Ermenegildo Zegna Group Kicks-Off 2023 With Strong First Quarter Revenues¹
Ermenegildo Zegna N.V. (NYSE: ZGN) reported first quarter 2023 revenues of €428.3 million, reflecting a 13.4% year-over-year increase, and a robust 19.1% growth excluding Tom Ford Products. The Group's direct-to-consumer (DTC) revenues surged 24.9%, with strong performance across all regions, notably a 15.9% rise in Greater China. Zegna segment revenues grew by 12.6%, while Thom Browne recorded a 15.4% increase. The company expects to finalize its TOM FORD FASHION transaction with The Estée Lauder Companies in Q2 2023. A dividend of €0.10 per share is anticipated, amounting to approximately €25 million. Zegna aims for annual revenues exceeding €2 billion and an EBIT margin of at least 15% by 2025, contingent upon stable macroeconomic conditions.
- First quarter revenues up 13.4% year-over-year to €428.3 million.
- Excluding Tom Ford Products, revenues increased by 19.1% year-over-year.
- Direct-to-consumer revenues rose by 24.9% across both ZEGNA and Thom Browne.
- Strong geographic growth, particularly in Greater China (+15.9%).
- Zegna segment revenue up 12.6%, with Thom Browne up 15.4% year-over-year.
- Anticipated dividend distribution of €0.10 per share, totaling approx. €25 million.
- Medium-term goal targeting revenues exceeding €2 billion and EBIT margin of at least 15% by 2025.
- Overall revenue growth impacted negatively by Tom Ford Products, affecting sales by 5.6% for the quarter.
- Third-Party Brands revenues down 63.5% year-over-year due to the expired Tom Ford licensing agreement.
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First Quarter 2023 revenues1 of
€428.3 million , up13.4% year-over-year;2 and up13.1% at constant currency.3 Excluding the impact from Tom Ford Products, revenues were up19.1% year-over-year and up18.9% at constant currency. -
Direct-to-Consumer Revenues for both ZEGNA and
Thom Browne rebounded strongly, up24.9% year-over-year and up25.1% at constant currency. -
All regions showed strong underlying momentum, including the
Greater China Region which was up by15.9% year-over-year and up17.2% at constant currency.
Ermenegildo “Gildo” Zegna, Chairman and CEO of the
“The successful ZEGNA rebranding has further embedded the brand as a frontrunner in the luxury market, and a leader in 'quiet luxury.' As we focus on continuing to grow, we remain determined to provide our customers with the best and highest touch client experience – one that they would expect based upon the quality of the products we offer. Motivated by this mission, we launched ZEGNA X, a digital ecosystem and customization tool which bridges the gap between our physical stores and digital channels, allowing our customers to interact with the brand in unprecedented ways.”
He added: “We remain mindful of the ever-changing global environment. As the year progresses, we continue to relentlessly execute Our Road strategy to achieve our medium-term ambitions. Last but not least, we look forward to completing the TOM FORD FASHION business transaction alongside The Estée Lauder Companies, which we anticipate to close in the second quarter and start operating the business under a long-term licensing agreement with The Estée Lauder Companies.”
Select Highlights for the Three Months Ended
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Strong revenue growth
-
The Group recorded revenues of
€428.3 million in the first quarter of 2023, an increase of13.4% year-over-year. Revenue growth was strong across all regions, driven by direct-to-consumer (DTC) strength in both ZEGNA andThom Browne . Both segments saw revenue growth: ZEGNA by12.6% andThom Browne by15.4% year-over-year. The strength of the Group’s DTC channel is a testament to the soundness of the Group’s strategy and the ongoing desirability of its brands. -
The healthy year-over-year progression of Group revenues comes despite the negative impact from Tom Ford Products on overall revenue growth of
5.6% for the quarter. Excluding the impact from Tom Ford Products, revenues for the quarter were up19.1% year-over-year (18.9% at constant currency). During the second quarter of 2023, the Group expects to complete the TOM FORD FASHION business transaction alongside The Estée Lauder Companies and begin operating the TOM FORD FASHION business under a long-term licensing agreement with The Estée Lauder Companies.
-
The Group recorded revenues of
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ZEGNA One Brand and ZEGNA X Launch
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The transition to the ZEGNA One Brand, officially launched in
July 2022 , continues to prove successful, with increased demand for the brand’s iconic products and a solid rebound in the formalwear business. This is driving a healthy uplift in the productivity of our ZEGNA stores which is a key strategic priority for the brand. -
After the early March announcement, on
April 17, 2023 , ZEGNA unveiled its new ZEGNA X digital ecosystem and technology at an event held inMilan in partnership with Microsoft. ZEGNA X includes a set of tools, including a customization tool and our proprietary clienteling app, providing a powerful outreach tool to intercept demand and capitalize on the increasing popularity of ZEGNA collections and iconic products. Revenues generated through outreach represent over45% of the revenues generated by ZEGNA boutiques year to date in 2023. -
In addition, ZEGNA launched a number of collaborations and campaigns which support the amplification of the ZEGNA brand message. These include, among others, the partnership announced in January with the Canadian technical trail-running shoe company
Norda Run , a fall collection presented in February in partnership withLos Angeles -basedThe Elder Statesman , and the ongoing collaboration withReal Madrid for their travel wear.
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The transition to the ZEGNA One Brand, officially launched in
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Thom Browne Returns to New York Fashion Week; TIME 100 influential people
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On
February 14, 2023 ,Thom Browne returned to New York Fashion Week to present its Autumn/Winter 2023 runway collection. The collection received very positive media coverage and reviews across traditional and social media channels, as well as from VIPs and celebrities. All of this reinforces the cultural relevance of the Thom Browne brand on the global fashion scene and beyond while also supporting brand awareness. -
On
April 13, 2023 , Mr. Thom Browne was named in the TIME 100 Most Influential People of 2023 in recognition of his contributions and innovative take on fashion and design in menswear and womenswear.
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On
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Group: warrants redemption
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On
January 26, 2023 , the Company announced the redemption of all the warrants to purchase ordinary shares of the Company that remained outstanding at5:00 p.m. New York City time onFebruary 27, 2023 . This led to an increase in the number of outstanding shares which amounted to 248,563,813 as ofMarch 28, 2023 .
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On
Revenues for the Three Months Ended
For the three months ended
Revenues by Segment
Zegna Segment: For the first quarter 2023, revenues for the Zegna segment amounted to
Thom Browne Segment: Revenues for
Revenues by Product Line
Zegna Branded Products: Revenues for Zegna branded products were
Textile: Textile revenues were
Third-Party Brands: Third-Party Brands were negatively affected by the expiration of the
Revenues by Channel
The Group enjoyed particularly strong DTC revenues, which increased
DTC revenues for ZEGNA were
DTC revenues for
Wholesale revenues were
Third-Party Brands and Textiles wholesale revenues were down
Revenues by Geography
The Group’s revenues continued to grow across all key geographies in the first quarter of 2023 despite the impacts from Tom Ford Products as mentioned above.
Revenues from the
Revenues from the EMEA region were
Revenues from
Dividend and AGM
On
Outlook
On
Next Scheduled Announcement
The next scheduled announcement will be on
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
Unaudited Revenues for the Three Months Ended
Group Revenues by Segment (Unaudited)
|
For the three months ended
|
|
Increase/(Decrease) |
|||||||
(€ thousands, except percentages) |
2023 |
|
2022 |
|
2023 vs 2022 |
|
% |
|
% at constant
|
|
|
Unaudited |
|
Unaudited |
|
|
|
|
|
|
|
Zegna Segment |
319,324 |
|
283,523 |
35,801 |
|
|
|
|
||
of which Tom Ford Products |
4,972 |
|
22,007 |
(17,035) |
|
( |
|
( |
||
Thom Browne Segment |
113,251 |
|
98,128 |
15,123 |
|
|
|
|
||
Eliminations |
(4,263) |
|
(4,072) |
(191) |
|
|
|
n.m. |
||
Total revenues |
428,312 |
|
377,579 |
50,733 |
|
|
|
|
Group Revenues by Sales Channel (Unaudited)
|
For the three months ended
|
|
Increase/(Decrease) |
|||||||
(€ thousands, except percentages) |
2023 |
|
2022 |
|
2023 vs 2022 |
|
% |
|
% at constant
|
|
|
Unaudited |
|
Unaudited |
|
|
|
|
|
|
|
Direct to Consumer (DTC) - Zegna branded products |
229,596 |
|
183,909 |
|
45,687 |
|
|
|
|
|
Direct to Consumer (DTC) - |
42,849 |
|
34,181 |
|
8,668 |
|
|
|
|
|
Total Direct to Customer (DTC) |
272,445 |
|
218,090 |
|
54,355 |
|
|
|
|
|
Wholesale Zegna branded products |
42,293 |
|
40,070 |
|
2,223 |
|
|
|
|
|
Wholesale |
69,703 |
|
63,756 |
|
5,947 |
|
|
|
|
|
Wholesale Third Party Brands and Textile |
42,728 |
|
54,646 |
|
(11,918) |
|
( |
|
( |
|
of which Tom Ford Products |
4,972 |
|
22,007 |
|
(17,035) |
|
( |
|
( |
|
Total Wholesale |
154,724 |
|
158,472 |
|
(3,748) |
|
( |
|
( |
|
Other |
1,143 |
|
1,017 |
|
126 |
|
|
|
|
|
Total revenues |
428,312 |
|
377,579 |
|
50,733 |
|
|
|
|
________________________________________ |
Zegna branded products include apparel, bags, shoes and small and large leather goods, as well as licensed goods and royalties. |
Group Revenues by Geographical Area (Unaudited)
|
For the three months ended
|
|
Increase/(Decrease) |
|||||||
(€ thousands, except percentages) |
2023 |
|
2022 |
|
2023 vs 2022 |
|
% |
|
% at constant
|
|
|
Unaudited |
|
Unaudited |
|
|
|
|
|
|
|
EMEA (1) |
150,108 |
|
134,456 |
|
15,652 |
|
|
|
|
|
of which |
74,434 |
|
64,091 |
|
10,343 |
|
|
|
|
|
of which |
10,381 |
|
10,970 |
|
(589) |
|
( |
|
( |
|
of which MEA (2) |
21,787 |
|
15,037 |
|
6,750 |
|
|
|
|
|
|
65,634 |
|
61,803 |
|
3,831 |
|
|
|
|
|
of which |
58,035 |
|
56,933 |
|
1,102 |
|
|
|
( |
|
|
6,773 |
|
5,665 |
|
1,108 |
|
|
|
|
|
APAC (5) |
205,253 |
|
174,816 |
|
30,437 |
|
|
|
|
|
of which |
164,526 |
|
141,980 |
|
22,546 |
|
|
|
|
|
of which |
18,655 |
|
14,139 |
|
4,516 |
|
|
|
|
|
Other (6) |
544 |
|
839 |
|
(295) |
|
( |
|
( |
|
Total revenues |
428,312 |
|
377,579 |
|
50,733 |
|
|
|
|
________________________________________ |
||
(1) |
EMEA includes |
|
(2) |
MEA includes the |
|
(3) |
|
|
(4) |
|
|
(5) |
APAC includes the |
|
(6) |
Other revenues mainly include royalties. |
Group Revenues by Product Line (Unaudited)
|
For the three months ended
|
|
Increase/(Decrease) |
|||||||
(€ thousands, except percentages) |
2023 |
|
2022 |
|
2023 vs 2022 |
|
% |
|
% at constant
|
|
|
Unaudited |
|
Unaudited |
|
|
|
|
|
|
|
Zegna branded products |
271,889 |
|
223,979 |
|
47,910 |
|
|
|
|
|
|
112,552 |
|
97,937 |
|
14,615 |
|
|
|
|
|
Textile |
33,818 |
|
30,244 |
|
3,574 |
|
|
|
|
|
Third Party Brands |
8,910 |
|
24,402 |
|
(15,492) |
|
( |
|
( |
|
of which Tom Ford Products |
4,972 |
|
22,007 |
|
(17,035) |
|
( |
|
( |
|
Other |
1,143 |
|
1,017 |
|
126 |
|
|
|
|
|
Total revenues |
428,312 |
|
377,579 |
|
50,733 |
|
|
|
|
________________________________________ |
Zegna branded products include apparel, bags, shoes and small and large leather goods, as well as licensed goods and royalties. |
Monobrand(1) Store Network at
|
At |
|
At |
|
At |
|||||||||||||
|
2023 |
|
2022 |
|
2022 |
|||||||||||||
# Stores |
Zegna |
|
Thom
|
|
Group |
|
Zegna |
|
Thom
|
|
Group |
|
Zegna |
|
Thom
|
|
Group |
|
EMEA (2) |
67 |
|
10 |
|
77 |
|
65 |
|
10 |
|
75 |
|
69 |
|
9 |
|
78 |
|
|
54 |
|
7 |
|
61 |
|
53 |
|
7 |
|
60 |
|
50 |
|
5 |
|
55 |
|
APAC |
121 |
|
45 |
|
166 |
|
121 |
|
46 |
|
167 |
|
125 |
|
37 |
|
162 |
|
Total Direct to Customer (DTC) |
242 |
|
62 |
|
304 |
|
239 |
|
63 |
|
302 |
|
244 |
|
51 |
|
295 |
|
EMEA (2) |
58 |
|
6 |
|
64 |
|
57 |
|
6 |
|
63 |
|
88 |
|
5 |
|
93 |
|
|
62 |
|
3 |
|
65 |
|
64 |
|
4 |
|
68 |
|
73 |
|
3 |
|
76 |
|
APAC |
35 |
|
32 |
|
67 |
|
35 |
|
32 |
|
67 |
|
32 |
|
30 |
|
62 |
|
Total Wholesale |
155 |
|
41 |
|
196 |
|
156 |
|
42 |
|
198 |
|
193 |
|
38 |
|
231 |
|
Total |
397 |
|
103 |
|
500 |
|
395 |
|
105 |
|
500 |
|
437 |
|
89 |
|
526 |
________________________________________ |
||
(1) |
Monobrand store count includes our DOSs (which are divided into boutiques and outlets) and our Wholesale monobrand stores (including also monobrand franchisees). |
|
(2) |
Does not include any stores in |
|
(3) |
|
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, 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, foreign exchange losses/(gains) 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 financial 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.
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 and operating performance.
____________________________
1 Throughout this press release, revenues for the first quarter 2023 and the first quarter 2022 are unaudited.
2 Throughout this press release, growth rates refer to year-over-year growth on a current currency basis, unless otherwise indicated.
3 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 7 of this press release for a definition of such non-IFRS financial measure.
4 Adjusted EBIT and Adjusted EBIT Margin are non-IFRS financial measures. See the non-IFRS financial measures section starting on page 7 of this press release for the definition of such non-IFRS financial measures.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230420005922/en/
Investor Relations/Group Communications/Media
francesca.dipasquantonio@zegna.com
+39 335 5837669
clementina.tito@zegna.com
Media
Brunswick Group
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
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FAQ
What were Zegna's first quarter 2023 revenues?
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