Zegna Group posts robust growth in Q4 and 2023
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Zegna Group announced preliminary unaudited revenues of 1.9 billion euros for the full year, up 27.6 percent and up 29.7 percent on a constant currency basis, with an organic growth rate of 19.3 percent.
Revenues for the fourth quarter were 570 million euros, up 40.1 percent and up 42.9 percent on a constant currency basis, with an organic growth rate of 19.6 percent.
For the medium term, the group is aiming to deliver over 10 percent compounded annual revenues growth and an adjusted EBIT CAGR of around 20 percent, compared to FY 2023.
Commenting on the financial results, Ermenegildo “Gildo” Zegna, chairman and CEO of the Zegna Group, said: “The significant increase in our revenues in 2023, and especially from our network of directly operated stores, is a clear indication that demand for our brands remains healthy, and that we are successfully executing our strategy to increase their desirability and solidify their position as leaders in the luxury market.”
Zegna Group revenue performance by brand segments
For the full year 2023, revenues for the Zegna segment amounted to 1,322 million euros, up 12.4 percent and 13.8 percent on a constant currency basis, with an organic growth rate of 19.5 percent.
Revenues for the fourth quarter were 385 million euros, up 15.2 percent and up 17 percent on a constant currency basis, with an organic growth rate of 18.2 percent.
Revenues for the Thom Browne segment amounted to 380 million euros for the full year, up 14.9 percent and up 18.3 percent on a constant currency basis, with an organic growth rate of 17.8 percent. Revenues for the fourth quarter came in at 99 million euros, up 30.2 percent and 35 percent on a constant currency basis, with an organic growth rate of 24.6 percent.
Revenues for the Tom Ford Fashion segment since its consolidation on April 29, 2023, came in at 236 million euros, of which 97 million euros was recognized in the fourth quarter of the year, reflecting strong performance during the holiday season.
Highlights of Zegna Group’s results across product categories
For the full year, revenues for Zegna-branded products were 1,109 million euros, up 20.1 percent and 22.3 percent on a constant currency basis, with an organic growth rate of 22.3 percent. Revenues for the fourth quarter were 326 million euros, up 18.8 percent and 20.9 percent on a constant currency and organic growth basis.
For the full year, revenues for the Thom Browne product line were 378 million euros, up 14.7 percent and 18 percent on a constant currency basis, with an organic growth rate of 17.5 percent. Revenues for the quarter came in at 98 million euros, up 29.9 percent and up 34.8 percent on a constant currency basis, with an organic growth rate of 24.3 percent.
For the full year, revenues for the Tom Ford Fashion product line, calculated as of its consolidation on April 29, 2023, came in at 236 million euros, while fourth quarter revenues came in at 97 million euros.
Revenues for the group’s textile product line amounted to 151 million euros, up 10.4 percent and 9.4 percent on a constant currency basis, with an organic growth rate of 9.5 percent. Fourth quarter revenues were 42 million euros, up 13.1 percent and 12 percent on a constant currency basis, with an organic growth rate of 12.1 percent.
For the full year, revenues for the third-party brands product line were 25 million euros, down 74.1 percent and down 74.2 percent on a constant currency basis, with an organic growth rate of negative 17.4 percent. Fourth revenues came in at 5 million euros, down 70.6 percent and down 69.9 percent on a constant currency basis, with an organic growth rate of negative 33.5 percent.
Zegna Group revenues by retail channels
The company’s DTC revenues for the full year amounted to 1,265 million euros, up 37.8 percent and up 42.1 percent on a constant currency basis, with an organic growth rate of 24.5 percent.
For the fourth quarter, DTC revenues amounted to 400 million euros, up 46.3 percent and up 50.6 percent on a constant currency basis, with an organic growth rate of 24.3 percent.
Wholesale revenues for the full year amounted to 635 million euros, up 11.3 percent and up 10.7 percent on a constant currency basis, with an organic growth rate of 9.6 percent.
Group wholesale revenues came in at 169 million euros for the fourth quarter, up 27.6 percent and up 27.5 percent on a constant currency basis, with an organic growth rate of 8.9 percent.
Zegna Group delivers strong growth across geographies
Revenues for both the full year and the fourth quarter were strong across all key geographies, with double-digit growth across all regions compared to 2022. The most significant growth was reported in North America, which saw revenues grow by 41.6 percent for the full year and 60.1 percent for the fourth quarter, also supported by the consolidation of Tom Ford Fashion.
For the full year, revenues in EMEA amounted to 659 million euros, up 26.6 percent and up 27.7 percent on a constant currency basis, with an organic growth rate of 18.8 percent. Fourth quarter revenues in EMEA came in at 184 million euros, up 30.9 percent and 32.7 percent on a constant currency basis, with an organic growth rate of 14.2 percent. The UAE recorded revenues for the full year and fourth quarter of 69 million euros and 24 million euros, respectively, up 35 percent for the full year and 22.4 percent for the quarter. Growth on a constant currency basis was 38.2 percent and 26.7 percent, and organic growth was 30.9 percent and 20.2 percent, respectively.
For the full year, revenues in North America came in at 417 million euros, up 41.6 percent and up 40.4 percent on a constant currency basis, with an organic growth rate of 11.4 percent. Revenues from the U.S. were 385 million euros, up 42.3 percent and up 40.9 percent on a constant currency basis, with an organic growth rate of 10.4 percent.
North America revenues for the quarter were 132 million euros, up 60.1 percent and 60.9 percent on a constant currency basis, with an organic growth rate of 3.2 percent. Of that, the U.S. contributed 125 million euros, up 63.4 percent and 64.4 percent on a constant currency basis, with an organic growth rate of 4.4 percent.
Revenues in APAC were 788 million euros, up 22.2 percent and 27.3 percent on a constant currency basis, with an organic growth rate of 23.7 percent. Of that, 596 million euros came from the Greater China region, up 20.5 percent and up 25.7 percent on a constant currency basis, with an organic growth rate of 24.2 percent. Revenues in Japan of 85 million euros, were up 29.9 percent and 39.8 percent on a constant currency basis, with an organic growth rate of 28.3 percent.
In the fourth quarter, APAC revenues were 241 million euros, up 39 percent and 44.3 percent on a constant currency basis, with an organic growth rate of 32 percent. 4Q 2023 revenues from the Greater China region amounted to 176 million euros, up 35 percent and up 39.3 percent on a constant currency basis, with an organic growth rate of 36.1 percent. Revenues from Japan came in at 26 million euros, up 27 percent and 39.6 percent on a constant currency basis, with an organic growth rate of 20.7 percent.
For the full year, revenues in Latin America were 38 million euros, up 25.6 percent and up 16.2 percent on a constant currency and organic growth basis. Fourth quarter revenues came in at 13 million euros, up 29.6 percent and 20.9 percent on a constant currency and organic growth basis.