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- **Market Recovery**: China and U.S. market recoveries offset challenges, with 30 new stores opened in China and global expansion efforts.
- **Production Shift Impact**: Moving production to Italy reduced tariff risks but strained margins; new factory in China aims to lower costs.
- **Trade Contract Growth**: Dubai and Jerusalem projects highlight potential for high-margin trade contracts, with design shows driving partnerships.
- **Financial Restructuring**: $15M credit line supports short-term needs; targeting profitability through margin improvement and cost cuts.
- **CEO Search**: Actively seeking experienced luxury brand leader; restructuring progress may take time.

**【CEO Opening Remarks】**
- **Market Performance**: Revenue growth driven by recoveries in China and the U.S., despite challenges like tariffs and store closures. 77 stores closed in China, 30 new stores opened, and 12 globally.
- **Production Shifts**: Moved production from Shanghai to Italy to mitigate U.S.-China tariffs, impacting margins. A new factory in Quinzhou, China, was established post-tariff uncertainty.
- **Commercial Initiatives**: Expanded trade contracts (e.g., Dubai and Jerusalem projects) and attended 10 design shows globally to enhance brand visibility and partnerships.
- **Restructuring Focus**: Emphasized store optimization, new product launches, and cost efficiency through events like client congresses in Italy and China.

**【CFO Financial Commentary】**
- **Credit Line**: CEO provided a $15 million zero-interest credit line to support short-term needs and restructuring.
- **Asset Valuation**: Non-core assets, including a tannery valued at $5 million, are being evaluated for monetization. Total net assets are around $70 million, though specifics on core/non-core are pending.
- **Margin Improvement**: Aiming to increase gross margin (34% Q2) through higher-margin retail sales, operational efficiency, and price adjustments. Targeting profitability post-restructuring.
- **Cost Reduction**: Evaluating measures to reduce operating expenses and improve breakeven trajectory.

**【Q&A Highlights】**
- **Restructuring Goals**: CEO expects profitability post-restructuring, with trade contract revenue seen as a growth driver. Design contracts vary in spend per unit, depending on project type.
- **Asset Strategy**: Actively seeking buyers for non-core assets; tannery sale is challenging but under consideration.
- **CEO Search**: Engaged a search firm; candidates must have experience in luxury brands, retail, and operations. No timeline for hire, but search is ongoing.
- **Q3 Outlook**: Management declined to provide Q3 order details, directing investors to the press release for guidance.

Natuzzi S.p.A. (NTZ) Q2 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

NTZ

NTZ fundamentals

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