Management believes that breakeven can be achieved at lower sales levels than in the past, with a focus on nurturing new stores opened in the U.S. [99][100]