Ermenegildo Zegna Group, the owner of Zegna and Thom Browne and licensee of Tom Ford Fashion, said a rise in direct-to-consumer sales across all three brands helped to offset a slump in wholesale revenue in the first quarter of fiscal 2025. Shares rose 2 per cent in pre-market trading.
Group revenue was down 1 per cent year-on-year to €458.8 million in the quarter. By brand, Zegna revenues increased 3.6 per cent year-on-year to €292.9 million; Thom Browne was down 18.9 per cent to €64.2 million; and Tom Ford revenues increased 3.8 per cent to €67.5 million, following Haider Ackermann’s widely praised March debut.
DTC sales across the group were up 5.2 per cent year-on-year to €345.1 million. By brand, Zegna was up 4.7 per cent to €250.8 million; Thom Browne is up 3.5 per cent to €46.2 million; and Tom Ford Fashion rose 10 per cent to €48 million. However, group wholesale revenues dropped 19.8 per cent, driven by a drag from Thom Browne, whose wholesale revenues were down 48 per cent as the company continues its efforts to streamline the channel.
“We are encouraged by these early positive results, but also mindful of the recent geopolitical and economic uncertainties. And while we have not observed significant changes in customers’ behaviour across our brands, we remain vigilant, agile, and focused on our strategic priorities knowing that what truly matters is the strength of our brands and our unwavering commitment to staying close to our customers,” chairman and CEO Ermenegildo “Gildo” Zegna said in a statement.
By region, EMEA, the company’s largest market, was down 1.6 per cent to €154 million, largely due to the decline at Thom Browne.
Greater China revenues were down 11.6 per cent to €123.3 million. “We continue to have a prudent approach on the region, even if we are starting to see some initial proof that our actions are paying off,” said Paola Durante, chief of external relations, on the earnings call. “We are experiencing ongoing positive reactions to new product launches [and] to new initiatives.” The rest of APAC fared better, with revenues up 6.5 per cent to €55.9 million. The positive performance was driven by Japan, where all three brands performed well, with a boost from Singapore as well, Durante said.
The Americas remains Zegna Group’s best-performing (and second-largest) region for all three brands, said Durante. Revenues were up 9.5 per cent to €125 million. The region posted strong organic growth, Durante said, highlighting the Zegna brand as the standout with double-digit brand growth.
Addressing the tariff situation, group COO and CFO Gianluca Tagliabue offered comments on “the topic that has been on the top of everybody’s agenda over the past week”, as he put it. He revealed that, since the beginning of April, Zegna Group has not seen significant changes in the overall demand globally across any brands or projects. “On the contrary, if anything, we have seen some improvements, particularly in the Zegna brand alongside the launch of the Spring/Summer 2025 drop, which I believe is more related to the successful launch of the summer drop I just mentioned. This is true globally, but especially in the US,” he said.
Tagliabue added that Zegna will not consider shifting its sourcing from Italy due to the tariffs, noting that being ‘Made in Italy’ is an important pillar of the brand. “We are definitely not thinking about moving any activities of manufacturing [to] the US,” he said. “That is not feasible.”
Regarding the 10 per cent increase in tariffs on US imports, Tagliabue assured investors that Zegna Group will take the “necessary actions” in response. For Winter 2025, the company is considering a mid-single-digit increase in pricing in the US.
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