Italian luxury leather furniture brand Natuzzi has shared its financial results for the first quarter of 2025, showing a decline in both sales and profits. The company is facing several global challenges that have affected its performance.

For the quarter ending March 31, 2025, Natuzzi’s total net sales dropped to €78.1 million. This is a 7.6% decrease compared to €84.5 million during the same period last year.

The company’s gross margin also fell, coming in at 34.1%, down from 36.9% in Q1 2024. This was mainly due to the ongoing shift in production of Natuzzi Editions for the North American market from China to Italy.

Natuzzi posted an operating loss of €0.8 million for the quarter. In contrast, the company had a small operating profit of €0.6 million in Q1 last year.

Finance costs rose to €2.9 million, up from €2.2 million last year. This was partly due to unfavorable changes in currency values affecting trade receivables and payables.

Despite these setbacks, Natuzzi invested €1.9 million during the quarter. The funds were used mostly to improve its factories in Italy.

The company’s cash position improved as well, rising to €22.5 million as of March 31, 2025, compared to €20.3 million at the end of 2024. This boost was largely thanks to the sale of a property in High Point, which helped offset other cash outflows.

“The markets in which we operate have not shown those signs of improvement we expected. The business environment has been further affected by the introduction of U.S. trade duties on April 2nd, the perduring Russia-Ukraine conflict, and, more recently, the escalation of tensions in the Middle East. In this context we have intensified our efforts to support commercial deployment.”

Pasquale Natuzzi, Executive Chairman, Natuzzi Group

However, the company is concerned about store traffic and customer orders, both of which have fallen short of expectations. Weak consumer confidence is seen as a major reason.