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Zegna<\/b>, the Italian menswear group that owns the eponymous brand<\/b> as well as Thom Browne and Tom Ford Fashion<\/b>, unveiled mixed results for 2024 on March 27.<\/p>\n
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Its turnover figures<\/b> certainly show a slight increase (+2.2% and 3.4% at constant exchange rates)<\/b>, but an organic decrease of -1.9%<\/b> to 1.95 billion euros. Its profit figures<\/b> have plummeted by 33%<\/b> to 90.9 million euros. To explain this underperformance, the group cites the combination of increased marketing expenses, investments in its own distribution network, personnel and future growth initiatives, but also higher depreciation.<\/p>\n<\/p>\n
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On the other hand, the group’s gross margin<\/b> improved, rising from 64.3% to 66.6%<\/b>. Meanwhile, the adjusted earnings before interest and taxes (EBIT), down 16%<\/b> to 184 million euros, is higher than the consensus of analysts<\/b>, who were rather expecting around 175 million euros.<\/p>\n
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However, during the conference call on the results, Gildo Zegna, the group’s chairman<\/b>, acknowledged that \u201cwe cannot be fully satisfied with the figures we are presenting today<\/b>\u201d. While saying that he and his teams were \u201con the whole positive\u201d, he warned that \u201cbut progress will be gradual<\/b>\u201d…<\/p>\n
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The executive also detailed the performance of his brands, with Zegna’s dynamism offsetting the slump at Thom Browne and Tom Ford Fashion<\/b>.<\/p>\n
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With a (year-on-year) increase in sales of 2%<\/b> to 1.348 billion euros and despite a slight drop (-3%) in its adjusted Ebit to 188 million euros), “ZEGNA was the driving force<\/b>\u201d of the group in 2024, \u201cthanks to the brand’s distinctive competitive advantage and the management’s commitment to results,\u201d Gildo Zegna emphasized in the press release. \u201cWe have maintained a very disciplined approach, focusing on key projects and investments that enhance the brand’s attractiveness while ensuring strict cost control.\u201d<\/p>\n
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On the other hand, Thom Browne’s turnover plummeted by 17.2%<\/b> (year-on-year) to around 315 million euros, weighed down by its wholesale business (-34%). Its adjusted EBIT was even more impacted (-54%<\/b> to 27.3 million euros!) and an adjusted EBIT margin of 8.7%, compared to 15.5% in 2023. \u201cThis decrease is the consequence of the decline in turnover and the investments made to strengthen the retail organization,\u201d explains the group.<\/p>\n
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According to Gildo Zegna, \u201cThom Browne’s operational performance reflects\u201d the group’s \u201cstrategic decision\u201d to rationalize the wholesale channel<\/b> while strengthening customer focus through direct-to-consumer sales.<\/p>\n
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While wholesale revenues remained weak in the first quarter of 2025<\/b>, the group expects this to change over the course of the year<\/b>, with Thom Browne aiming to target local markets in the EMEA region and the United States.<\/p>\n
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For its part, the turnover of Tom Ford<\/b> certainly soared by 34%<\/b> (year-on-year) to 315 million euros. But its adjusted EBIT plummeted considerably<\/b>, with losses increasing from 1.7 million euros in 2023 to 10.1 million euros in 2024!<\/p>\n
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The group explains this by \u201cinvestments in talent, both at headquarters and regionally, in the store network and the strengthening of various commercial functions, including compliance and IT, all of which will support the brand’s future growth\u201d. Among the talents mentioned, Tom Ford is now counting on his new designer, Haider Ackermann,<\/b> whose first collection was shown last March at Paris Fashion Week, to give the company a new impetus.<\/p>\n
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\u201cTOM FORD FASHION has continued on its path towards realizing its full potential<\/b> with a clear understanding of its key priorities. The recent, unanimously acclaimed fashion show, the first under the direction of Haider Ackermann, is fully in line with this direction and confirms that our path is well defined,\u201d says Gildo Zegna.<\/p>\n
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Geographically<\/b>, Zegna continues to face both headwinds and tailwinds.<\/p>\n
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On the headwinds side, sales in China fell by 14.5%<\/b> (year on year) to around 509 million euros. And the improvement is not yet on the radar. \u201cThe situation in Hong Kong is very difficult and I think China will be negative in 2025<\/b>,\u201d said Gildo Zegna.<\/p>\n
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On the side of tailwinds in 2024, an increase of 15.4%<\/b> to 525 million euros was recorded in the Americas.<\/b> In 2025, however, the increase in customs duties in the United States<\/b> could upset Zegna’s trajectory… \u201cOur clientele is generally resilient and we remain positive in the United States<\/b>, even if the situation is slightly different in Canada,\u201d explained Carlo Zegna.<\/p>\n
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He also mentioned the United Arab Emirates as an increasingly buoyant territory, particularly Dubai<\/b>, one of the best performers in the EMEA zone. He emphasized the \u2018importance of personalization\u2019 in this region. It is therefore no coincidence that Zegna has chosen Dubai to stage its first ever fashion show outside Milan<\/b> on June 11th. Overall, the EMEA region grew by 3.3%<\/b> last year to more than 680 million euros.<\/p>\n
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The group is now approaching the future with a mixture of proactivity and caution.<\/p>\n
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\u201cLooking ahead to 2025<\/b>, we recognize the importance of maintaining a cautious approach while remaining committed to the successful completion of our projects<\/b>,\u201d explains Carlo Zegna. In the current context, in particular, protecting the identity of our brands remains our top priority. We will do this with discipline, agility and by focusing on realizing our vision while creating value for our stakeholders.<\/p>\n
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In the longer term, the group expects<\/b> a gradual improvement in its performance, with an average increase of 4 to 7% per year in its revenues until 2027.<\/b> By that date, they should be in a range of 2.2 billion to 2.4 billion euros. Adjusted<\/b> EBIT should reach 250 to 300 million euros<\/b>. \u201cWe are fully committed and working to make these goals a reality,\u201d said Carlo Zegna.<\/p>\n
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In the meantime, the group has proposed a dividend of \u20ac0.12 per ordinary<\/b> share.<\/p>\n
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