Ermenegildo Zegna Group reports 8 percent decline in Q3

Ermenegildo Zegna Group reported unaudited revenues of 1,357.4 million euros for the first nine months, up 1.7 percent or down 4 percent organic. In the third quarter, revenues reached 397.3 million euros, down 7.8 percent and down 6.7 percent organic.

Commenting on the results, Ermenegildo “Gildo” Zegna, chairman and CEO of the company, said: “Although third quarter revenues showed a slowdown for the Group, I am reassured by the continued positive performance of the Zegna brand, boosted by the DTC channel, and also by the quality of talent we have brought into Thom Browne and Tom Ford Fashion as we work to strengthen those teams.”

“Looking ahead to the fourth quarter of 2024 and into 2025, we continue to foresee an uncertain environment, particularly in the Greater China Region,” Ermenegildo “Gildo” Zegna added.

Highlights of Zegna segment’s financial results

In the nine month period, revenues for the Zegna segment amounted to 944.4 million euros, up 0.8 percent and 2 percent organic. Revenues in the third quarter were 283.9 million euros, down 2.9 percent and down 1.3 percent organic with the negative performance of the textile division offsetting the growth from the Zegna brand.

Revenues for the Zegna brand were 810.6 million euros, up 3.4 percent or 4.8 percent organic. In the third quarter, the brand reported 0.9 percent or 2.5 percent growth driven by double-digit growth in EMEA, the Americas and Japan.

Revenues for textile were 101.5 million euros, down 6.5 percent and down 5.4 percent organic, with the third quarter down 16.3 percent and 15.3 percent organic due to declining orders from third parties. Other revenues, which mainly include revenues for third-party brands, were 11.3 million euros, down 51.6 percent and 29.9 percent organic.

Review of Thom Browne and Tom Ford Fashion performance

In the nine month period, revenues for the Thom Browne segment amounted to 220.4 million euros, down 21.7 percent and down 26.9 percent organic. In the third quarter, the segment reported 53.5 million euros, down 27.4 percent or 26.8 percent organic.

Thom Browne brand revenues were 220.1 million euros, down 21.4 percent and 26.7 percent organic.

Revenues for the Tom Ford Fashion segment amounted to 213.9 million euros, a decline of 3.8 percent organic. In the third quarter the brand reached revenues of 65.4 million euros, with the DTC up 2.5 percent organic driven by good performance in the US and EMEA DTC channel, while the wholesale channel reported a 29.6 percent organic decline, largely due to a different timing in deliveries.

Zegna Group posts positive DTC channel results

The company’s DTC revenues were 953.6 million euros, up 10.2 percent or 2 percent organic. At the end of September, Zegna had 285 directly operated stores (DOS), with six new openings in the third quarter, including New York Meatpacking, Honolulu and some conversions from wholesale to retail in Canada and one store in Riyadh.

Thom Browne DTC revenues were up 0.7 percent and down 12.9 percent organic. In the third quarter, revenues declined 14.1 percent and 13.2 percent organic, reflecting the challenging environment, especially in the GCR notwithstanding the positive performance in Japan and Korea. At the end of September, Thom Browne counted 106 DOS, including four net openings in APAC.

Tom Ford Fashion DTC revenues reached 136.2 million euros, up 2 percent, while the third quarter revenues rose 2.5 percent organic driven by growth in the US and the positive performance of EMEA counterbalanced by a continued softer performance in APAC. At the end of September, the segment had 62 DOS, including six net openings in the quarter, among which were Beijing China World and Saks Fifth Avenue women.

Wholesale branded revenues were 291 million euros, down 13.7 percent and down 17.9 percent organic.

EMEA revenues of 485.6 million euros were up 2.2 percent but down 1.6 percent, while the third quarter declined by 2.1 percent or 1.6 percent organic reflecting a double-digit growth of the Zegna brand, offset by the negative results at Thom Browne.

Revenues in the Americas of 358.2 million euros increased by 15.7 percent and 2.9 percent organic, while the third quarter reported a 6.1 percent or 2.9 percent organic decline. The GCR recorded revenues of 353.1 million euros, down 15.8 percent and 14.6 percent organic, and third quarter revenues declined by 22.8 percent or 22.3 percent organic.

Revenues in the rest of APAC reached 158.8 million euros, an increase of 23.9 percent and 6.2 percent organic, while third quarter revenues rose by 6.1 percent or 7.4 percent organic driven by the ongoing double-digit performance in the Japanese market for Zegna and Thom Browne.