- First half 2023 Revenues1 reach €903 million, up 23.9%
year-over-year.
- Organic growth2 was 21.5% in the first half of 2023, with
double-digit organic growth for both the Zegna and Thom Browne
segments.
- Acceleration in the second quarter with year-over-year
growth of 35.1% and organic growth of 24.5%, led by solid
double-digit organic performance in all major geographies and
notable strength in the US.
- Direct-to-consumer year-over-year growth (36.3% for the
first half and 48.1% for the second quarter of 2023) continues to
be dynamic across all regions for Zegna and Thom Browne, with both
posting organic growth of around 30% for the first half of 2023 and
of 36.2% and 33.7% in the second quarter of 2023,
respectively.
- Robust first half supports the Group’s FY 2023 and mid-term
outlook.
Ermenegildo Zegna N.V. (NYSE:ZGN) (“Zegna Group,” the “Group,”
“Zegna,” or the “Company”), owner of the ZEGNA and Thom Browne
brands and exclusive licensee for the TOM FORD fashion business
(“TOM FORD FASHION”), today announced preliminary unaudited
revenues of €903 million for the first half of 2023, an increase of
23.9% year-over-year. Revenues at constant currency3 were up 24.7%,
and organic growth was 21.5%. Revenues for the first half of 2023
reflect the consolidation of Tom Ford International LLC starting
from April 29, 2023, as well as the consolidation of Pelletteria
Tizeta S.r.l., (which was previously accounted for using the equity
method), as of the same date.
Unaudited revenues for the second quarter of 2023 were €475
million, an increase of 35.1% year-over-year. For the same period,
revenues at constant currency were up 37.4%, and organic growth was
24.5%, representing an acceleration compared to the 18.9% organic
growth recorded in the first quarter of 2023.
Ermenegildo “Gildo” Zegna, Chairman and CEO of the Zegna Group,
said: “The second quarter of 2023 has built on the Group’s
excellent performance since the beginning of the year. Our brands
continue to resonate strongly with customers worldwide, with a
positive rebound in China in the first half of the year, our
persistent strength in EMEA, and our outstanding performance in the
U.S. market.”
“I am particularly pleased that we are gaining market share, and
I am confident about the strong opportunities ahead as the menswear
segment grows globally with both existing and new audiences. Our
ZEGNA, Thom Browne, and TOM FORD FASHION brands all offer
distinctive styles that cater to a wide range of shoppers and
occasions, allowing us to be leaders across the luxury market. The
strong execution of the One Brand strategy has made ZEGNA a global
favorite, with successful collections which include staple Luxury
Leisurewear items and our signature Triple Stitch™ sneaker. At Thom
Browne, the work being done to strengthen womenswear continues to
show great progress and the category is now outpacing the growth of
menswear. Meanwhile, we have started our journey to make TOM FORD
FASHION among the top ten luxury fashion names in the world. The
Group’s financial progress underpins our confidence that we are
comfortably on track to meet our previously announced 2025
financial ambitions.”
“I would also like to welcome Lelio Gavazza to the Zegna Group
as Chief Executive Officer of TOM FORD FASHION. As we continue the
integration of TOM FORD FASHION into the Group, I look forward to
working with Lelio once he starts his new role in September. In
partnership with the Estée Lauder Companies, we will build upon
Tom’s legacy to grow this iconic, one-of-a-kind luxury brand
globally.”
“Finally, our family’s commitment to social responsibility over
113 years was once again highlighted last week when we celebrated
the 10th anniversary of the Ermenegildo Zegna Founder’s
Scholarship, which enables Italian graduates to pursue their
postgraduate studies abroad and return home. This program is a
particular point of pride for me as it brings back Italian talents
to contribute to the future of Italy.”
________________________________
1 Throughout this press release, revenues
for the first half of 2023 and the second quarter of 2023 are
preliminary and unaudited.
2 Organic growth is a non-IFRS financial
measure. See the Non-IFRS Financial Measures section starting on
page 12 of this press release for the definition of such non-IFRS
financial measure and a reconciliation to the most directly
comparable IFRS measure.
3 Revenue growth at constant currency is a
non-IFRS financial measure. See the Non-IFRS Financial Measures
section starting on page 12 of this press release for the
definition of such non-IFRS financial measure.
Highlights from the Second Quarter of
2023 and Recent Events
- ZEGNA: Oasi di Lino, New Store Openings and Agreement with
GBB
- On June 19, during Milan men’s fashion week, ZEGNA brought Oasi
Zegna to Piazza San Fedele in the heart of Milan. The brand’s
collection showcased and was inspired by L’Oasi di Lino, a fabric
made in Italy from flax plants grown in Normandy, France. Zegna
commits to certifying Oasi Lino fibers as 100% traceable by
2024.
- In the first half of the year, ZEGNA opened seven net new
direct-to-consumer stores, bringing the total to 246. Store
productivity also increased meaningfully over that period, driven
by several factors including higher traffic, an increase in the
number of transactions and in the average ticket, and store
right-sizing.
- On July 26, 2023, Zegna granted Give Back Beauty International
SA exclusivity for the manufacture and sale of "Zegna” branded
fragrances and cosmetics.
- Thom Browne: Paris Couture Debut and New Store Openings
- On July 3, Thom Browne presented a unique, highly anticipated
Haute Couture collection in Paris, celebrating the brand’s 20th
anniversary. The collection, which reflected the brand’s vision and
Thom’s singular style, has received praise from critics, the media,
celebrities and couture clients.
- In the first half of the year, Thom Browne opened three net new
direct-to-consumer stores, bringing the total to 66, up from 53 a
year ago and 63 as of December 31, 2022. The three new stores in
the APAC region – two in China and one in Japan – highlight the
importance of the region to the brand and Thom Browne’s continued
success and desirability.
- As of July 1, Thom Browne began directly operating its Korean
business and its network of 17 stores. The business is now wholly
owned through Thom Browne Korea, a newly formed and wholly owned
company, and will be operated in the region with external support
from Samsung, previously its franchise partner.
- TOM FORD FASHION: Acquisition Completed, License Begins and
New CEO Appointed
- On April 28, Zegna Group completed the acquisition of Tom Ford
International LLC, the company that owns and operates TOM FORD
FASHION. Upon closing, Zegna became a long-term licensee of The
Estée Lauder Companies, the sole owner of TOM FORD brand,
trademarks and other intellectual property rights, for all TOM FORD
men’s and women’s fashion as well as accessories and underwear,
fine jewelry, childrenswear, textile, and home design
products.
- On July 18, the appointment of Lelio Gavazza as the new CEO of
TOM FORD FASHION was announced and he will be starting his role on
September 18, 2023.
- The addition of TOM FORD FASHION brings 51 direct-to-consumer
and 70 monobrand wholesale locations to the Group’s network across
the U.S., Europe, and APAC.
- Peter Hawkings’ debut Womenswear fashion collection for
Spring/Summer 2024 will take place in Milan during Fashion Week in
September 2023.
- Our Road to Sustainability: SBTi Targets Approval and Animal
Welfare Policy
- In August 2022, Zegna Group submitted its greenhouse gas
emissions reduction targets to the Science-Based Targets initiative
(SBTi), which approved the targets in May 2023. The Group is
targeting net-zero greenhouse gas emissions (GHG) across its value
chain by 2050 from a 2021 base year. In the near term, the Group
has committed to reducing absolute scope 3 GHG emissions from
purchased goods and services, fuel and energy-related activities,
employee commuting, and investments by 50.4% by 2032.
- On May 17, Zegna Group adopted its new animal welfare policy as
part of its commitment to creating the best products from the
highest-quality materials while ensuring the well-being and
longevity of the natural environment and its inhabitants.
- Made in Italy Luxury Textile Laboratory Platform:
Acquisition of Minority Stake in Luigi Fedeli e Figlio
- On June 6, Zegna Group and Prada Group announced the
acquisition of 30% of Luigi Fedeli e Figlio, the world-renowned
maker of fine Italian knitwear and yarns, with each group acquiring
15% of the company. The historic Italian company’s focus on quality
and sustainability aligns perfectly with Zegna Group’s values and
commitment to preserving and enhancing the craftsmanship of Made in
Italy. This transaction is subject to customary closing conditions,
including antitrust approvals.
Review of Revenues for the First Half
2023 and the Second Quarter 2023
In the second quarter of 2023, Zegna Group generated revenues of
€475 million, an increase of 35.1% year-over-year. At constant
currency, revenues grew 37.4%. Organic growth for the period was
24.5%.
Revenues by Segment
Zegna Segment: For the second quarter of 2023, revenues
for the Zegna segment amounted to €332 million, growing by 23.4%
year-over-year and 25.2% at constant currency. Organic growth was
28.2%. This brought revenues for the first half of the year to €652
million, up 17.9% from the first half of last year, and up 18.4% at
constant currency. Organic growth for the first half of 2023 was
23.8%. The segment’s growth was driven by the very strong
performance of Zegna-branded products in the quarter, particularly
in direct-to-consumer, as well as a positive contribution from the
Textile product line.
Thom Browne Segment: For the second quarter of 2023,
revenues for the Thom Browne segment amounted to €95 million,
growing by 8.1% year-over-year and with constant currency and
organic growth of 10.8%. This brought Thom Browne segment revenues
for the first half of the year to €208 million, up 11.9% from the
first half of last year, and 13.6% constant currency and organic
growth.
The growth of the Thom Browne segment in the second quarter of
2023 was driven by robust direct-to-consumer performance, which
offset the slight decline in wholesale. On top of comparable stores
growth, direct-to-consumer performance was also supported by the
expansion of the brand’s store network, which added 13 net new
stores since June 30, 2022.
Tom Ford Fashion Segment: Effective April 29, 2023,
concurrently with the consolidation of Tom Ford International LLC
in the Group’s financial statements, Tom Ford Fashion represents as
a new operating and reporting segment of the Group. The Tom Ford
Fashion segment includes all activities related to TOM FORD
FASHION, from collection creation and development to merchandising,
through to production, as well as retail and wholesale
distribution. From April 29, 2023 to June 30, 2023, the segment
reported revenues of €64 million.
Revenues by Product Line
Zegna-branded Products: Revenues for Zegna-branded
products were at €269 million for the second quarter, up 33.9%
year-over-year, with constant currency and organic growth of 37%.
This brought first-half revenues for Zegna-branded products to €541
million, up 27.3% year-over-year, and with constant currency and
organic growth of 28.4%.
The Made-to-Measure business continued to perform well, and
together with sneakers and luxury leisurewear, have all shown
consistent growth.
Thom Browne: Revenues for Thom Browne were at €94 million
for the quarter, up 8.2% year-over-year, and with 11% constant
currency and organic growth. This brought first half revenues for
Thom Browne to €207 million, up 11.8% year-over-year, and 13.4%
constant currency and organic growth.
The growth in Thom Browne revenues came from all product
categories, with womenswear outperforming men’s and kid’s products
also being a dynamic performer.
Textile: Textile revenues were flat at €39 million during
the second quarter of 2023 compared to the prior year. This brought
first half revenues to €73 million, up 6% year-over-year, 5.2% in
constant currency. Organic growth for the first half was 5.3%.
Third-Party Brands: The performance in the second quarter
of the Third-Party Brands product line reflects the end of the Tom
Ford International distribution license. Revenues for the second
quarter of 2023 were €6.6 million, down 71.4% year-over-year,
-71.8% in constant currency, and -30.7% organic growth impacted by
Tom Ford Products4, which starting from April 29, 2023, are
reported as intercompany revenues, as a result of the acquisition
of Tom Ford International LLC on April 28, 2023.
Revenues by Channel
The direct-to-consumer channel’s momentum was robust across both
Zegna and Thom Browne, which reported in the second quarter of
2023, year-over-year growth of 32.7% and 25.3% respectively, and
36.2% and 33.7% year-over-year constant currency and organic
growth, respectively. The strong global direct-to-consumer
performance of Zegna branded products was driven by double-digit
growth across all regions, and it was met by a remarkable
improvement in retail productivity at the brands’ boutiques. Thom
Browne benefitted from the expansion of its store network, as well
as double-digit comparable store growth.
In the second quarter of 2023, Zegna’s branded products
wholesale channel showed robust growth of 42.8% year-over-year and
43.0% constant currency and organic growth. Meanwhile, the Thom
Browne segment wholesale activity was down 1.7% year-over-year for
the quarter and with constant currency and organic growth down
1.5%, including the effects of lower deliveries during the quarter
to the South Korean market, which, as previously announced, is
directly operated as of July 1, 2023.
Revenues by Geography
The Group saw robust global growth across all regions during the
second quarter of 2023, driven by all geographies.
Early signs of strong activity from Chinese consumers drove
growth in the Greater China Region. Revenues from the region were
exceptionally strong at €142 million, up 35.3% year-over-year for
the quarter, or 42.0% at constant currency and 40.0% organic
growth. The growth is especially strong in comparison to last year,
which was adversely impacted by Covid-19-related restrictions.
Sales in Hong Kong and Macau were particularly strong thanks to the
healthy recovery in direct-to-consumer activity. The resumption of
Chinese tourism, particularly to other Asian countries, is starting
to show results, with strong year-over-year reported growth in
Southeast Asia and 30.1% year-over-year reported growth (36.8%
constant currency and 23.9% organic growth) in Japan.
Group revenues from the EMEA region for the second quarter were
at €173 million, up 36.8% year-over-year, 37.9% in constant
currency. Organic growth for the quarter was at 24.5%. Both the UAE
and Europe performed exceptionally well, especially in Zegna
direct-to-consumer, benefitting from both domestic and tourist
customers. Growth in the region was underpinned by the strong
performance in the UAE, where revenues grew by 49.4%
year-over-year, 53.1% at constant currency and 50.8% organic
growth. EMEA revenues for the first half of the year were at €323
million, up 23.8% year-over-year, 24.2% at constant currency, and
21.4% organic growth.
In the U.S., revenues were at €99 million for the quarter, up
46.5% year-over-year, and 45.3% in constant currency. Organic
growth for the quarter was at 13.9%. This brought first-half
revenues in the U.S. to €157 million, up 26.1% year-over-year,
22.9% in constant currency, and 12.5% organic growth. In the first
half, the U.S. benefited from the contribution of the Tom Ford
Fashion segment’s 11 directly operated stores, as well as solid
double-digit performance in the Zegna and Thom Browne
direct-to-consumer channels.
In Latin America, the Group’s revenues reached €9 million for
the quarter, up 30.7% year-over-year, and with 23.9% constant
currency and organic growth, driven by revenues from Zegna’s
direct-to-consumer business in Mexico.
________________________________
4 As previously disclosed, the licensing
agreement for the production and worldwide distribution of luxury
men’s ready-to-wear and made-to-measure clothing, footwear, and
accessories under the TOM FORD brand expired with the deliveries of
the Fall/Winter 2022 collection, and a supply agreement to act as
the exclusive supplier for certain TOM FORD menswear products
commenced starting with the Spring/Summer 2023 collection.
Outlook
On May 17, 2022, at its first Capital Markets Day, the Group
announced its financial goals for the medium term, which management
defines as the end of fiscal year 2025. Within this time frame, the
Group is aiming for annual revenues to exceed €2 billion and for
Adjusted EBIT Margin to reach at least 15%, excluding the Tom Ford
Fashion segment. The Group’s 1H 2023 revenues show that the Group
is on this trajectory, and the forthcoming first half 2023 and
full-year 2023 results should comfortably confirm this. The Group’s
medium-term targets assume no further future escalation of the war
in Ukraine, no significant macroeconomic or financial markets
deterioration, no further disruption linked to the COVID-19
pandemic in the GCR or elsewhere, and no other unforeseen
events.
***
Next Scheduled
Announcement
The next scheduled announcement will be on September 13, 2023,
in connection with the release of the Group’s semi-annual condensed
consolidated financial statements at and for the six months ended
June 30, 2023. To receive email alerts of the timing of future
financial news releases, as well as future announcements, please
register at https://ir.zegnagroup.com.
***
About Ermenegildo Zegna Group
Founded in 1910 in Trivero, Italy, the Ermenegildo Zegna Group
(NYSE: ZGN) is a leading global luxury group. The Group is the
owner of the world-renowned ZEGNA and Thom Browne brands, and
operates TOM FORD FASHION through an exclusive long-term license
agreement with The Estée Lauder Companies Inc. The Group also
manufactures and distributes the highest quality fabrics and
textiles through its Luxury Textile Laboratory Platform. At the
Group’s core is a uniquely vertically integrated supply chain that
brings together the best of Italian fine craftsmanship.
Responsibility towards people, community and the natural world has
been at the heart of the Ermenegildo Zegna Group’s belief since its
founding. At the end of 2022, Ermenegildo Zegna Group had more than
6,000 employees and for the year ended December 31, 2022 had
revenues of approximately €1.5 billion.
***
***
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 SEC.
These filings may identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Most of these factors are outside the Company’s control and are
difficult to predict. In light of the significant uncertainties in
these forward-looking statements, you should not regard these
statements as a representation or warranty by the Company and its
directors, officers or employees or any other person that the
Company will achieve its objectives and plans in any specified time
frame, or at all. The forward-looking statements in this
communication represent the views of Zegna as of the date of this
communication. Subsequent events and developments may cause that
view to change. However, while Zegna may elect to update these
forward-looking statements at some point in the future, the Company
disclaims any obligation to update or revise publicly
forward-looking statements. You should, therefore, not rely on
these forward-looking statements as representing the views of the
Company as of any date subsequent to the date of this
communication.
***
Second Quarter 2023 and First Half 2023
- Preliminary Unaudited Group Revenues
Group Revenues by Segment (Preliminary
and Unaudited)
H1 2023 vs H1 2022
Q2 2023 vs Q2 2022
(€ thousands, except percentages)
H1 2023
H1 2022
Reported Revenues
Constant Currency
Organic Growth
Q2 2023
Q2 2022
Reported Revenues
Constant Currency
Organic Growth
Revenues
903,059
728,993
23.9%
24.7%
21.5%
474,747
351,414
35.1 %
37.4 %
24.5 %
Zegna segment
651,755
552,966
17.9%
18.4%
23.8%
332,431
269,443
23.4 %
25.2 %
28.2 %
Thom Browne segment
207,959
185,769
11.9%
13.6%
13.6%
94,708
87,641
8.1 %
10.8 %
10.8 %
Tom Ford Fashion segment
64,027
—
n.m.
n.m.
n.m.
64,027
—
n.m.
n.m.
n.m.
Eliminations
(20,682)
(9,742)
n.m.
n.m.
n.m.
(16,419)
(5,670)
n.m.
n.m.
n.m.
___________________________________
(*) Throughout this section “n.m.” means
not meaningful
The tables below show a reconciliation of revenue growth for the
six months ended June 30, 2023 and for the three months ended June
30 and March 31, 2023 to organic growth for the same periods by
segment and at the Group level.
H1 2023 vs H1 2022
Revenues Growth
Foreign exchange
Acquisitions and
disposals
Structural changes in license
agreements where Zegna operates as a licensee
Organic Growth
Group
23.9 %
(0.8) %
8.8 %
(5.6) %
21.5 %
Zegna segment
17.9 %
(0.5) %
1.4 %
(6.8) %
23.8 %
Thom Browne segment
11.9 %
(1.7) %
— %
0%.0
13.6 %
Tom Ford Fashion segment
n.m.
n.m.
n.m.
n.m.
n.m.
Q2 2023 vs Q2 2022
Revenues Growth
Foreign exchange
Acquisitions and
disposals
Structural changes in license
agreements where Zegna operates as a licensee
Organic Growth
Group
35.1 %
(2.3) %
18.4 %
(5.5) %
24.5 %
Zegna segment
23.4 %
(1.8) %
2.7 %
(5.7) %
28.2 %
Thom Browne segment
8.1 %
(2.7) %
— %
— %
10.8 %
Tom Ford Fashion segment
n.m.
n.m.
n.m.
n.m.
n.m.
Q1 2023 vs Q1 2022
Revenues Growth
Foreign exchange
Acquisitions and
disposals
Structural changes in license
agreements where Zegna operates as a licensee
Organic Growth
Group
13.4 %
0.3 %
— %
(5.8) %
18.9 %
Zegna segment
12.6 %
0.7 %
— %
(7.8) %
19.7 %
Thom Browne segment
15.4 %
(0.7) %
— %
— %
16.1 %
Tom Ford Fashion segment
n.m.
n.m.
n.m.
n.m.
n.m.
Group Revenues by Product Line
(Preliminary and Unaudited)
H1 2023 vs H1 2022
Q2 2023 vs Q2 2022
(€ thousands, except percentages)
H1 2023
H1 2022
Reported Revenues
Constant Currency
Organic Growth
Q2 2023
Q2 2022
Reported Revenues
Constant Currency
Organic growth
Total revenues
903,059
728,993
23.9%
24.7%
21.5%
474,747
351,414
35.1%
37.4%
24.5%
Zegna branded products
541,319
425,252
27.3%
28.4%
28.4%
269,430
201,273
33.9%
37.0%
37.0%
Thom Browne
206,951
185,166
11.8%
13.4%
13.4%
94,399
87,229
8.2%
11.0%
11.0%
Tom Ford Fashion
64,015
—
n.m.
n.m.
n.m.
64,015
—
n.m.
n.m.
n.m.
Textile
73,072
68,968
6.0%
5.2%
5.3%
39,254
38,724
1.4%
0.3%
0.6%
Third Party Brands
15,477
47,341
(67.3%)
(68.1%)
(4.4%)
6,567
22,939
(71.4%)
(71.8%)
(30.7%)
Other
2,225
2,266
(1.8%)
(2.3%)
(2.1%)
1,082
1,249
(13.4%)
(13.1%)
(12.7%)
________________________________________
Zegna branded products include apparel,
bags, shoes and small and large leather goods, as well as licensed
goods and royalties.
The tables below show a reconciliation of revenue growth for the
six months ended June 30, 2023 and for the three months ended June
30, 2023 to organic growth for the same periods by product line and
at the Group level.
H1 2023 vs H1 2022
Revenues Growth
Foreign exchange
Acquisitions and
disposals
Structural changes in license
agreements where Zegna operates as a licensee
Organic Growth
Group
23.9 %
(0.8) %
8.8 %
(5.6) %
21.5 %
Zegna branded products
27.3 %
(1.1) %
— %
— %
28.4 %
Thom Browne
11.8 %
(1.6) %
— %
— %
13.4 %
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Textile
6.0 %
0.8 %
(0.1) %
— %
5.3 %
Third Party Brands
(67.3) %
0.8 %
(0.1) %
(63.6) %
(4.4) %
Other
(1.8) %
0.5 %
(0.2) %
— %
(2.1) %
Q2 2023 vs Q2 2022
Revenues Growth
Foreign exchange
Acquisitions and
disposals
Structural changes in license
agreements where Zegna operates as a licensee
Organic Growth
Group
35.1 %
(2.3) %
18.4 %
(5.5) %
24.5 %
Zegna branded products
33.9 %
(3.1) %
— %
— %
37.0 %
Thom Browne
8.2 %
(2.8) %
— %
— %
11.0 %
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Textile
1.4 %
1.1 %
(0.3) %
— %
0.6 %
Third Party Brands
(71.4) %
0.4 %
— %
(41.1) %
(30.7) %
Other
(13.4) %
(0.3) %
(0.4) %
— %
(12.7) %
________________________________________
Zegna branded products include apparel,
bags, shoes and small and large leather goods, as well as licensed
goods and royalties.
Group Revenues by Sales Channel
(Preliminary and Unaudited)
H1 2023 vs H1 2022
Q2 2023 vs Q2 2022
(€ thousands, except percentages)
H1 2023
% of Revenues
H1 2022
% of Revenues
Reported Revenues
Constant Currency
Organic Growth
Q2 2023
% of Revenues
Q2 2022
% of Revenues
Reported Revenues
Constant Currency
Organic Growth
Revenues
903,059
100.0%
728,993
100.0%
23.9%
24.7%
21.5%
474,747
100.0%
351,414
100.0%
35.1%
37.4%
24.5%
Direct to
Consumer (DTC)
Zegna branded products
465,710
361,850
28.7%
30.3%
30.3%
236,114
177,941
32.7%
36.2%
36.2%
Thom Browne
82,924
66,174
25.3%
30.6%
30.6%
40,075
31,993
25.3%
33.7%
33.7%
Tom Ford Fashion
34,751
—
—%
n.m.
n.m.
34,751
—
—%
n.m.
n.m.
Total Direct to Customer (DTC)
583,385
64.6%
428,024
58.7%
36.3%
38.6%
30.4%
310,940
65.5%
209,934
59.7%
48.1%
52.8%
35.8%
Wholesale
Zegna branded products
75,609
63,402
19.3%
17.9%
17.9%
33,316
23,332
42.8%
43.0%
43.0%
Thom Browne
124,027
118,992
4.2%
4.2%
4.2%
54,324
55,236
(1.7%)
(1.5%)
(1.5%)
Tom Ford Fashion
29,264
—
n.m.
n.m.
n.m.
29,264
—
n.m.
n.m.
n.m.
Third Party Brands and Textile
88,549
116,309
(23.9%)
(24.9%)
4.2%
45,821
61,663
(25.7%)
(26.7%)
(3.8%)
Total Wholesale
317,449
35.2%
298,703
41.0%
6.3%
5.5%
7.6%
162,725
34.3%
140,231
39.9%
16.0%
15.6%
6.0%
Other
2,225
0.2%
2,266
0.3%
n.m.
n.m.
n.m.
1,082
0.2%
1,249
0.4%
n.m.
n.m.
n.m.
______________________________________
Zegna branded products include apparel,
bags, shoes and small and large leather goods, as well as licensed
goods and royalties.
The tables below show a reconciliation of revenue growth for the
six months ended June 30, 2023 and for the three months ended June
30, 2023 to organic growth for the same periods by sales channel
and at the Group level.
H1 2023 vs H1 2022
Revenues Growth
Foreign Exchange
Acquisitions and
disposals
Structural changes in license
agreements where Zegna operates as a licensee
Organic Growth
Group
23.9 %
(0.8)%
8.8 %
(5.6)%
21.5 %
Direct to Consumer (DTC) Zegna
branded products
28.7 %
(1.6)%
— %
— %
30.3 %
Thom Browne
25.3 %
(5.3)%
— %
— %
30.6 %
Tom Ford Fashion n.m. n.m. n.m. n.m. n.m.
Total Direct to
Customer (DTC)
36.3 %
(2.3)%
8.2 %
— %
30.4 %
Wholesale Zegna branded
products
19.3 %
1.4 %
— %
— %
17.9 %
Thom Browne
4.2 %
— %
— %
— %
4.2 %
Tom Ford Fashion n.m. n.m. n.m. n.m. n.m. Third Party Brands and
Textile
(23.9)%
1.0 %
(0.1)%
(29.0)%
4.2 %
Total Wholesale
6.3 %
0.8 %
9.7 %
(11.8)%
7.6 %
Other n.m. n.m. n.m. n.m. n.m.
Q2 2023 vs Q2 2022
Revenues Growth
Foreign Exchange
Acquisitions and
disposals
Structural changes in license
agreements where Zegna operates as a licensee
Organic Growth
Group
35.1%
(2.3%)
18.4%
(5.5%)
24.5%
Direct to
Consumer (DTC)
Zegna branded products
32.7%
(3.5%)
—%
—%
36.2%
Thom Browne
25.3%
(8.4%)
—%
—%
33.7%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Total Direct to Customer (DTC)
48.1%
(4.7%)
17.0%
—%
35.8%
Wholesale
Zegna branded products
42.8%
(0.2%)
—%
—%
43.0%
Thom Browne
(1.7%)
(0.2%)
—%
—%
(1.5%)
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Third Party Brands and Textile
(25.7%)
1.0%
(0.2%)
(22.7%)
(3.8%)
Total Wholesale
16.0%
0.4%
20.8%
(11.2%)
6.0%
Other
n.m.
n.m.
n.m.
n.m.
n.m.
______________________________________
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
(Preliminary and Unaudited)
H1 2023 vs H1 2022
Q2 2023 vs Q2 2022
(€ thousands, except percentages)
H1 2023
H1 2022
Reported Revenues
Constant Currency
Organic Growth
Q2 2023
Q2 2022
Reported Revenues
Constant Currency
Organic Growth
Total revenues
903,059
728,993
23.9 %
24.7%
21.5%
474,747
351,414
35.1 %
37.4%
24.5%
EMEA (1)
322,680
260,627
23.8 %
24.2%
21.4%
172,572
126,171
36.8 %
37.9%
24.5%
of which Italy
151,464
125,996
20.2 %
20.0%
16.8%
77,030
61,905
24.4 %
24.1%
14.3%
of which UK
28,823
23,544
22.4 %
24.2%
21.5%
18,442
12,574
46.7 %
48.0%
24.3%
of which UAE
31,906
21,745
46.7 %
45.1%
44.0%
15,506
10,377
49.4 %
53.1%
50.8%
North America (2)
174,376
135,275
28.9 %
25.7%
16.3%
108,742
73,472
48.0 %
46.6%
16.2%
of which United States
156,747
124,291
26.1 %
22.9%
12.5%
98,712
67,358
46.5 %
45.3%
13.9%
Latin America (3)
15,736
12,525
25.6 %
16.5%
16.5%
8,963
6,860
30.7 %
23.9%
23.9%
APAC (4)
389,025
318,825
22.0 %
25.4%
24.3%
183,772
144,009
27.6 %
33.3%
28.7%
of which Greater China Region
306,835
247,193
24.1 %
27.7%
27.2%
142,309
105,213
35.3 %
42.0%
40.0%
of which Japan
39,597
30,240
30.9 %
37.8%
32.6%
20,942
16,101
30.1 %
36.8%
23.9%
Other (5)
1,242
1,741
(28.7) %
(28.9%)
(33.6%)
698
902
(22.6) %
(22.7%)
(31.9%)
________________________________________
(1)
EMEA includes Europe, the Middle East and
Africa.
(2)
North America includes the United States
of America and Canada.
(3)
Latin America includes Mexico, Brazil and
other Central and South American countries.
(4)
APAC includes the Greater China Region,
Japan, South Korea, Thailand, Malaysia, Vietnam, Indonesia,
Philippines, Australia, New Zealand, India and other Southeast
Asian countries.
(5)
Other revenues mainly include
royalties.
The tables below show a reconciliation of revenue growth for the
six months ended June 30, 2023 and for the three months ended June
30, 2023 to organic growth for the same periods by geographical
area and at the Group level.
H1 2023 vs H1 2022
Revenues Growth
Foreign Exchange
Acquisitions and
disposals
Structural changes in license
agreements where Zegna operates as a licensee
Organic Growth
Group
23.9%
(0.8%)
8.8%
(5.6%)
21.5%
EMEA (1)
23.8%
(0.4%)
8.7%
(5.9%)
21.4%
of which Italy
20.2%
0.2%
6.3%
(3.1%)
16.8%
of which UK
22.4%
(1.8%)
20.7%
(18.0%)
21.5%
of which UAE
46.7%
1.6%
—%
1.1%
44.0%
North America (2)
28.9%
3.2%
23.3%
(13.9%)
16.3%
of which United States
26.1%
3.2%
23.3%
(12.9%)
12.5%
Latin America (3)
25.6%
9.1%
—%
—%
16.5%
APAC (4)
22.0%
(3.4%)
2.9%
(1.8%)
24.3%
of which Greater China Region
24.1%
(3.6%)
1.0%
(0.5%)
27.2%
of which Japan
30.9%
(6.9%)
9.1%
(3.9%)
32.6%
Other (5)
(28.7%)
0.2%
4.7%
—%
(33.6%)
Q2 2023 vs Q2 2022
Revenues Growth
Foreign Exchange
Acquisitions and
disposals
Structural changes in license
agreements where Zegna operates as a licensee
Organic Growth
Group
35.1%
(2.3%)
18.4%
(5.5%)
24.5%
EMEA (1)
36.8%
(1.1%)
18.1%
(4.7%)
24.5%
of which Italy
24.4%
0.3%
12.7%
(2.9%)
14.3%
of which UK
46.7%
(1.3%)
38.6%
(14.9%)
24.3%
of which UAE
49.4%
(3.7%)
—%
2.3%
50.8%
North America (2)
48.0%
1.4%
43.7%
(13.3%)
16.2%
of which United States
46.5%
1.2%
44.0%
(12.6%)
13.9%
Latin America (3)
30.7%
6.8%
—%
—%
23.9%
APAC (4)
27.6%
(5.7%)
6.3%
(1.7%)
28.7%
of which Greater China Region
35.3%
(6.7%)
2.5%
(0.5%)
40.0%
of which Japan
30.1%
(6.7%)
16.7%
(3.8%)
23.9%
Other (5)
(22.6%)
0.1%
9.2%
—%
(31.9%)
________________________________________
(1)
EMEA includes Europe, the Middle East and
Africa.
(2)
North America includes the United States
of America and Canada.
(3)
Latin America includes Mexico, Brazil and
other Central and South American countries.
(4)
APAC includes the Greater China Region,
Japan, South Korea, Thailand, Malaysia, Vietnam, Indonesia,
Philippines, Australia, New Zealand, India and other Southeast
Asian countries.
(5)
Other revenues mainly include
royalties.
***
Monobrand(1) Store Network at June 30, 2023
As of June 30, 2023
As of December 31,
2022
As of June 30, 2022
Stores
Zegna
Thom Browne
Tom Ford Fashion
Group
Zegna
Thom Browne
Group
Zegna
Thom Browne
Group
EMEA (2)
69
10
4
83
65
10
75
69
10
79
Americas (3)
55
7
11
73
53
7
60
51
5
56
APAC
122
49
36
207
121
46
167
122
38
160
Total Direct to Customer (DTC)
246
66
51
363
239
63
302
242
53
295
EMEA (2)
59
7
12
78
57
6
63
85
5
90
Americas (3)
63
3
51
117
64
4
68
68
3
71
APAC
35
33
7
75
35
32
67
33
30
63
Total Wholesale
157
43
70
270
156
42
198
186
38
224
Total
403
109
121
633
395
105
500
428
91
519
________________________________________
(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 Russia at
June 30, 2023 or at December 31, 2022 (14 Wholesale stores in EMEA
at June 30, 2022). Although some stores may still be operating at
June 30, 2023, they have not been supplied by Zegna since February
2022 and have therefore been excluded from Zegna's store count.
(3)
Americas include North America and Latin
America.
***
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, revenues on a constant currency basis
and revenues on an organic growth 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
Revenues
In addition to presenting our revenues on a current currency
basis, we also present certain revenue information on a constant
currency basis (Constant Currency), which excludes the effects of
foreign currency translation from our subsidiaries with functional
currencies different from the Euro.
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.
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.
Revenues on a Constant Currency basis are not a substitute for
revenues on a current currency basis or any IFRS-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.
Organic Growth Revenues
In addition to presenting our revenues on a current currency
basis, we also present certain revenue information on an organic
growth basis (Organic Growth). Organic Growth is calculated as the
change in revenues from period to period, excluding the effects of
(a) foreign exchange, (b) acquisitions and disposals and (c)
structural changes in license agreements where Zegna operates as a
licensee.
In calculating Organic Growth, the following adjustments are
made to revenues:
(a) foreign exchange: current period average foreign currency
exchange rates are used to translate prior period revenues of
foreign subsidiaries expressed in local functional currencies
different than the Euro;
(b) acquisitions and disposals: revenues generated by entities,
businesses or revenue-generating assets acquired or disposed of in
the current year or prior year are excluded from both periods
(acquisitions and disposals refer to share or asset deals or other
changes in control of subsidiaries, associates or joint
ventures);
(c) structural changes in license agreements where Zegna
operates as a licensee: revenues generated from license agreements,
where Zegna operates as a licensee, that experienced a structural
change in the scope or perimeter in the current year or prior year
are excluded from both periods, including changes to product
categories, sales channels or geographies of the underlying license
agreements.
We believe the presentation of Organic Growth is useful to
better understand and analyze the underlying change in the Group’s
revenues from period to period on a consistent perimeter and
constant currency basis.
Revenues on an Organic Growth basis are not a substitute for
revenues on a current currency basis or any IFRS-related measures,
however we believe that revenues excluding the effects of (a)
foreign exchange, (b) acquisitions and disposals and (c) structural
changes in license agreements where Zegna operates as a licensee
provide additional useful information to management and to
investors in analyzing and evaluating our revenues and operating
performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230727251537/en/
Investor Relations / Group Communications / Media
Francesca Di Pasquantonio / Clementina Tito ir@zegna.com /
corporatepress@zegna.com
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