Zegna's Q1 revenues improve, while Thom Browne declines

Ermenegildo Zegna Group announced unaudited revenues of 463.2 million euros for the first quarter, up 8.1 percent or 10.7 percent at constant currency and down 5.3 percent on an organic growth basis.

Revenues for the Zegna segment amounted to 324.9 million euros, up 1.7 percent and 4.3 percent on an organic growth basis, while revenues for the Thom Browne segment amounted to 79.1 million euros, down 30.2 percent and 35 percent and revenues for the Tom Ford Fashion segment amounted to 65 million euros.

Commenting on the first quarter update, Ermenegildo “Gildo” Zegna, chairman and CEO of the Ermenegildo Zegna Group, said: “Closing the first quarter of 2024 with double-digit revenue growth on a constant currency basis is reassuring given the challenges that the sector is facing. I am confident that we are taking the right actions to make our brands even stronger and to deliver on our medium-term ambitions.”

Zegna Group’s Q1 results across brand segments

In the first quarter, revenues for the Zegna brand were 282.9 million euros, up 4 percent or 6.8 percent on an organic growth basis driven by growth in key categories and, in particular, footwear and leisurewear. While EMEA, the Americas and Japan saw solid double-digit growth, the Greater China region recorded single digit negative growth in the quarter.

Revenues for Thom Browne were 79.2 million euros, down 29.6 percent or down 34.4 percent on an organic growth basis. The brand recorded strong results in Japan while EMEA and the Greater China Region underperformed.

The company added that revenues for textile were 33.2 million euros, down 1.7 percent or down 0.8 percent on an organic growth basis, as a result of lower textile demand from the luxury goods sector. Other revenues, which mainly includes revenues for third-party brands, were 2.8 million euros, down 72 percent or 43.6 percent on an organic growth basis, reflecting the end of the Tom Ford International distribution licence following the acquisition of Tom Ford International on April 28, 2023.

Zegna Group’s retail performance in Q1

First quarter DTC revenues were 328 million euros, up 20.4 percent and 3.2 percent on an organic growth basis. The integration of the Tom Ford Fashion business contributed 43.7 million euros in DTC revenues for the quarter. At the end of March, Zegna had 277 directly operated stores (DOS), including 16 stores in Korea and an additional four in the United States converted to DOS.

Thom Browne DTC revenues rose by 4.4 percent. Excluding the effect of the acquisition of the Thom Browne business in Korea, DTC revenues declined by 13.9 percent on an organic growth basis. At the end of March, Thom Browne counted 86 DOS, and Tom Ford Fashion operated 54 DOS.

Wholesale branded revenues were 99.1 million euros, down 11.5 percent or 25.9 percent on an organic growth basis. Zegna brand wholesale revenues were 43.3 million euros, up 2.3 percent or 9.3 percent on an organic growth basis. Thom Browne wholesale revenues declined to 34.5 million euros negatively impacted by early deliveries, a demanding comparison base, and the decision to streamline the brand’s wholesale business. Tom Ford Fashion wholesale revenues were 21.3 million euros, representing 33 percent of total Tom Ford Fashion revenues.

Zegna Group posts growth in all geographies except China

The group’s revenues were boosted by a strong double-digit growth in the Americas, where revenues amounted to 114.2 million euros, up 57.7 percent and 10.3 percent on an organic growth basis, accounting for 25 percent of the Group’s revenues. EMEA recorded revenues of 156.6 million euros, up 4.3 percent or down 6.5 percent on an organic growth basis, reflecting a negative performance for Thom Browne and accounted for 34 percent of the Group’s revenues.

The Greater China region recorded revenues of 139.4 million euros, down 15.3 percent and 13.1 percent on an organic growth basis, equal to 30 percent of the Group’s revenues. Revenues in the rest of APAC rose by 28.7 percent and 4.9 percent on an organic growth basis to 52.4 million euros, mainly driven by strong performance in the Japanese market and the aforementioned conversion of the Thom Browne and Zegna Korean mono-brand stores from wholesale to retail.

On April 5, 2024, the Group announced a dividend distribution to the holders of ordinary shares of 0.12 euros per share, corresponding to a total of approximately 30 million euros.