Ermenegildo Zegna Groupâs 2024 profits fell 31 percent to â¬91 million ($98 million), as a slowdown in China and a weaker wholesale performance, particularly at Thom Browne, weighed on results.
Adjusted EBIT, a measure of operating profit, in 2024 fell 16 percent year-on-year to â¬184 million.
âWe cannot be fully satisfied with the numbers we present today,â chairman Gildo Zegna said in the earnings call on Thursday. âOverall we are positive, but progress will be gradual.â
Despite the challenges, group revenues grew 2.2 percent to â¬1.95 billion, with the Zegna brandâs 6 percent revenue growth offsetting declines at its other two labels.
Thom Browneâs Decline
Thom Browneâs performance missed expectations, particularly in wholesale, which saw a 34 percent revenue decline year-on-year. The labelâs Q1 2025 wholesale revenue remain weak, but the group said this trend would not define the full year. âThom Browneâs February show confirmed that the brandâs DNA has and always will be there. The team is working to build on that as we evolve the brand,â its chairman said. âThe goal for Thom Browne is to go after local markets [in EMEA and the United States]. It will happen, I think the direction and vision is there, itâs just a matter of executing it properly.â
Meanwhile, Zegna will stage its first-ever fashion show outside Milan in Dubai, a strategic move reflecting the strength of its Middle Eastern business. During the earnings call, Zegna mentioned the Emirates, particularly Dubai, as an EMEA outperformer several times and highlighted âthe importance of personalizationâ for the region.
Revenue at Tom Ford rose 34 percent to â¬315 million, but the label reported deepening losses as it invested in onboarding a new designer, Haider Ackermann, who showed his debut collection for the brand in March. Adjusted EBIT sank to negative â¬10.1 million, compared to 2023âs negative â¬1.7 million loss.
âHaider has done a marvellous job, It was impossible for him to do everything the first time, but he focused on what we needed most, which was the clothing style. He has the ability to evolve Tom Ford,â Zegna said.
Reduced Mid-Term Targets
The companyâs 11 percent revenue decline in China is expected to continue in 2025. âThe Hong Kong situation is quite challenging, and I think China will be negative in 2025,â Zegna said.
In contrast, the Americas saw double-digit growth, though the company is monitoring the impact of potential U.S. tariffs. âOur customer base is resilient overall and we remain positive in the US, though Canada is a slightly different story,â Zegna added.
Zegna Group is cautiously optimistic with its newly posted mid-term targets, projecting sales will grow to â¬2.2 â â¬2.4 billion by the end of 2027, implying annual growth between 4 and 7 percent over the next three years. Adjusted EBIT is hoped to reach â¬250 to â¬300 million. âWe are fully committed and working to turn these targets into reality,â Zegna said.
The groupâs stock price surged by 12 percent following the announcement.
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