While Ermenegildo Zegna’s turnover, driven by its eponymous brand, held up rather well in 2024, despite a sluggish Chinese market, its profit fell sharply. Its Thom Browne and Tom Ford Fashion brands thus increased their losses.
Zegna, the Italian menswear group that owns the eponymous brand as well as Thom Browne and Tom Ford Fashion, unveiled mixed results for 2024 on March 27.
Resilient sales, sharp drop in profits
Its turnover figures certainly show a slight increase (+2.2% and 3.4% at constant exchange rates), but an organic decrease of -1.9% to 1.95 billion euros. Its profit figures have plummeted by 33% 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.
On the other hand, the group’s gross margin improved, rising from 64.3% to 66.6%. Meanwhile, the adjusted earnings before interest and taxes (EBIT), down 16% to 184 million euros, is higher than the consensus of analysts, who were rather expecting around 175 million euros.
Gradual progress expected
However, during the conference call on the results, Gildo Zegna, the group’s chairman, acknowledged that “we cannot be fully satisfied with the figures we are presenting today”. While saying that he and his teams were “on the whole positive”, he warned that “but progress will be gradual”…
The executive also detailed the performance of his brands, with Zegna’s dynamism offsetting the slump at Thom Browne and Tom Ford Fashion.
With a (year-on-year) increase in sales of 2% to 1.348 billion euros and despite a slight drop (-3%) in its adjusted Ebit to 188 million euros), “ZEGNA was the driving force” of the group in 2024, “thanks to the brand’s distinctive competitive advantage and the management’s commitment to results,” Gildo Zegna emphasized in the press release. “We have maintained a very disciplined approach, focusing on key projects and investments that enhance the brand’s attractiveness while ensuring strict cost control.”
Thom Browne in a bad way
On the other hand, Thom Browne’s turnover plummeted by 17.2% (year-on-year) to around 315 million euros, weighed down by its wholesale business (-34%). Its adjusted EBIT was even more impacted (-54% to 27.3 million euros!) and an adjusted EBIT margin of 8.7%, compared to 15.5% in 2023. “This decrease is the consequence of the decline in turnover and the investments made to strengthen the retail organization,” explains the group.
According to Gildo Zegna, “Thom Browne’s operational performance reflects” the group’s “strategic decision” to rationalize the wholesale channel while strengthening customer focus through direct-to-consumer sales.
While wholesale revenues remained weak in the first quarter of 2025, the group expects this to change over the course of the year, with Thom Browne aiming to target local markets in the EMEA region and the United States.
Tom Ford: an auspicious first Haider Ackermann show
For its part, the turnover of Tom Ford certainly soared by 34% (year-on-year) to 315 million euros. But its adjusted EBIT plummeted considerably, with losses increasing from 1.7 million euros in 2023 to 10.1 million euros in 2024!
The group explains this by “investments 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”. Among the talents mentioned, Tom Ford is now counting on his new designer, Haider Ackermann, whose first collection was shown last March at Paris Fashion Week, to give the company a new impetus.
“TOM FORD FASHION has continued on its path towards realizing its full potential 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,” says Gildo Zegna.
Headwinds and tailwinds
Geographically, Zegna continues to face both headwinds and tailwinds.
On the headwinds side, sales in China fell by 14.5% (year on year) to around 509 million euros. And the improvement is not yet on the radar. “The situation in Hong Kong is very difficult and I think China will be negative in 2025,” said Gildo Zegna.
On the side of tailwinds in 2024, an increase of 15.4% to 525 million euros was recorded in the Americas. In 2025, however, the increase in customs duties in the United States could upset Zegna’s trajectory… “Our clientele is generally resilient and we remain positive in the United States, even if the situation is slightly different in Canada,” explained Carlo Zegna.
He also mentioned the United Arab Emirates as an increasingly buoyant territory, particularly Dubai, one of the best performers in the EMEA zone. He emphasized the ‘importance of personalization’ in this region. It is therefore no coincidence that Zegna has chosen Dubai to stage its first ever fashion show outside Milan on June 11th. Overall, the EMEA region grew by 3.3% last year to more than 680 million euros.
Voluntarism and caution
The group is now approaching the future with a mixture of proactivity and caution.
“Looking ahead to 2025, we recognize the importance of maintaining a cautious approach while remaining committed to the successful completion of our projects,” 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.
In the longer term, the group expects a gradual improvement in its performance, with an average increase of 4 to 7% per year in its revenues until 2027. By that date, they should be in a range of 2.2 billion to 2.4 billion euros. Adjusted EBIT should reach 250 to 300 million euros. “We are fully committed and working to make these goals a reality,” said Carlo Zegna.
In the meantime, the group has proposed a dividend of €0.12 per ordinary share.
Read also > Zegna suffered in the first half of 2024
Featured photo: © Zegna
