Ermenegildo Zegna Group Ends FY 2022 With Strong Revenue¹ Growth in Line With Strategic Plan
Ermenegildo Zegna N.V. (NYSE:ZGN) reported preliminary FY 2022 revenues of €1,493 million, reflecting a 15.5% year-over-year increase. Excluding the Greater China Region (GCR), revenues soared 42% year-over-year. However, Q4 2022 revenues dipped slightly to €407 million, a 0.5% decline from the previous year, largely due to COVID-related restrictions in GCR. The Group announced a successful performance across markets, particularly in North America and EMEA, despite challenges. Key highlights include a new partnership with Norda Run and the completion of the acquisition of the TOM FORD fashion business, aiming to bolster their long-term strategy.
- FY 2022 revenues increased by 15.5% year-over-year to €1,493 million.
- Excluding GCR, revenues grew 42% year-over-year.
- Strong growth in North America, with revenues up 54.1% for FY 2022.
- Thom Browne segment revenues increased by 25.3% year-over-year.
- Acquisition of minority stake in Norda Run may accelerate growth.
- Q4 2022 revenues decreased by 0.5% year-over-year, impacted by GCR restrictions.
- End of Tom Ford International distribution license negatively impacted revenue growth by 2.0% in Q4 2022.
- 30.3% decline in GCR revenues for Q4 2022 due to COVID-related restrictions.
-
FY 2022 Revenues1 of
€1,493 million , up15.5% year-over-year, in line with mid-teens guidance; solid double-digit growth in both Zegna andThom Browne segments -
FY 2022 and 4Q 2022 Revenue growth of
42% and24.7% year-over-year2, respectively, excluding theGreater China Region - The Group expects an increase in Cash Surplus3 in the second half of 2022, in line with guidance
-
Early signs of recovery seen in the
Greater China region
Ermenegildo “Gildo” Zegna, Chairman and CEO of the
He added: “2022 was another year of important milestones for the Group. In May, we shared our financial ambitions and sustainability strategy at our very first Capital Markets Day, hosted at Oasi Zegna. In August, we launched a unique partnership with
Select Highlights from the Fourth Quarter of 2022
-
Significant Growth, excluding COVID-related impacts in the
Greater China Region -
Excluding the GCR, global revenues showed significant growth for both 4Q 2022 and FY 2022, at
24.7% and42.0% year-over-year, respectively. Revenue growth was especially strong in theU.S. , even with a particularly strong comparison base in 4Q 2021, reaching26.1% year-over-year for 4Q 2022 and53.5% year-over-year for FY 2022. This comes despite the end of our distribution license withTom Ford International , which resulted in an8% reduction of our revenue growth for 4Q 2022 in theU.S. -
Revenues in
Europe , theMiddle East , andAfrica (EMEA) also continued to grow by double-digits percentage points compared to 4Q 2021, supported by exceptional results from theMiddle East andAfrica (MEA), strong performance inItaly , and consistent performance in other countries inEurope . -
After a positive 3Q, in 4Q 2022 we saw a
30% decline in revenues from the GCR due to a new wave of particularly impactful COVID-related restrictions put in place in October and November, as well as some further unplanned temporary store closures in December due to a wave of contagion. This resulted in 4Q 2022 Group revenues decreasing0.5% year-over-year (2.9% at cFX).
-
Excluding the GCR, global revenues showed significant growth for both 4Q 2022 and FY 2022, at
-
Acquisition of Minority Stake in
Norda Run -
On
January 23, 2023 , Zegna signed an agreement for the acquisition of a minority stake in Canadian technical trail-running shoe companyNorda Run , with the option to gradually increase its stake over the next nine years. The luxury outdoor space continues to be an area of focus for the Group, andNorda Run , which uses the finest materials on the planet to produce the world’s best-performing all-weather footwear, aligns perfectly with Zegna’s values of creating the best products from the best materials. The agreement secures the possibility of accelerating the brand’s growth through a strong industrial and commercial partnership.
-
On
-
Fall 2023 Collection:
Oasi Cashmere and The Elder Statesman Partnership -
The Fall 2023 show, held during Milan Fashion Week earlier this month, focused on Zegna’s iconic Oasi, with
70% of the collection created using Oasi Cashmere. Oasi Cashmere is a central development on Zegna’s Road to Traceability, and we are committed to certifying its fibers as fully traceable by 2024. -
On
January 16, 2023 , Zegna announced a collaboration withLos Angeles -basedThe Elder Statesman , and unveiled some items from the collection, including a tweed cashmere coat, during our Fall 2023 show. The full collection will be presented during Paris Fashion Week at the end of February and will be in stores inSeptember 2023 .
-
The Fall 2023 show, held during Milan Fashion Week earlier this month, focused on Zegna’s iconic Oasi, with
-
Thom Browne Wins Trademark Case; Reaches Agreement to Directly Operate Business in
Korea -
On
January 12, 2023 , a jury found that at no time didThom Browne, Inc. , infringe on any of the trademarks of adidasAmerica, Inc. , in the lawsuit filed by adidas in theU.S. -
Today,
January 25, 2023 ,Thom Browne announced an agreement with its Korean partner of 12 years, Samsung C&T Corporation (“Samsung”), pursuant to whichThom Browne will directly operate its Korean business through a newly formed and wholly owned company, Thom Browne Korea. Thom Browne Korea will assume direct responsibility for all activities within the Korean market, with external support from Samsung. Samsung andThom Browne will continue their successful collaboration through an innovative retail management agreement, effectiveJuly 1, 2023 , through which Samsung will manage Thom Browne’s wholly owned network of 17 stores inKorea .
-
On
Review of Fourth Quarter and Full Year 2022 Preliminary and Unaudited Revenues5
In 4Q 2022,
Revenues by Segment
Zegna: Revenues for the Zegna segment, which includes Zegna-branded products as well as the Textile and Third-Party Brands product lines, reached
Revenues by Product Line
Zegna-Branded Products: Zegna-branded products revenues were
Textile: Textile revenues were up
Third-Party Brands: Third-Party Brands revenues reached
Revenues by Geography
The Group saw significant growth across geographies, excluding the GCR due to the rapidly changing nature of the COVID-19 policies in the region. Excluding the GCR, the Group saw a
Activities in
Group revenues in the GCR were down
Revenues by Channel
In FY 2022, DTC revenues for Zegna-branded products saw an
For FY 2022, wholesale revenues reached
Outlook
The Group expects a moderate improvement in Adjusted EBIT3 and a substantial improvement in Profit for FY 2022 compared to 2021 despite significant headwinds in the GCR. The Group also continues to expect a Cash Surplus increase in the second half of the year, in line with guidance. Medium-term targets remain unchanged as Zegna continues to focus on executing its strategy, targeting
______________________________________
1 Throughout this press release, FY 2022 and 4Q 2022 revenues are preliminary and unaudited.
2 Throughout this press release, revenue growth refers to year-over-year growth.
3 Adjusted EBIT, Adjusted EBIT Margin, and Net Financial Indebtedness/(Cash Surplus) are non-IFRS financial measures. See the Non-IFRS Financial Measures section starting on page 4 of this press release for the definition of such non-IFRS measures.
4 This press release includes information about our revenues measured on a constant currency basis, which is a non-IFRS financial measure. See the Non-IFRS Financial Measures section starting on page 4 of this press release for a definition of such non-IFRS measure.
5 All % changes are calculated on an actual currency exchange rate basis, unless otherwise specified.
6 MEA includes
***
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An online archive of the broadcast will be available on the website shortly after the live call and will be available for twelve months.
***
Next Scheduled Announcement
The next scheduled announcement will be the full-year 2022 earnings on
***
Non-IFRS Financial Measures
Zegna’s management monitors and evaluates operating and financial performance using several non-IFRS financial measures including: adjusted earnings before interest and taxes (“Adjusted EBIT”), Adjusted EBIT Margin, Net Financial Indebtedness/(Cash Surplus) and revenues on a constant currency basis. Zegna’s management believes that these non-IFRS financial measures provide useful and relevant information regarding Zegna’s financial performance and financial condition, and improve the ability of management and investors to assess and compare the financial performance and financial position of Zegna with those of other companies. They also provide comparable measures that facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other strategic and operational decisions. While similar measures are widely used in the industry in which Zegna operates, the financial measures that Zegna uses may not be comparable to other similarly named measures used by other companies nor are they intended to be substitutes for measures of financial performance or financial position as prepared in accordance with IFRS.
Adjusted EBIT and Adjusted EBIT Margin
Adjusted EBIT is defined as profit or loss before income taxes plus financial income, financial expenses, exchange losses and the result from investments accounted for using the equity method, adjusted for income and costs which are significant in nature and that management considers not reflective of underlying operating activities. Adjusted EBIT Margin is defined as Adjusted EBIT divided by revenues of the applicable period.
Zegna’s management uses Adjusted EBIT and Adjusted EBIT Margin for internal reporting to assess performance and as part of the forecasting, budgeting and decision-making processes as they provide additional transparency regarding Zegna’s underlying operating performance. Zegna’s management believes these non-IFRS measures are useful because they exclude items that management believes are not indicative of Zegna’s underlying operating performance and allow management to view operating trends, perform analytical comparisons and benchmark performance between periods and among segments. Zegna’s management also believes that Adjusted EBIT and Adjusted EBIT Margin are useful for investors and analysts to better understand how management assesses Zegna’s underlying operating performance on a consistent basis and to compare Zegna’s performance with that of other companies. Accordingly, management believes that Adjusted EBIT and Adjusted EBIT Margin provide useful information to third-party stakeholders in understanding and evaluating Zegna’s operating results.
Net Financial Indebtedness/(Cash Surplus)
Net Financial Indebtedness/(Cash Surplus) is defined as the sum of financial borrowings (current and non-current), derivative financial instruments, loans, and certain other financial liabilities (recorded within other non-current financial liabilities in the consolidated statement of financial position), net of cash and cash equivalents, derivative financial instruments and certain other current financial assets.
Zegna’s management believes that Net Financial Indebtedness/(Cash Surplus) is useful to monitor the level of net liquidity and financial resources available to Zegna. Zegna’s management believes this non-IFRS measure aids management, investors and analysts to analyze Zegna’s financial position and financial resources available, and to compare Zegna’s financial position and financial resources available with that of other companies.
Constant Currency Information
In addition to presenting our revenues on a current currency basis, we also present certain revenue information on a constant currency basis, which excludes the effects of foreign currency translation from our subsidiaries with functional currencies different from the Euro. We use revenues on a constant currency basis to analyze how our underlying revenues have changed between periods independent of the effects of foreign currency translation.
We calculate constant currency revenues by applying the current period average foreign currency exchange rates to translate prior period revenues of foreign subsidiaries expressed in local functional currencies different than the Euro.
Revenues on a constant currency basis are not a substitute for revenues on a current currency basis or any GAAP-related measures, however, we believe that revenues excluding the impact of foreign currency translation provide additional useful information to management and to investors in analyzing and evaluating our revenues trend.
***
About
Founded in 1910 in Trivero,
***
Forward-Looking Statements
This communication, including the section “Outlook”, contains forward-looking statements that are based on beliefs and assumptions and on information currently available to the Company. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “target,” “seek” or the negative or plural of these words or other similar expressions that are predictions or indicate future events or prospects, although not all forward-looking statements contain these words. Any statements that refer to expectations, projections, or other characterizations of future events or circumstances, including strategies or plans, are also forward-looking statements. These statements involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although the Company believes that it has a reasonable basis for each forward-looking statement contained in this communication, the Company cautions you that these statements are based on a combination of facts and factors currently known and projections of the future, which are inherently uncertain. In addition, risks and uncertainties are described in the Company’s filings with the
***
Fourth Quarter 2022 and FY 2022 - Preliminary Unaudited Group Revenues
Group Revenues by Segment (Unaudited)
(€ thousands, except percentages) |
FY 2022 Preliminary |
|
FY 2021 |
|
△% vs FY 2021 |
|
△% vs FY 2021 at constant currency |
|
4Q 2022 Preliminary |
|
4Q 2021 |
|
△% vs 4Q 2021 |
|
△% vs Q4 2021 at constant currency |
|
Unaudited |
|
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
|
|
|
Revenues |
1,492,840 |
|
1,292,402 |
|
|
|
|
|
406,973 |
|
409,074 |
|
( |
|
( |
Zegna segment |
1,176,706 |
|
1,035,175 |
|
|
|
|
|
334,477 |
|
341,940 |
|
( |
|
( |
|
330,891 |
|
264,066 |
|
|
|
|
|
75,818 |
|
67,997 |
|
|
|
|
Eliminations |
(14,757) |
|
(6,839) |
|
n.m. |
|
n.m. |
|
(3,322) |
|
(863) |
|
n.m. |
|
n.m. |
________________________________________
Note: throughout this section “n.m.” means not meaningful |
Group Revenues by Product Line (Unaudited)
(€ thousands, except percentages) |
FY 2022 Preliminary |
|
FY 2021 |
|
△% vs FY 2021 |
|
△% vs FY 2021 at constant currency |
|
4Q 2022 Preliminary |
|
4Q 2021 |
|
△% vs 4Q 2021 |
|
△% vs Q4 2021 at constant currency |
|
Unaudited |
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
|
|
||
Revenues |
1,492,840 |
|
1,292,402 |
|
15.5 % |
|
11.0 % |
|
406,973 |
|
409,074 |
|
(0.5) % |
|
(2.9) % |
Zegna branded products (1) |
923,942 |
|
847,311 |
|
9.0 % |
|
4.1 % |
|
274,374 |
|
281,952 |
|
(2.7) % |
|
(5.0) % |
|
330,014 |
|
263,397 |
|
25.3 % |
|
20.6 % |
|
75,668 |
|
67,901 |
|
11.4 % |
|
8.6 % |
Textile |
136,769 |
|
102,244 |
|
33.8 % |
|
35.4 % |
|
37,513 |
|
35,042 |
|
7.1 % |
|
7.6 % |
Third Party Brands |
97,792 |
|
74,957 |
|
30.5 % |
|
27.9 % |
|
18,188 |
|
22,403 |
|
(18.8) % |
|
(23.2) % |
Other (2) |
4,323 |
|
4,493 |
|
(3.8) % |
|
(7.5) % |
|
1,230 |
|
1,776 |
|
(30.7) % |
|
(32.1) % |
________________________________________
(1) |
Zegna branded products include apparel, bags, shoes and small and large leather goods, as well as licensed goods and royalties. |
|
(2) |
Other revenues include revenues relating to the Agnona business, which was sold in |
Group Revenues by Geographical Area (Unaudited)
(€ thousands, except percentages) |
FY 2022 Preliminary |
|
FY 2021 |
|
△% vs FY 2021 |
|
△% vs FY 2021 at constant currency |
|
4Q 2022 Preliminary |
|
4Q 2021 |
|
△% vs 4Q 2021 |
|
△% vs Q4 2021 at constant currency |
|
Unaudited |
|
|
|
|
|
|
|
Unaudited |
|
Unaudited |
|
|
|
|
Revenues |
1,492,840 |
|
1,292,402 |
|
|
|
11.0 % |
|
406,973 |
|
409,074 |
|
(0.5) % |
|
(2.9) % |
EMEA (1) |
520,226 |
|
380,325 |
|
|
|
36.2 % |
|
140,400 |
|
114,337 |
|
22.8 % |
|
21.8 % |
of which |
224,342 |
|
158,722 |
|
|
|
41.8 % |
|
53,234 |
|
39,876 |
|
33.5 % |
|
32.1 % |
of which |
53,970 |
|
37,682 |
|
|
|
42.2 % |
|
15,362 |
|
14,064 |
|
9.2 % |
|
8.8 % |
of which MEA (2) |
69,046 |
|
44,236 |
|
|
|
49.6 % |
|
24,047 |
|
17,832 |
|
34.9 % |
|
31.9 % |
|
294,686 |
|
191,283 |
|
|
|
43.2 % |
|
82,406 |
|
65,018 |
|
26.7 % |
|
17.2 % |
of which |
270,312 |
|
176,059 |
|
|
|
42.1 % |
|
76,718 |
|
60,858 |
|
26.1 % |
|
15.8 % |
|
29,889 |
|
19,971 |
|
|
|
33.4 % |
|
10,331 |
|
7,573 |
|
36.4 % |
|
19.5 % |
APAC (5) |
644,802 |
|
696,344 |
|
( |
|
(11.6) % |
|
173,058 |
|
220,934 |
|
(21.7) % |
|
(22.1) % |
of which |
494,110 |
|
588,876 |
|
( |
|
(20.6) % |
|
130,657 |
|
187,459 |
|
(30.3) % |
|
(30.8) % |
of which |
65,445 |
|
55,479 |
|
|
|
23.7 % |
|
20,727 |
|
18,637 |
|
11.2 % |
|
17.7 % |
Other (6) |
3,237 |
|
4,479 |
|
n.m. |
|
n.m. |
|
778 |
|
1,212 |
|
n.m. |
|
n.m. |
_______________________________________
(1) |
EMEA includes |
|
(2) |
|
MEA includes |
(3) |
|
|
(4) |
|
|
(5) |
|
APAC includes the |
(6) |
Other revenues mainly include royalties and certain sales of products from previous seasons collections. |
Group Revenues by Channel (Unaudited)
(€ thousands, except percentages) |
FY 2022 Preliminary |
|
% on Revenues |
|
FY 2021 |
|
% on Revenues |
|
△% vs FY 2021 |
|
△% vs FY 2021 at constant currency |
|
4Q 2022 Preliminary |
|
% on Revenues |
|
4Q 2021 |
|
% on Revenues |
|
△% vs 4Q 2021 |
|
△% vs Q4 2021 at constant currency |
|
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
|
|
|
Unaudited |
|
|
|
|
|
|
Revenues |
1,492,840 |
|
100 % |
|
1,292,402 |
|
|
|
|
|
|
|
406,973 |
|
|
|
409,074 |
|
|
|
( |
|
( |
Direct to Consumer (DTC) - Zegna branded products |
772,505 |
|
|
|
712,862 |
|
|
|
|
|
|
|
230,277 |
|
|
|
245,416 |
|
|
|
( |
|
( |
Direct to Consumer (DTC) - |
145,702 |
|
|
|
138,567 |
|
|
|
|
|
( |
|
42,983 |
|
|
|
47,778 |
|
|
|
( |
|
( |
Total Direct to Consumer (DTC) |
918,207 |
|
62 % |
|
851,429 |
|
|
|
|
|
|
|
273,260 |
|
|
|
293,194 |
|
|
|
( |
|
( |
Wholesale Zegna branded products |
151,437 |
|
|
|
134,449 |
|
|
|
|
|
|
|
44,097 |
|
|
|
36,536 |
|
|
|
|
|
|
Wholesale |
184,312 |
|
|
|
124,830 |
|
|
|
|
|
|
|
32,685 |
|
|
|
20,123 |
|
|
|
|
|
|
Wholesale Third Party Brands and Textile |
234,561 |
|
|
|
177,201 |
|
|
|
|
|
|
|
55,701 |
|
|
|
57,445 |
|
|
|
( |
|
( |
Total Wholesale |
570,310 |
|
38 % |
|
436,480 |
|
|
|
|
|
|
|
132,483 |
|
|
|
114,104 |
|
|
|
|
|
|
Other (1) |
4,323 |
|
— % |
|
4,493 |
|
—% |
|
n.m. |
|
n.m. |
|
1,230 |
|
—% |
|
1,776 |
|
—% |
|
n.m. |
|
n.m. |
________________________________________
(1) |
Other revenues include revenues relating to the Agnona business, which was sold in |
***
Group Monobrand(1) Store Network as of
|
As of |
|
As of |
||||||||
# Stores |
Zegna |
|
|
|
|
|
Zegna |
|
|
|
|
EMEA |
65 |
|
10 |
|
75 |
|
69 |
|
9 |
|
78 |
|
53 |
|
7 |
|
60 |
|
50 |
|
5 |
|
55 |
APAC |
121 |
|
46 |
|
167 |
|
126 |
|
38 |
|
164 |
Total Direct to Customer (DTC) |
239 |
|
63 |
|
302 |
|
245 |
|
52 |
|
297 |
EMEA (3) |
57 |
|
6 |
|
63 |
|
89 |
|
5 |
|
94 |
|
64 |
|
4 |
|
68 |
|
74 |
|
3 |
|
77 |
APAC |
35 |
|
32 |
|
67 |
|
32 |
|
30 |
|
62 |
Total Wholesale |
156 |
|
42 |
|
198 |
|
195 |
|
38 |
|
233 |
Total |
395 |
|
105 |
|
500 |
|
440 |
|
90 |
|
530 |
________________________________________
(1) |
Monobrand store count includes our DOSs (which are divided into boutiques and outlets) and our Wholesale monobrand stores (including also monobrand franchisees). |
|
(2) |
|
|
(3) |
|
Does not include any stores in |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230125005186/en/
Investor Relations/Group Communications
francesca.dipasquantonio@zegna.com
+39 335 5837669
clementina.tito@zegna.com
Media
briley@brunswickgroup.com / ddanelli@brunswickgroup.com / mjensen@brunswickgroup.com
+1 (917) 755-1454 / +39 348 635 1149 / +33 (0) 6 49 09 39 54
Community
+39 335 6509552
Source:
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