Natuzzi S.p.A(US:NTZ)2025-07-03 15:00Financial Data and Key Metrics Changes - The company reported a revenue of $78.1 million for the first quarter, a decrease of 7.6% compared to the previous year [8] - Gross margin fell to 34.1% from 36.9% in the previous quarter, attributed to a planned transition of production from China to Italy [8] - The operating loss for the quarter was €800,000, with net financial costs increasing to €2.9 million from €2.2 million due to currency volatility [9][10] - Cash position improved to $222.2 million, up from $20 million at the end of the previous year [9] Business Line Data and Key Metrics Changes - The company is focusing on enhancing its retail, wholesale, and contract channels, with significant investments in analytics and performance monitoring [17][20] - The new gallery format introduced last year has started to show positive impacts in the U.S. market [18] - The contract division is seen as having significant growth potential, with early signs of interest following the launch of Natuzzi Admony Residence in Dubai [19] Market Data and Key Metrics Changes - Consumer confidence in the U.S. has returned to levels seen in early 2023, while confidence in Europe has decreased by 3.1 percentage points [10] - The business environment remains challenging due to U.S. trade duties and geopolitical tensions, impacting consumer purchasing behavior [15] Company Strategy and Development Direction - The company is implementing a brand commercial strategy that integrates collection, marketing, and customer experience [15] - There is a focus on strengthening sales and engagement across all regions, particularly in North America [20] - The company is considering sustainable production locations for Natuzzi Editions for North America to protect margins [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market conditions and the need for consumers to postpone durable purchases [10] - The company is determined to adjust pricing strategies to protect margins in light of new tariffs [35] - Future performance will depend on market conditions, consumer sentiment, and effective execution of strategies [23] Other Important Information - The company has completed the transition of production facilities, which is expected to yield long-term benefits [9][77] - The company has closed three non-performing stores, resulting in savings of $700,000 in selling expenses [78] Q&A Session Summary Question: Impact of production shift on gross margin - Management confirmed that the shift of production from China to Italy caused a decrease in gross margin, but they are reviewing pricing strategies to improve margins moving forward [30][35] Question: Sustainability of operating expenses - Management expressed confidence that operating expenses can be maintained at the current level, supported by ongoing cost reviews and contingency measures [37][39] Question: Early signs of improvement in retail technology - The company has implemented a new performance assessment process that is showing early signs of improvement in retail operations [44][46] Question: Potential of the commercial division - The commercial division is expected to grow, leveraging relationships with design professionals and focusing on bespoke solutions for hospitality and residential projects [59][63] Question: Update on e-commerce partnership - Discussions with a major home furnishings e-commerce company are ongoing, with optimism about concluding negotiations positively [68][69]