Natuzzi (NYSE:NTZ) said its first-quarter 2026 results were “clearly disappointing,” citing geopolitical uncertainty, U.S. tariffs, weak housing activity and subdued consumer sentiment, while outlining a restructuring plan intended to reduce fixed costs and improve manufacturing efficiency.
Executive Chairman and Chief Executive Officer Pasquale Natuzzi said the company’s industrial footprint in Italy had become oversized relative to current sales volumes and was carrying costs that were no longer sustainable. The company began implementing its restructuring plan in early July.
Manufacturing Restructuring Targets Cost Base
Chief Financial Officer Carlo Silvestri said the U.S.-focused Natuzzi Editions business involved annual revenue of roughly €30 million to €40 million. Based on preliminary analysis, the production relocation could produce EBIT equal to approximately 25% of that portion of the business, though the ultimate result will depend on the actual product mix. He said the action would begin affecting results in the second half of 2026, while the figures cited represented a full-year impact.
The company is also cutting the number of operating plants in Italy to two from five. Pasquale Natuzzi said the move is intended to remove fixed costs that are no longer aligned with the size of the business and create conditions for greater economies of scale.
Natuzzi has received expressions of interest from 120 employees for a voluntary exit program. Silvestri said participation still must be confirmed, and that employees who leave under the program would exit the company’s workforce beginning Jan. 1, 2027. The related cash costs would occur in 2027.
Silvestri said some workforce costs are currently offset through social-safety-net measures and wage-support programs. The eventual savings from the workforce actions will depend on plant utilization levels and the availability of social-support mechanisms next year, he said.
The company also plans to continue disposing of non-core and idle assets, including a plant for which an offer has been received. Silvestri said the process could potentially involve rehiring 40 people and has been designed with attention to employment protection. Natuzzi has additionally begun downsizing its senior management structure, with executive departures in the U.S. and Italy expected to reduce costs.
Commercial Strategy Focuses on Franchise Expansion and Clienteling
Chief Commercial Officer and Chief Product Division Officer Pasquale Natuzzi Jr. said the company is pursuing a commercial transformation centered on retail expansion, design-industry relationships and improved coordination between commercial and finance teams.
During Milan Design Week in April, Natuzzi introduced Natuzzi Studio, a retail concept aimed at trade, project and specification business. The format is intended to function as an urban design hub where architects, interior designers, developers and customers can work with company teams on residential and commercial projects.
Natuzzi Jr. said dealers have expressed interest in opening the new format. The company opened 26 new stores during the first half of 2026, following 49 openings in 2025. In response to an analyst question, he clarified that the new locations were franchise-operated stores financed by third-party partners, rather than by Natuzzi itself.
The company is also closing or relocating stores that no longer reflect the Natuzzi brand’s premium and luxury positioning. Natuzzi Jr. said store traffic has continued to decline at a double-digit rate across most markets, prompting the company to move beyond a traditional walk-in retail model.
Under the revised approach, store managers and sales consultants are being repositioned as design consultants and business developers, focused on cultivating relationships with architects, designers, developers and end consumers. The company has also begun holding daily cross-functional meetings addressing commercial priorities, cash generation and operational execution.
Regional Initiatives and Project Pipeline
In the U.S., Natuzzi is reorganizing its operations with an emphasis on commercial urgency and clienteling initiatives aimed at creating both business-to-business and business-to-consumer opportunities beyond conventional store traffic.
In China, the company recently completed a road show and opened a flagship store in Beijing. Natuzzi Jr. said pianist Lang Lang attended as an ambassador and supporter of the opening, along with Italy’s ambassador to China. The company also held events with the local design community.
Natuzzi is preparing a store-refresh program in the U.K. covering both Natuzzi Italia and Natuzzi Editions. The initiative will update visual merchandising and store displays while seeking to improve commercial momentum and store-traffic conversion, according to Natuzzi Jr.
The company’s contract business continues to develop an international pipeline through relationships with developers, hospitality operators, architects and specifiers. Natuzzi Jr. said geopolitical tensions in the Middle East and India have delayed the closing and revenue recognition of certain projects in markets where the company has invested heavily, though he said the opportunities remain largely intact.
Management said it believes that the restructuring, tighter commercial discipline and closer cross-functional coordination can support improved operational flexibility and establish a foundation for longer-term margin recovery.
About Natuzzi (NYSE:NTZ)
Natuzzi S.p.A. is a global design and manufacturing company specializing in high-quality upholstered furniture. The company’s product portfolio includes leather and fabric sofas, armchairs, recliners, sectional systems and complementary home furnishings such as coffee tables, beds and accessories. Natuzzi markets its offerings under two primary brands—Natuzzi Italia, which focuses on contemporary Italian design, and Natuzzi Editions, which provides a broader range of styles at accessible price points.
Founded in 1959 by Pasquale Natuzzi in Santeramo in Colle, Italy, the company began as a small artisan workshop and has grown into the world’s largest producer of leather upholstered furniture.
