Zegna Group’s Q3 Gross sales Rise; Cites Optimistic Response to Tom Ford Spring 2024

MILAN — Stable development throughout geographies and channels for each the Zegna and Thom Browne labels boosted the Ermenegildo Zegna Group’s preliminary gross sales within the third quarter.

Gildo Zegna, chairman and chief government officer, mentioned that the Tom Ford spring 2024 assortment was nicely obtained, throughout a convention name with analysts on Tuesday to touch upon the quarterly outcomes. Zegna additionally mentioned he had returned a number of instances to China in latest months and cited a rebound in gross sales throughout the board within the first 9 months of the yr inside Better China and an increase in purchases made by Chinese language in different Asian vacation spot cities like Tokyo.

“I feel we might be constructive for the remainder of the yr and the approaching yr 2024,” he mentioned.

A robust set of first-half monetary outcomes, together with a web revenue that greater than doubled, and powerful gross sales in July and August led administration to forecast a “considerably larger” end result within the fourth quarter in comparison with the third quarter.

Throughout the name, the corporate declined to launch new steering figures; nevertheless, it mentioned that the outcomes help the group’s full-year 2023 and midterm outlook. The corporate additionally reiterated that it’s aiming for annual revenues to exceed 2 billion euros and adjusted working revenue to succeed in at the very least 15 p.c of revenues by 2025.

The latter was a forecast first made in Could final yr in the course of the group’s first Capital Markets Day and it excludes the Tom Ford Vogue section, because the investor day was held earlier than The Estée Lauder Firms Inc. acquired the American designer’s firm in November in a deal valued at $2.8 billion. 

The manager mentioned Tom Ford Vogue, following the primary present by Peter Hawkings on Sept. 21 in Milan, is “off to a very good begin.”

“You will notice among the line already in early supply by yearend and we’re enhancing the collections within the shops,” he added, noting that extra data can be divulged in the course of the group’s second Capital Markets Day, deliberate for Dec. 5 on the New York Inventory Trade. The group was publicly listed in New York in December 2021.

Within the third quarter of the yr, the group’s preliminary, unaudited revenues totaled 431.1 million euros, up 20.8 p.c in contrast with 356.9 million euros in 2022.

Throughout the name, the corporate mentioned it was happy with the efficiency of its manufacturers worldwide. Gross sales in Europe, the Center East and Africa fueled development organically, rising 18.5 p.c, whereas North America rose 12.3 p.c, and Latin America was 9 p.c larger. The Asia Pacific area rose 5.4 p.c, pushed largely by Japan, which rocketed 30.9 p.c boosted by a revival of tourism spending. The Better China space trailed, rising simply 3.5 p.c, although administration mentioned it remained assured in its technique there.

Chief monetary and working officer Gianluca Tagliabue mentioned he was constructive on the Chinese language cluster and home buying because the agency continues to cater to the extremely excessive finish within the area.

“We stay strongly constructive on China, which is an important market… we’re in the midst of a change there,” he mentioned, including that the corporate is engaged on organizing occasions and revamping its shops. In South Korea, the place it has been current since 1997, Zegna mentioned that it’s going to now immediately function its South Korean enterprise starting in early 2024.

Within the interval, gross sales of the Zegna section rose 12.7 p.c to 297.8 million euros and Thom Browne section revenues had been up 8.5 p.c to 73.64 million euros. The corporate celebrated Thom Browne’s twentieth anniversary with occasions in boutiques worldwide in the course of the yr. The Tom Ford Vogue section reported gross sales of 74.6 million euros. Direct-to-consumer gross sales rose 12.9 p.c to 281.8 million, whereas wholesale rose 8.1 p.c to 148.2 million. As of Sept. 30, the group had 635 shops, up from 503. This enhance was due largely to the addition of 121 Tom Ford Vogue shops.

The group has been investing in its direct-to-consumer channel, opening shops for the Thom Browne and Zegna items in cities equivalent to Saint Moritz and Copenhagen, and renewing boutiques in Beverly Hills and Florence. In September, Zegna mentioned the group was “nicely forward of plans by way of retailer productiveness,” slated to extend by 50 p.c by 2025.

Administration confirmed the group’s technique to extend advertising and marketing bills into 2024.

In response to questions raised by analysts about forex headwinds, Tagliabue assured that its hedging coverage is well-poised to offset dangers.

The corporate did, nevertheless, launch a disclaimer in its press launched stating that “the group’s medium-term targets assume no main future worsening of the worldwide geopolitical, well being, macroeconomic and monetary markets state of affairs and no different unexpected occasions.”