Italian firm Ermenegildo Zegna's revenue surges 13.4% in Q1 FY23

The company’s Zegna segment recorded revenues of €319.3 million in the first quarter, growing by 12.6 per cent YoY and 11.9 per cent at constant currency. The Thom Browne segment reported revenues of €113.3 million, up 15.4 per cent YoY, and 16.1 per cent at constant currency, with the brand continuing to grow across all channels.

In Q1 FY23, the Zegna branded products segment saw revenues of €271.9 million, up 21.4 per cent YoY, driven by strong growth in footwear, luxury leisurewear, and made to measure products. Thom Browne revenues were €112.6 million, up 14.9 per cent YoY, with strong revenue growth for women's and children's products outpacing growth for men's products, the company said in a press release.

Textile revenues were €33.8 million in Q1 FY23, up 11.8 per cent YoY, reflecting the broad-based strength of the group's luxury textile platform. Third-party brands were negatively impacted by the expiration of the Tom Ford International distribution licensing agreement, resulting in a 63.5 per cent YoY decrease in revenues of €8.9 million in the first quarter of 2023.

The group's direct-to-customer (DTC) revenues increased by 24.9 per cent YoY for both Zegna and Thom Browne during Q1 FY23. DTC accounted for 64 per cent of the company’s revenues, compared with 58 per cent in the same period last year, consistent with the group's strategic shift towards retail. DTC revenues for Zegna were €229.6 million, up 24.8 per cent YoY, with solid double-digit growth across all regions. DTC revenues for Thom Browne were €42.8 million, up 25.4 per cent YoY.

Wholesale revenues were €154.7 million, down 2.4 per cent YoY, due to the impact from Tom Ford products on the third-party brands and textiles wholesale operations. Wholesale revenues for Zegna branded products were up 5.5 per cent YoY, while Thom Browne wholesale revenues were up 9.3 per cent YoY. Third-party brands and textiles wholesale revenues were down 21.8 per cent YoY.

The group's revenues continued to grow across all key geographies in the first quarter of FY23. Revenues from the Greater China Region were €164.5 million, up 15.9 per cent YoY, and 17.2 per cent YoY at constant currency. Revenues from the Europe, Middle East, and Africa (EMEA) region were €150.1 million, up 11.6 per cent YoY, while North American revenues were €65.6 million, up 6.2 per cent YoY. Revenues from the US grew 1.9 per cent YoY, driven by DTC outperformance for both Zegna and Thom Browne, despite the impact of Tom Ford products.

By the end of fiscal 2025, the company is aiming for annual revenues to exceed €2 billion and for adjusted EBIT margin to reach at least 15 per cent, the released added.

“We started 2023 with an encouraging upswing led by further reopening in the Greater China Region following COVID-19-related restrictions. We also saw robust growth across our business in the US and Europe driven by our own retail. For Zegna, growth was driven by a healthy increase in productivity, which is one of our strategic priorities. This ongoing strength underscores the success of both our brands as well as the value of our vertically integrated luxury textile platform, which has allowed us to scale up our internal manufacturing and production capabilities,” said Ermenegildo Zegna, chairman and CEO of the Zegna Group.

Fibre2Fashion News Desk (DP)