Dive Brief:
- Ermenegildo Zegna Group posted a Q1 2025 revenue of 458.8 million euros, or about $522.2 million, representing a 1% year-over-year decline, according to a Thursday earnings report.
- The Thom Browne brand posted a 48% year-over-year wholesale decline and a 19% revenue decline in Q1. That downturn was somewhat offset by 4% increases at both Tom Ford and at Zegna, the company’s largest brand.
- The company’s decision to shift away from wholesale resulted in a 5% year-over-year DTC channel sales gain, to 345 million euros, for the first quarter. However, wholesale branded revenues fell 20% for the period. DTC now represents 81% of Zegna Group’s branded product revenue, per the report.
Dive Insight:
The DTC channel shift has shown early success for Ermenegildo Zegna Group.
“Despite the ongoing challenges in our sector, all our three brands have reported positive performance in the strategic Direct-to-Consumer channel,” company Chairman and CEO Ermenegildo “Gildo” Zegna said in a statement.
He added that the Zegna brand’s positive DTC results were largely driven by strong sales in the Americas and in the region comprising Europe, the Middle East and Africa.
The revenue decline at the Thom Browne brand was primarily impacted by the decision to reduce exposure in the wholesale channel, Zegna said. At Tom Ford, improving momentum in the U.S. and Europe contributed to a 10% growth in DTC sales. Zegna said that interest in the Tom Ford brand was particularly notable following a successful March 2025 runway debut from newly appointed designer Haider Ackermann.
“We are encouraged by these early positive results but also mindful of the recent geopolitical and economic uncertainties,” Zegna said. “And while we have not observed significant changes in customers’ behavior across our brands, we remain vigilant, agile, and focused on our strategic priorities.”
In the EMEA region, which represents 34% of the company’s revenue, there was a 2% year-over-year decline in Q1 to 154 million euros. China revenue fell 12% to 123 million euros, which the company attributed to a “subdued consumer environment in the region affecting all three brands.”
Meanwhile, revenue in the rest of the Asia-Pacific region grew 7% to 56 million euros, driven by growth from all three brands in Japan.
Zegna Group saw strong revenue growth in the Americas, which was up 10% to 125 million euros. The company attributed the results mainly to double-digit growth at its Zegna brand, which did especially well in the U.S., per the release.
Zegna Group Chief Operating Officer and CFO Gianluca Tagliabue was circumspect in regards to possible demand shifts in the U.S. resulting from President Donald Trump’s proposed 10% tariff increase on imported products.
In a Thursday conference call with investors following the earnings release, Tagliabue said the company was considering “a mid single-digit increase in pricing in the U.S.” He added that the company was not planning to change its sourcing strategy, which makes most of its products in Italy.
“I want to reaffirm what I’m sure you already know,” Tagliabue said. “We will take the necessary actions to protect our EBIT.”
