Ermenegildo Zegna (ZGN) H1 2024 TU earnings summary

Executive summary

• H1 2024 revenues reached €960.1 million, up 6.3% year-over-year (+8.1% at constant currency, -2.7% organic), with Q2 contributing €497 million (+4.7% year-over-year, flat organic).

• Direct-to-Consumer (DTC) channel drove growth, with DTC revenues up 14.8% year-over-year (+2.4% organic) in Q2, now representing 70% of group revenues.

• ZEGNA brand led with €566 million in H1 revenues (+6% organic), while Thom Browne declined 27% organic and Tom Ford Fashion contributed €148 million with mid-single-digit organic growth.

• The group continues to focus on brand development, retail expansion, and organizational improvements, especially in China.

• CEO reaffirmed confidence in long-term strategy, highlighting ongoing cost control initiatives amid a challenging 2024.

Financial highlights

• H1 2024 group revenues: €960.1 million (+6.3% year-over-year, +8.1% constant currency, -2.7% organic).

• Q2 organic revenue growth was flat (-0.4%), showing sequential improvement from Q1.

• DTC channel grew 10% reported and 2% organic in Q2, with positive impact from store conversions and TFF integration.

• ZEGNA brand delivered +5.9% organic growth in H1, accounting for nearly 60% of group revenues.

• Thom Browne Q2 revenues were €88 million, down 18% organic, but improved from -35% in Q1.

Outlook and guidance

• Management expects organic revenue for ZEGNA to remain flat for the year, with no major change in guidance.

• Cost controls are being implemented, with positive margin impact expected in H2.

• Retail expansion and new store openings are planned globally in H2, including key locations in Monte Carlo, New York, and Asia.

• Consensus revenue targets are recognized; EBIT guidance to be updated in September.

• Forward-looking statements highlight risks from macroeconomic, geopolitical, and consumer confidence factors.