Zegna Group swings to FY profit despite China impact

Thom Browne parent company Zegna Group swung to a profit in the year to December 31 despite restrictions in its China market hitting the business in the second and fourth quarter.

The company swung to a profit of 65.3 million euros in the year from a loss of 127.7 million euros a year earlier, while its adjusted EBIT increased to 157.7 million euros from 149.1 million euros.

That came as revenue for the year increased to 1.5 billion euros from 1.3 billion euros, up 15.5 percent year-on-year, or up 11 percent on a constant currency basis.

Excluding the Greater China Region, which particularly impacted the business in the second and fourth quarters, revenue was up 42 percent year-on-year.

‘Encouraging start’ to 2023

Group chair and CEO Ermenegildo Zegna hailed a “robust” 2022 which reflected “the strong momentum and desirability of our brands as well as the soundness and success of our strategy and execution”.

He described the beginning of 2023 as “off to an encouraging start” with double-digit performance in the NYSE-listed group’s retail network.

Zegna continued: “I am optimistic that the reopening of the Greater China Region following Covid-19-related restrictions, together with the positive response to our collections we are seeing from our customers worldwide, will continue to drive the growth of our global business.”

But he also noted it is “important to acknowledge that current financial uncertainties and an ever-changing global environment have the potential to affect consumer attitudes and buying patterns”.

Looking ahead, the group said it expects its 2023 results to be on the right trajectory to reach its target by the end of fiscal year 2025 of revenue exceeding 2 billion euros and adjusted EBIT margin reaching at least 15 percent.