- Revenues1 for the third quarter of 2023 reach €431 million,
up 20.8% year-over-year and with an organic2 growth rate of
11.3%.
- Revenues for the first nine months of 2023 reach €1.33
billion, up 22.9% year-over-year and with an organic growth rate of
19.2%.
- Group is taking over retail distribution of the ZEGNA brand
in South Korea as of early 2024.
- Third quarter revenues support 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,
today announced unaudited revenues of €431 million for the third
quarter of 2023. Revenues were up 20.8% year-over-year and up 25.0%
year-over-year on a constant currency3 basis, with an organic
growth rate of 11.3%. For the first nine months of the year,
unaudited revenues came in at €1,334 million, up 22.9%
year-over-year and up 24.8% year-over-year on a constant currency
basis, with an organic growth rate of 19.2%. Revenues for the first
nine months of 2023 reflect the consolidation of Tom Ford
International LLC as of 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.
Ermenegildo “Gildo” Zegna, Chairman and CEO of the Zegna Group,
said: “Our results this quarter continue to showcase the
broad-based strength of our three brands and the successful
execution of our strategy. I am particularly pleased that we are
performing well across a diverse set of regions, as the balance of
our geographic mix provides resilience in a highly dynamic
environment.”
“I am confident that the continued progress of the ZEGNA
rebranding, including the full implementation of the One Brand
strategy in China, the expansion opportunities for Thom Browne, and
the integration and evolution of TOM FORD FASHION all provide
valuable tailwinds despite the current global operating
environment.”
“The Group’s leadership team is looking forward to our second
Capital Markets Day this December at the New York Stock Exchange,
where we will be presenting our updated financial goals, including
those for the TOM FORD fashion business.”
Recent Highlights
- ZEGNA to Directly Operate Business in South Korea On
October 23, 2023, ZEGNA executed an agreement with its South Korean
franchise partner through which the Group will purchase the entity
operating the ZEGNA business in the country. Pursuant to this,
ZEGNA will directly operate its South Korean business starting in
the first quarter of 2024. This includes converting the 15 ZEGNA
stores in the region to direct-to-consumer points of sale. ZEGNA
has been present in South Korea since 1997 and this step is
consistent with the brand’s strategy of continuing to increase
control over the business.
- Thom Browne celebrates 20th Anniversary As Thom Browne
celebrates its 20th anniversary, the brand has launched a monograph
celebrating the legacy of the house and the man behind it. Earlier
this month, the Victoria & Albert Museum celebrated the iconic
designer in a special conversation with fashion writer and author
Charlie Porter. After London, the 20th anniversary monogram
celebrations have continued with dedicated events in Tokyo
(including at the Aoyama flagship store), Seoul (at Leeum Museum
and at 10 Corso Como), and Shanghai. The brand is also marking the
anniversary with a number of activities at its boutiques
worldwide.
_________________________
1 Throughout this press release, revenues
for the third quarter of 2023 and the nine months of 2023, and
comparatives thereof, are unaudited.
2 Organic growth is a non-IFRS financial
measure. See the Non-IFRS Financial Measures section starting on
page 8 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 8 of this press release for the definition
of such non-IFRS financial measure.
- TOM FORD FASHION Updates On September 21, 2023, Peter
Hawkings debuted his very first collection as Creative Director of
Tom Ford. The show, which was part of the Spring / Summer 2024
Milan Fashion Week, was very well-received by the media, critics
and the trade, heralding a new chapter in fashion for the iconic
brand under the stewardship of the Group.
Review of Revenues for the Third
Quarter 2023 and the Nine Months ended September 30,
2023
In the third quarter of 2023, Zegna Group generated revenues of
€431 million, an increase of 20.8% year-over-year. On a constant
currency basis, revenues grew by 25.0% compared to the same period
in the prior year, with an organic growth rate of 11.3%. Growth was
led primarily by the strength of Zegna-branded products, especially
in the direct-to-consumer (“DTC”) channel.
Revenues by Segment
Zegna Segment: For the third quarter of 2023, revenues
for the Zegna segment amounted to €298 million, growing 3.0%
year-over-year and 6.0% year-over-year on a constant currency
basis, with an organic growth rate of 12.7% for the quarter. This
brought revenues for the first nine months of the year to €950
million, up 12.7% year-over-year and up 14.1% year-over-year on a
constant currency basis, with an organic growth rate of 20.1% for
the first nine months of the year. The performance of the Zegna
segment reflects the strength of the Zegna branded product line,
especially in the DTC channel, which more than offset the impact of
the end of the distribution licensing agreement for Tom Ford
International on the Third-Party brands product line4.
Thom Browne Segment: For the third quarter of 2023,
revenues for the Thom Browne segment amounted to €74 million,
growing by 6.3% year-over-year and 13.1% year-over-year on a
constant currency basis, with an organic growth rate of 8.5% for
the quarter. This brought revenues for the first nine months of the
year to €282 million, up 10.4% year-over-year and up 13.3%
year-over-year on a constant currency basis, with an organic growth
rate of 15.7% for the first nine months of the year. The organic
growth rate for Thom Browne excludes the effect of the acquisition
of the retail business in South Korea, which resulted in the
conversion of the South Korean business from wholesale to DTC.
Tom Ford Fashion Segment: Since April 29, 2023, which
marked the beginning of the consolidation of Tom Ford International
LLC into the Group’s financial statements, Tom Ford Fashion is
represented 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 September 30, 2023,
the segment reported revenues of €139 million. In the third quarter
of 2023, revenues totaled €75 million.
Revenues by Product Line
Zegna-Branded Products: Revenues for Zegna-branded
products were €242 million for the third quarter, up 8.0%
year-over-year, with constant currency and organic growth both at
12.2%. This brought revenues for Zegna-branded products during the
first nine months of 2023 to €784 million, up 20.6% year-over-year,
and with constant currency and organic growth both at 22.9%. The
growth was driven by strong double-digit revenue performance in
luxury leisurewear and in the Made-to-Measure business, while the
shoes category continued to strongly outperform.
Thom Browne: Revenues for Thom Browne were €73 million
for the third quarter, growing by 5.8% year-over-year and 12.6%
year-over-year on a constant currency basis, with an organic growth
rate of 8.0% for the quarter. This brought revenues for the first
nine months of the year to €280 million, up 10.1% year-over-year
and up 13.1% year-over-year on a constant currency basis, with an
organic growth rate of 15.5% for the first nine months of the year.
Revenues for womenswear continued to outperform at Thom Browne and
represented close to 30% of total revenues for the quarter.
Textile: Textile revenues were €35 million during the
third quarter of 2023, up 17.2% year-over-year and up 15.7% on a
constant currency basis, with an organic growth rate of 16.1% for
the quarter. This brought textile revenues to €109 million for the
first nine months of the year, up 9.4% year-over-year and up 8.4%
year-over-year on a constant currency basis, with an organic growth
of 8.6% for the first nine months of the year.
Third-Party Brands4: The revenues for the Third-Party
Brands product line in the third quarter of the year were €5
million, down 86.0% year-over-year and down 85.9% year-over-year on
a constant currency basis, impacted by the end of the distribution
licensing agreement for Tom Ford International, with an organic
growth rate of -14.3%. For the first nine months of the year,
revenues for the Third-Party Brands product line were €20 million,
down 74.9% year-over-year and down 75.2% year-over-year on a
constant currency basis, with a -8.1% organic growth rate.
______________________
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.
Revenues by Channel
DTC revenues reached €282 million in the third quarter of 2023,
up 29.9% year-over-year and up 37.7% year-over-year on a constant
currency basis, with an organic growth rate of 12.9% for the
quarter. For the first nine months of the year DTC revenues reached
€865 million, up 34.2% year-over-year and up 38.4% year-over-year
on a constant currency basis, with an organic growth rate of 24.6%.
DTC revenues represented 64.8% of Group revenues in the first nine
months of 2023, up from 59.4% in the same period last year.
Of the €282 million DTC revenues in the third quarter, €195
million came from Zegna-branded products, where DTC revenues were
up 8.3% year-over-year and up 14.0% year-over-year on a constant
currency basis, and on an organic growth basis, driven by a
continued improvement in store productivity. Thom Browne DTC
revenues came in at €43 million, up 18.6% year-over-year and up
32.1% year-over-year on a constant currency basis, with an organic
growth rate of 7.7% for the quarter, reflecting the shift of the
South Korean business from wholesale to DTC. TOM FORD FASHION
contributed €43 million in the third quarter.
Meanwhile, wholesale revenues reached €148 million in the third
quarter of 2023, up 6.6% year-over-year and up 6.1% year-over-year
on a constant currency basis, with an organic growth rate of 8.1%
for the quarter. For the first nine months of the year wholesale
revenues reached €466 million, up 6.4% year-over-year and up 5.7%
year-over-year on a constant currency basis, with an organic growth
rate of 9.9%. Wholesale revenues represented 34.9% of Group
revenues in the first nine months of 2023, down from 40.3% in the
same period of last year.
Of the €148 million wholesale revenues in the third quarter, €47
million came from Zegna-branded products, up 6.7% year-over-year
and up 5.0% year-over-year on a constant currency and organic
growth basis. Thom Browne wholesale revenues reflected the
conversion of the South Korean points of sales from wholesale to
DTC and amounted to €30 million, down 8.6% year-over-year and down
7.8% year-over-year on a constant currency basis, but with an
organic growth rate of 8.3% for the quarter. The balance of
wholesale revenues came from TOM FORD FASHION (€32 million) and
from the Third Party Brands and Textile segments (€40 million, down
36% year-over-year and down 36.3% in constant currency, and with
organic growth of 11.5%).
Revenues by Geography
During the third quarter of 2023, the Group saw double-digit
organic growth across a number of key regions, including EMEA and
North America, led by revenues from the U.S.
Revenues in the EMEA region reached €152 million in the third
quarter of 2023, up 27.7% year-over-year and up 29.4%
year-over-year on a constant currency basis, with an organic growth
rate of 18.5% for the quarter. The double-digit growth in the
region, which was seen across Europe and the Middle East for both
ZEGNA and Thom Browne, was driven by DTC demand. For the first nine
months of 2023, the EMEA region reached €475 million in revenues,
up 25.0% year-over-year and up 25.8% year-over-year on a constant
currency basis, and with an organic growth rate of 20.5%.
North America revenues reached €111 million for the quarter, up
44.2% year-over-year and up 45.0% year-over-year on a constant
currency basis, with an organic growth rate of 12.3%. The U.S. saw
revenues at €102 million for the quarter, up 47.8% year-over-year
and up 48.4% year-over-year on a constant currency basis, with an
organic growth rate of 13.7%. The growth in U.S. revenues came on
the back of contributions from the newly-included Tom Ford Fashion
segment as well as outstanding DTC performance for both ZEGNA and
Thom Browne, both of which recorded an outstanding high
double-digit revenue growth. For the first nine months of 2023,
revenues in North America reached €285 million, up 34.4%
year-over-year and up 32.6% year-over-year on a constant currency
basis, with an organic growth rate of 14.9%.
In the third quarter of 2023, revenues in APAC reached €158
million for the quarter, up 3.5% year-over-year and up 11.7%
year-over-year on a constant currency basis, with an organic growth
rate of 5.4%. Revenues for the first nine months of 2023 in APAC
were €547 million, up 16.0% year-over-year and up 20.9%
year-over-year on a constant currency basis, with an organic growth
rate of 20.4%.
In the APAC region, growth was remarkable in Japan, where Group
revenues reached €19 million, up 31.8% year-over-year and up 44.8%
year-over-year on a constant currency basis, with an organic growth
rate of 30.9% for the quarter. The region also benefited from the
conversion of 17 stores in South Korea after the acquisition of the
Thom Browne business there. In the third quarter of 2023, the
Greater China Region saw revenues to €112 million, a 3.4% decrease
year-over-year and up 5.2% year-over-year on a constant currency
basis, with an organic growth rate of 3.5%. Revenues for the first
nine months of 2023 in the Greater China Region were €419 million,
up 15.3% year-over-year and up 20.6% year-over-year on a constant
currency basis, with an organic growth rate of 19.8%.
In Latin America, revenues in the third quarter of 2023 reached
€8.4 million, up 19.6% year-over-year and up 9.0% year-over-year on
a constant currency and on an organic growth basis. This brought
revenues in Latin America for the first nine months of 2023 to €24
million, up 23.5% year-over-year and up 13.9% year-over-year on a
constant currency and on an organic growth basis.
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 Q3 2023 revenues confirm that the
Group remains on this trajectory. The Group’s medium-term targets
assume no major future worsening of the global geopolitical,
health, macroeconomic and financial markets situation, and no other
unforeseen events.
Capital Markets Day
The Group will host a Capital Markets Day on December 5, 2023,
at the New York Stock Exchange (NYSE) in New York, where it expects
to announce updated medium- to long-term financial goals, including
for the Tom Ford Fashion segment.
***
Conference Call
As previously announced, at 8:00 a.m. ET (2:00 p.m. CET) the
Group plans to host a webcast and conference call. A live webcast
of the conference call will also be available on the Company’s
website at ir.zegnagroup.com. To participate in the call, please
dial:
Italy (Local): +39 06 9450 1060 United Kingdom
(Local): +44 20 4587 0498 United States (Local): +1 646 787 9445
Participant Access Code: 143028
An online archive of the broadcast will be available on the
website shortly after the live call and will be available for
twelve months.
***
Next Scheduled
Announcement
The next scheduled announcement will be the full year 2023
preliminary revenues on January 31, 2024. 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 a 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
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.
***
Third Quarter 2023 and Nine Months
ended September 30, 2023 - Unaudited Group Revenues
Group Revenues by Segment
(Unaudited)
9M 2023 vs 9M 2022
Q3 2023 vs Q3 2022
(€ thousands, except percentages)
9M 2023
9M 2022
Reported Revenues
Constant Currency
Organic Growth
Q3 2023
Q3 2022
Reported Revenues
Constant Currency
Organic Growth
Zegna
949,581
842,229
12.7%
14.1%
20.1%
297,826
289,263
3.0%
6.0%
12.7%
Thom Browne
281,602
255,073
10.4%
13.3%
15.7%
73,643
69,304
6.3%
13.1%
8.5%
Tom Ford Fashion
138,580
—
n.m.(*)
n.m.
n.m.
74,553
—
n.m.
n.m.
n.m.
Eliminations
(35,574)
(11,435)
n.m.
n.m.
n.m.
(14,892)
(1,693)
n.m.
n.m.
n.m.
Total revenues
1,334,189
1,085,867
22.9%
24.8%
19.2%
431,130
356,874
20.8%
25.0%
11.3%
______________________________________ (*)
Throughout this section “n.m.” means not meaningful
Group Revenues by Product Line
(Unaudited)
9M 2023 vs 9M 2022
Q3 2023 vs Q3 2022
(€ thousands, except percentages)
9M 2023
9M 2022
Reported Revenues
Constant Currency
Organic Growth
Q3 2023
Q3 2022
Reported Revenues
Constant Currency
Organic Growth
Zegna branded products
783,648
649,568
20.6%
22.9%
22.9%
242,329
224,316
8.0%
12.2%
12.2%
Thom Browne
280,127
254,346
10.1%
13.1%
15.5%
73,176
69,180
5.8%
12.6%
8.0%
Tom Ford Fashion
138,567
—
n.m.
n.m.
n.m.
74,552
—
n.m.
n.m.
n.m.
Textile
108,555
99,256
9.4%
8.4%
8.6%
35,483
30,288
17.2%
15.7%
16.1%
Third Party Brands
19,998
79,604
(74.9%)
(75.2%)
(8.1%)
4,521
32,263
(86.0%)
(85.9%)
(14.3%)
Other
3,294
3,093
6.5%
6.8%
6.7%
1,069
827
29.3%
32.2%
31.6%
Total revenues
1,334,189
1,085,867
22.9%
24.8%
19.2%
431,130
356,874
20.8%
25.0%
11.3%
Group Revenues by Sales Channel
(Unaudited)
9M 2023 vs 9M 2022
Q3 2023 vs Q3 2022
(€ thousands, except percentages)
9M 2023
% of Revenues
9M 2022
% of Revenues
Reported Revenues
Constant Currency
Organic Growth
Q3 2023
% of Revenues
Q3 2022
% of Revenues
Reported Revenues
Constant Currency
Organic Growth
Direct to
Consumer (DTC)
Zegna branded products
661,143
542,228
21.9%
25.0%
25.0%
195,433
180,378
8.3%
14.0%
14.0%
Thom Browne
126,272
102,719
22.9%
31.1%
22.5%
43,348
36,545
18.6%
32.1%
7.7%
Tom Ford Fashion
77,792
—
n.m.
n.m.
n.m.
43,041
—
n.m.
n.m.
n.m.
Total Direct to Consumer (DTC)
865,207
64.8%
644,947
59.4%
34.2%
38.4%
24.6%
281,822
65.4%
216,923
60.8%
29.9%
37.7%
12.9%
Wholesale
Zegna branded products
122,505
107,340
14.1%
12.7%
12.7%
46,896
43,938
6.7%
5.0%
5.0%
Thom Browne
153,855
151,627
1.5%
1.6%
10.5%
29,828
32,635
(8.6%)
(7.8%)
8.3%
Tom Ford Fashion
60,775
—
n.m.
n.m.
n.m.
31,511
—
n.m.
n.m.
n.m.
Third Party Brands and Textile
128,553
178,860
(28.1%)
(28.9%)
6.5%
40,004
62,551
(36.0%)
(36.3%)
11.5%
Total Wholesale
465,688
34.9%
437,827
40.3%
6.4%
5.7%
9.9%
148,239
34.4%
139,124
39.0%
6.6%
6.1%
8.1%
Other
3,294
0.3%
3,093
0.3%
n.m.
n.m.
n.m.
1,069
0.2%
827
0.2%
n.m.
n.m.
n.m.
Total revenues
1,334,189
100.0%
1,085,867
100.0%
22.9%
24.8%
19.2%
431,130
100.0%
356,874
100.0%
20.8%
25.0%
11.3%
Group Revenues by Geographical Area
(Unaudited)
9M 2023 vs 9M 2022
Q3 2023 vs Q3 2022
(€ thousands, except percentages)
9M 2023
9M 2022
Reported Revenues
Constant Currency
Organic Growth
Q3 2023
Q3 2022
Reported Revenues
Constant Currency
Organic Growth
EMEA (1)
474,947
379,826
25.0%
25.8%
20.5%
152,267
119,199
27.7%
29.4%
18.5%
of which Italy
211,794
171,108
23.8%
23.4%
18.6%
60,330
45,112
33.7%
33.0%
23.9%
of which UK
48,680
38,608
26.1%
27.6%
19.9%
19,857
15,064
31.8%
32.9%
17.4%
of which UAE
45,094
31,616
42.6%
45.2%
37.3%
13,188
9,871
33.6%
45.4%
21.1%
North America (2)
285,390
212,280
34.4%
32.6%
14.9%
111,014
77,005
44.2%
45.0%
12.3%
of which United States
259,164
193,594
33.9%
31.8%
12.9%
102,417
69,303
47.8%
48.4%
13.7%
Latin America (3)
24,149
19,558
23.5%
13.9%
13.9%
8,413
7,033
19.6%
9.0%
9.0%
APAC (4)
547,372
471,744
16.0%
20.9%
20.4%
158,347
152,919
3.5%
11.7%
5.4%
of which Greater China Region
419,180
363,453
15.3%
20.6%
19.8%
112,345
116,260
(3.4%)
5.2%
3.5%
of which Japan
58,674
44,718
31.2%
40.0%
32.1%
19,077
14,478
31.8%
44.8%
30.9%
Other (5)
2,331
2,459
(5.2%)
(4.9%)
(23.1%)
1,089
718
51.7%
54.2%
2.8%
Total revenues
1,334,189
1,085,867
22.9%
24.8%
19.2%
431,130
356,874
20.8%
25.0%
11.3%
_________________________
(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 September 30, 2023
As of September 30,
2023
As of December 31,
2022
As of September 30,
2022
Stores
Zegna
Thom Browne
Tom Ford Fashion
Group
Zegna
Thom Browne
Group
Zegna
Thom Browne
Group
EMEA (2)
69
9
4
82
65
10
75
66
10
76
Americas (3)
62
7
12
81
53
7
60
52
6
58
APAC
120
68
35
223
121
46
167
124
41
165
Total Direct to Consumer
251
84
51
386
239
63
302
242
57
299
EMEA (2)
58
7
13
78
57
6
63
66
5
71
Americas (3)
63
3
50
116
64
4
68
68
3
71
APAC
33
15
7
55
35
32
67
32
30
62
Total Wholesale
154
25
70
249
156
42
198
166
38
204
Total
405
109
121
635
395
105
500
408
95
503
_______________________
(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
September 30, 2023 or at December 31, 2022 (11 Wholesale stores in
EMEA at September 30, 2022). Although some stores may still be
operating at September 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
(Constant Currency) and revenues on an organic growth basis
(Organic Growth). 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
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.
Revenues on a constant currency basis (Constant
Currency)
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.
Revenues on an organic growth basis (Organic Growth)
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)
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 businesses and operations acquired or disposed in the
current year or prior year are excluded from both periods.
Additionally, where a business or operation was a customer prior to
an acquisition, the related pre-acquisition revenues are excluded
from the current and prior periods.
(c) Changes in license agreements where Zegna
operates as a licensee – Revenues generated from license agreements
where Zegna operates as a licensee that are new or terminated in
the current year or prior year are excluded from both periods
(except if the effects are already included in acquisitions and
disposals). Additionally, 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) 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.
The tables below show a reconciliation of revenue growth to
organic growth, excluding the effects of foreign exchange,
acquisitions and disposals and changes in license agreements where
Zegna operates as a licensee, by segment, by product line, by sales
channel and by geography:
- for the nine months ended September 30, 2023 compared to the
nine months ended September 30, 2022 (9M 2023 vs 9M 2022); and
- for the three months ended September 30, 2023 compared to the
three months ended September 30, 2022 (Q3 2023 vs Q3 2022).
Segment
9M 2023 vs 9M 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna
12.7%
(1.4%)
1.5%
(7.5%)
20.1%
Thom Browne
10.4%
(2.9%)
(2.4%)
—%
15.7%
Tom Ford Fashion(*)
n.m.
n.m.
n.m.
n.m.
n.m.
Total for Zegna Group
22.9%
(1.9%)
12.5%
(6.9%)
19.2%
________________________________________
(*) Throughout this section considered not meaningful (n.m.) as the
Group began operating the Tom Ford Fashion segment following the
TFI Acquisition, which was completed on April 28, 2023, therefore
there is no comparison figure for the period.
Q3 2023 vs Q3 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna
3.0%
(3.0%)
2.0%
(8.7%)
12.7%
Thom Browne
6.3%
(6.8%)
4.6%
—%
8.5%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Total for Zegna Group
20.8%
(4.2%)
22.4%
(8.7%)
11.3%
Product line
9M 2023 vs 9M 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna branded products
20.6%
(2.3%)
—%
—%
22.9%
Thom Browne
10.1%
(3.0%)
(2.4%)
—%
15.5%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Textile
9.4%
1.0%
(0.2%)
—%
8.6%
Third Party Brands
(74.9%)
0.3%
(0.1%)
(67.0%)
(8.1%)
Other
6.5%
(0.3%)
0.1%
—%
6.7%
Total for Zegna Group
22.9%
(1.9%)
12.5%
(6.9%)
19.2%
Q3 2023 vs Q3 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Zegna branded products
8.0%
(4.2%)
—%
—%
12.2%
Thom Browne
5.8%
(6.8%)
4.6%
—%
8.0%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Textile
17.2%
1.5%
(0.4%)
—%
16.1%
Third Party Brands
(86.0%)
(0.1%)
(0.1%)
(71.5%)
(14.3%)
Other
29.3%
(2.9%)
0.6%
—%
31.6%
Total for Zegna Group
20.8%
(4.2%)
22.4%
(8.7%)
11.3%
Sales channel
9M 2023 vs 9M 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Direct to
Consumer (DTC)
Zegna branded products
21.9%
(3.1%)
—%
—%
25.0%
Thom Browne
22.9%
(8.2%)
8.6%
—%
22.5%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Total Direct to Consumer (DTC)
34.2%
(4.2%)
13.8%
—%
24.6%
Wholesale
Zegna branded products
14.1%
1.4%
—%
—%
12.7%
Thom Browne
1.5%
(0.1%)
(8.9%)
—%
10.5%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Third Party Brands and Textile
(28.1%)
0.8%
(0.1%)
(35.3%)
6.5%
Total Wholesale
6.4%
0.7%
11.3%
(15.5%)
9.9%
Other
n.m.
n.m.
n.m.
n.m.
n.m.
Total for Zegna Group
22.9%
(1.9%)
12.5%
(6.9%)
19.2%
Q3 2023 vs Q3 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
Direct to
Consumer (DTC)
Zegna branded products
8.3%
(5.7%)
—%
—%
14.0%
Thom Browne
18.6%
(13.5%)
24.4%
—%
7.7%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Total Direct to Consumer (DTC)
29.9%
(7.8%)
24.8%
—%
12.9%
Wholesale
Zegna branded products
6.7%
1.7%
—%
—%
5.0%
Thom Browne
(8.6%)
(0.8%)
(16.1%)
—%
8.3%
Tom Ford Fashion
n.m.
n.m.
n.m.
n.m.
n.m.
Third Party Brands and Textile
(36.0%)
0.3%
(0.2%)
(47.6%)
11.5%
Total Wholesale
6.6%
0.5%
19.6%
(21.6%)
8.1%
Other
n.m.
n.m.
n.m.
n.m.
n.m.
Total for Zegna Group
20.8%
(4.2%)
22.4%
(8.7%)
11.3%
Geographical area
9M 2023 vs 9M 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
EMEA (1)
25.0%
(0.8%)
12.8%
(7.5%)
20.5%
of which Italy
23.8%
0.4%
10.5%
(5.7%)
18.6%
of which UK
26.1%
(1.5%)
25.8%
(18.1%)
19.9%
of which UAE
42.6%
(2.6%)
7.9%
—%
37.3%
North America (2)
34.4%
1.8%
33.1%
(15.4%)
14.9%
of which United States
33.9%
2.1%
33.8%
(14.9%)
12.9%
Latin America (3)
23.5%
9.6%
—%
—%
13.9%
APAC (4)
16.0%
(4.9%)
2.6%
(2.1%)
20.4%
of which Greater China Region
15.3%
(5.3%)
1.5%
(0.7%)
19.8%
of which Japan
31.2%
(8.8%)
13.5%
(5.6%)
32.1%
Other (5)
(5.2%)
(0.3%)
18.2%
—%
(23.1%)
Total for Zegna Group
22.9%
(1.9%)
12.5%
(6.9%)
19.2%
Q3 2023 vs Q3 2022
Revenues growth
Foreign exchange
Acquisitions and
disposals
Changes in license agreements
where Zegna operates as a licensee
Organic Growth
EMEA (1)
27.7%
(1.7%)
22.0%
(11.1%)
18.5%
of which Italy
33.7%
0.7%
22.3%
(13.2%)
23.9%
of which UK
31.8%
(1.1%)
34.0%
(18.5%)
17.4%
of which UAE
33.6%
(11.8%)
24.3%
—%
21.1%
North America (2)
44.2%
(0.8%)
50.6%
(17.9%)
12.3%
of which United States
47.8%
(0.6%)
53.3%
(18.6%)
13.7%
Latin America (3)
19.6%
10.6%
—%
—%
9.0%
APAC (4)
3.5%
(8.2%)
9.0%
(2.7%)
5.4%
of which Greater China Region
(3.4%)
(8.6%)
2.6%
(0.9%)
3.5%
of which Japan
31.8%
(13.0%)
22.6%
(8.7%)
30.9%
Other (5)
51.7%
(2.5%)
51.4%
—%
2.8%
Total for Zegna Group
20.8%
(4.2%)
22.4%
(8.7%)
11.3%
_________________________
(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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231024304359/en/
Investor Relations/Group Communications/Media Francesca
Di Pasquantonio / Clementina Tito ir@zegna.com /
corporatepress@zegna.com
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