Italian furniture manufacturer Natuzzi has reported a reduction in first quarter sales, with all markets experiencing a decline.
According to its latest trading update for Q1 2026, total net sales amounted to €59.5 million, down 23.8% from €78.1 million in Q1 2025.
Sales in North America fell 26.2% to €16.9 million, while China revenues declined 38.9% to €3.4 million. As for West & South Europe, sales were down 20.2% to €19.9 million and Rest of the World sales decreased 19.6% to €8.4 million. The emerging markets division saw revenues fall 20.7% to €9.1 million.
Gross margin was at 32.9% of revenue, compared to 34.1% in Q1 2025, primarily impacted by lower delivered sales in the quarter, resulting in a less efficient absorption of industrial fixed costs.
Pre-tax Loss for the period resulted at €4.7 million, compared to a loss of €3.9 million year-on-year.
Pasquale Natuzzi, Chairman and Chief Executive Officer ad interim of the Group, commented: “Our results of operations continue to reflect a persistently challenging market environment, marked by geopolitical instability, weak consumer confidence and a soft housing market.
“In this context, the Group’s current business infrastructure is no longer sustainable under prevailing demand conditions. Accordingly, we have launched a comprehensive review aimed at significantly reducing the Group’s cost base and aligning its overall structure with current demand levels, thereby supporting more efficient production planning and margin improvement.
“At the same time, we continue to rationalize our product offering, strengthen our commercial and business development capabilities in strategic markets, and position Natuzzi to capture future opportunities, particularly in Emerging Markets and Trade & Contract.
“The Company has already taken steps to streamline its operations, with a particular focus on its Italian manufacturing footprint. Since the beginning of July, production has been concentrated in two plants, compared with the five facilities previously in operation, with the aim of reducing fixed costs and improving operational efficiency.
“At the same time, the Company has initiated the transfer of Natuzzi Editions production lines serving the North American market from Italy to Romania, in order to better align margins with the positioning of the brand. These actions form part of the Company’s restructuring plan are intended to contribute to reducing the Group’s cost base and supporting long-term sustainability of the business.
“Consistent with our strategy, we recently received a binding and irrevocable offer from a thirdparty buyer for the sale of a local industrial asset. The proposed transaction also contemplates the transfer of approximately 40 employees from the Company to the buyer.
“The Company continues to review its store network with the objective of optimizing its retail footprint and reducing losses through targeted store disposals, selective early closures, and lease renegotiations. At the same time, Natuzzi is consolidating its international retail presence through 18 new openings this year, including the recently inaugurated Natuzzi Italia store in Beijing.
“In parallel, Natuzzi continues to maintain a constructive dialogue with the Ministry of Enterprises and Made in Italy (MIMIT) and local authorities to address labor-related challenges at the Group’s Italian operations.
“Potential measures include social safety net provisions funded by the Government, reduced working-hour schedules, outplacement initiatives, and voluntary incentive-based exit programs. In this regard, 120 employees have signed an expression of interest under the Company’s voluntary incentivized exit program.
“Our priority remains clear: returning gradually to operational profitability through a more agile structure. We believe this to be necessary for protecting the Group’s assets and working toward improved financial sustainability. We remain committed to working closely with our shareholders, partners, employees, and all stakeholders as we navigate this phase of transformation.”
