Dive Brief:
- Ermenegildo Zegna Group reported fiscal 2023 gross profit of 1.2 billion euros year over year, or approximately $1.3 billion, up from 928 million euros in 2022, according to a Friday earnings release.
- Selling, general and administrative expenses for the year were 901 million euros, and represented 47.3% of revenue, as compared to 695 million euros in 2022. Marketing expenses were about 115 million euros, or about 6% of revenue, up slightly from the previous fiscal year. Operating profit was 208 million million euros, an increase of 41% year over year. Group profit in fiscal 2023 was 136 million euros, up 108% year over year from 65.3 million euros
- The company also confirmed previously released preliminary fiscal 2023 revenue of 1.9 billion euros reported in February, which represented a 27.6% year-over-year increase.
Dive Insight:
Zegna Group chairman and CEO Ermenegildo “Gildo” Zegna said 2023 was a milestone year for the company.
“We have also fulfilled our 2023 sustainability commitments including those focused on traceability, diversity and inclusion, and in renewable energy adoption,” Zegna said. “We are on track with the integration of the TOM FORD FASHION business, which is enriching our unique proposition in luxury glamour.”
Zegna added that last year was also important for the company’s Thom Browne and Zegna brands. Both lines saw double-digit revenue growth in fiscal 2023.
Zegna became the first Italian luxury brand to be listed on the New York Stock Exchange when it debuted there in 2021.
The following year, the company announced a deal with Estée Lauder to become the long-term licensee for the Tom Ford brand and all its intellectual property, including its men’s and women’s fashion, accessories and underwear, fine jewelry, childrenswear, textile and home design products. That acquisition, completed last year, generated revenue of 236 million euros for fiscal 2023 but added a negative adjusted EBIT of 1.7 million euros, which the company said in its most recent release is mainly due to 16 million euro one-off charges related to the purchase price allocation of the segment.
The company is also strengthening its supply chain. It recently announced a “state-of-the-art footwear and leather goods production facility in Parma, Italy, expected to be completed by the end of 2026,” said Zegna.
“Looking ahead, I see a clear and defined path forward for our Group,” he added. “In the volatile world we live in, we must continue to be increasingly responsive, flexible and authentic to who we are. The Ermenegildo Zegna Group is a guardian of brands, and while short-term results are important, our top priority must always be their overall trajectory. What we should do is well defined; there will be challenges, but we know how to tackle them and how important it is to plan for the long term.”
