Italian fashion house Ermenegildo Zegna’s revenues up 15.5% in FY22

Excluding the Greater China Region (GCR), which was affected by COVID-related restrictions throughout 2022, particularly from mid-March to the end of May and then again in the fourth quarter, revenues were up 42 per cent YoY for FY22 and up 24.7 per cent YoY for Q4 FY22, Ermenegildo Zegna said in a press release.

Leading Italian luxury fashion house Ermenegildo Zegna Group has reported revenues of €1,493 million for the financial year 2022 (FY22), an increase of 15.5 per cent year-over-year (YoY). The company’s revenues for the fourth quarter (Q4) of the year were €407 million, down 0.5 per cent, compared to the corresponding period of the previous year.

Revenue growth was especially strong in the US, even with a particularly strong comparison base in Q4 2021, reaching 26.1 per cent YoY for Q4 FY22 and 53.5 per cent YoY for FY22. This comes despite the end of distribution license with Tom Ford International, which resulted in an 8 per cent reduction of the company’s revenue growth for Q4 FY22 in the US.

Revenues in Europe, the Middle East, and Africa (EMEA) also continued to grow by double-digits percentage points compared to Q4 FY21, supported by exceptional results from the Middle East and Africa (MEA), strong performance in Italy, and consistent performance in other countries in Europe.

After a positive Q3, in Q4 FY22, the company saw a 30 per cent decline in revenues from the GCR due to a new wave of particularly impactful COVID-related restrictions put in place in October and November, as well as some further unplanned temporary store closures in December due to a wave of contagion. This resulted in Q4 FY22 group revenues decreasing 0.5 per cent YoY.

On January 23, 2023, Zegna signed an agreement for the acquisition of a minority stake in Canadian technical trail-running shoe company Norda Run, with the option to gradually increase its stake over the next nine years.

Revenues for the Zegna segment, which includes Zegna-branded products as well as the textile and third-party brands product lines, reached €334 million in Q4 FY22, a decrease of 2.2 per cent YoY, with the drop in GCR direct-to-consumer (DTC) revenues and the end of the Tom Ford International distribution license agreement more than offsetting solid performance in other markets. Zegna segment’s revenues for FY22 were €1,177 million, a 13.7 per cent YoY increase.

The Thom Browne segment continued to be a significant growth driver for the group, with Q4 FY22 revenues of €76 million, up 11.5 per cent YoY. In FY22, the Thom Browne segment posted revenues of €331 million, up 25.3 per cent YoY.

Zegna-branded products revenues were €274 million for Q4 FY22, down 2.7 per cent YoY, but up double-digit YoY excluding GCR, benefitting from the rollout of the One Brand collection since July 2022. Revenues for FY22 were €924 million, up 9 per cent YoY. Shoes showed strong performance throughout the year, while growth in the luxury leisurewear segment remained steady. Tailoring and made-to-measure both saw a strong rebound in 2022, especially in the US and EMEA.

Textile revenues were up 7.1 per cent YoY for Q4 FY22, reaching €38 million. Revenues for the year were up 33.8 per cent to €137 million, with all the key subsidiaries experiencing double-digit growth.

Third-party brands revenues reached €18 million in Q4 FY22, down 18.8 per cent YoY, impacted by the termination of the Tom Ford International distribution license which ended with deliveries of the FW 2022 collection, replaced by a supply agreement. Excluding this impact, third-party brand revenues were up by strong double-digits in Q4 FY22.

The group expects a moderate improvement in adjusted EBIT and a substantial improvement in profit for FY22 compared to 2021 despite significant headwinds in the GCR. The group also continues to expect a cash surplus increase in the second half of the year, in line with guidance. Medium-term targets remain unchanged as Zegna continues to focus on executing its strategy, targeting €2 billion in revenues and 15 per cent adjusted EBIT margin in the medium term, excluding the Tom Ford fashion business.

Fibre2Fashion News Desk (DP)