Italian fashion brand Ermenegildo Zegna announced unaudited revenue of €1,357.4 million (~$1.47 billion) for the first nine months (9M) of 2024, ended September 30, showing a 1.7 per cent year-on-year (YoY) increase from €1,334.2 million (~$1.44 billion) in the same period in 2023. The Group's organic revenues, however, declined by 4.0 per cent.

Nine months performance by brand and segment

The Zegna brand, which forms the core of the Group's offerings, experienced a 3.4 per cent YoY increase in revenues, reaching €810.6 million (~$875.45 million), up from €783.6 million (~$846.29 million) in 2023. The organic growth for the Zegna brand was 4.8 per cent, highlighting continued demand in key regions like EMEA, the Americas, and Japan. This was driven by robust performance in Direct-to-Consumer (DTC) channels, where the Zegna brand saw a 4.4 per cent revenue growth.

The Thom Browne segment, however, witnessed a sharp decline, with revenues dropping by 21.7 per cent YoY, down to €220.4 million (~$238.03 million) from €281.6 million (~$304.12 million) in 2023. The brand’s performance continued to face headwinds due to a strategic reduction in the wholesale channel and weaker consumer confidence in key regions such as the Greater China Region (GCR).

The Tom Ford Fashion segment reported significant growth in the nine-month period, with revenues surging by 54.4 per cent YoY to €213.9 million (~$231.03 million), up from €138.6 million (~$149.69 million) in 2023. Despite this positive performance, the organic revenues for the brand fell by 3.8 per cent, reflecting varying performance across different sales channels and geographies.

Quarterly performance

In the third quarter of 2024 (Q4 FY24), Group revenues dropped by 7.8 per cent YoY to €397.3 million (~$428.08 million), down from €431.1 million (~$464.59 million) in third quarter of fiscal 2023 (Q3 FY23). Organic revenues declined by 6.7 per cent in the same period.

The Zegna brand saw a slight increase in Q3 FY24, with a 0.9 per cent growth to €244.5 million (~$263.05 million), as compared to €242.3 million (~$260.64 million) in Q3 FY23. However, this was largely driven by DTC channels, with wholesale revenues declining.

Thom Browne, in contrast, faced a substantial drop of 27.4 per cent in Q3 revenues to €53.5 million (~$57.78 million), down from €73.2 million (~$78.05 million) in Q3 FY23, reflecting ongoing challenges, particularly in the wholesale sector, where the brand recorded a 46.0 per cent decline.

Tom Ford Fashion also experienced a 12.2 per cent decline in Q3 revenues, amounting to €65.4 million (~$70.63 million), down from €74.6 million (~$80.56 million) in Q3 FY23. The DTC channel for Tom Ford Fashion grew modestly by 2.5 per cent, offsetting some of the losses in wholesale, which dropped by 29.6 per cent.

Geographic performance and regional insights

Across regions, the EMEA contributed €485.6 million (~$524.45 million) in revenues for the first nine months of 2024, showing a modest growth of 2.2 per cent YoY. However, the organic decline was 1.6 per cent. Q3 performance in the region showed a 2.1 per cent decline in revenues to €149.0 million (~$160.92 million).

In the Americas, the Group saw a strong 15.7 per cent revenue increase in the nine-month period, with total revenues reaching €358.2 million (~$387.24 million). However, Q3 results in this region saw a 6.1 per cent drop, largely attributed to weaker wholesale sales.

The Greater China Region (GCR) remained challenging, with revenues falling by 15.8 per cent to €353.1 million (~$381.35 million) in the first nine months of 2024, representing 26 per cent of the Group’s total revenues. This decline was more pronounced in Q3, with revenues down by 22.8 per cent YoY to €86.8 million (~$93.74 million), reflecting deteriorating consumer confidence.

In APAC (excluding GCR), the Group recorded significant growth, with revenues rising by 23.9 per cent YoY to €158.8 million (~$171.50 million) in the nine-month period. Q3 growth was 6.1 per cent, driven by strong sales in Japan, particularly for Zegna and Thom Browne.

Ermenegildo 'Gildo' Zegna, chairman and CEO of the Ermenegildo Zegna Group, said: “The first nine months of 2024 saw our revenues grow 2 per cent from the same period last year. 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.”

Zegna added “Looking ahead to the fourth quarter of 2024 and into 2025, we continue to foresee an uncertain environment, particularly in the Greater China Region. However, I believe that our Group is fully prepared to face the future with stronger brands, a clearer vision and strengthened management team.”

Fibre2Fashion News Desk (HU)