At constant currency, revenues were up by 13.1% year-on-year. Zegna noted that revenue growth was driven by direct-to-consumer (DTC) results for both the Zegna and Thom Browne brands.
The revenue increase for the quarter comes despite a negative impact from Tom Ford products, without which would mean a revenue increase of 19.1% (18.9% at constant currency).
During the second quarter of 2023, the group expects to complete the Tom Ford Fashion business transaction with The Estée Lauder Companies and begin operating the business under a long-term licensing agreement.
Zegna brought in revenues of €319.3 million, up by 12.6% year-over-year and 11.9% at constant currency, while Thom Browne had revenues of €113.3 million, up 15.4% year-over-year and up 16.1% at constant currency.
DTC revenues were up by 24.9% in the first quarter and accounted for 64% of the group’s revenues in the period compared with 58% in the first quarter of 2022, consistent with a shift towards retail. DTC revenues for Zegna totalled €229.6 million, up 24.8% year-over-year, while Thom Browne had €42.8 million, up 25.4% year-over-year.
Wholesale revenues were €154.7 million, down 2.4% year-on-year due to the impact from Tom Ford products on the Third-Party Brands and Textiles wholesale operations. Wholesale revenues for Zegna-branded products were up 5.5% year-on-year, while Thom Browne was up 9.3% in this channel.
Regionally, revenues were up 15.9% in Greater China for a total of €164.5 million in the quarter, up by 17.2% at constant currency. Zegna noted that the APAC region as a whole had €205.3 million in revenues, up 17.4% year-on-year, with Japan up 31.9% (and 38.8% at constant currency).
Meanwhile, EMEA totalled €150.1 million, up 11.6%. The company highlighted that the Middle East and Africa especially outperformed thanks to strong retail trends in the United Arab Emirates. Revenues in North America were up 6.2% to €65.6 million and were particularly affected by the negative impact of Tom Ford products.
Chairman and CEO Ermenegildo “Gildo” Zegna said: “We started 2023 with an encouraging upswing led by further reopening in the Greater China Region following Covid-19-related restrictions. We also saw robust growth across our business in the United States and Europe driven by our own retail.
“For Zegna, growth was driven by a healthy increase in productivity, which is one of our strategic priorities. This ongoing strength underscores the success of both our brands as well as the value of our vertically integrated Luxury Textile Platform, which has allowed us to scale up our internal manufacturing and production capabilities.”
“We remain mindful of the ever-changing global environment. As the year progresses, we continue to relentlessly execute Our Road strategy to achieve our medium-term ambitions. Last but not least, we look forward to completing the Tom Ford Fashion business transaction alongside The Estée Lauder Companies, which we anticipate to close in the second quarter and start operating the business under a long-term licensing agreement with The Estée Lauder Companies.”