Ermenegildo Zegna sales drop 7% in third quarter as China weighs (updated)

Ermenegildo Zegna NV

22/10/2024 16:02

(Adds comments from conference call, background)
       MILAN, Oct 22 (Reuters) - Italian luxury group
Ermenegildo Zegna  JN0.F  reported a drop in third-quarter
underlying revenues on Tuesday, joining rivals in flagging a
slump in demand in China. 
    The company, whose brands include ZEGNA, Thom Browne and Tom
Ford, said organic revenues - excluding foreign exchange moves,
acquisitions and disposals, and changes to licensing agreements
- fell 6.7% in July-September, including a 22% drop in China. 
    LVMH  LVMH.PA , the world's biggest luxury group, reported a
3% fall in third quarter sales, also citing weakness in China. 
    "Looking ahead to the fourth quarter of 2024 and into 2025,
we continue to foresee an uncertain environment, particularly in
the Greater China Region," Chairman and CEO Ermenegildo Zegna
said in a statement. 
    He added on a call with analysts that the sales trend in
October was so far slightly better than the third quarter
overall, but warned the situation was very volatile. 
    Sales during China's Golden Week holidays in China were
still down from last year, he said.
    "Although third quarter revenues showed a slowdown for the
group, I am reassured by the continued positive performance of
the ZEGNA brand," Zegna said in a statement.
    Organic revenue at ZEGNA, the company's main brand, rose
2.5% in the quarter, but they fell at Thom Browne and Tom Ford.
    For the company as a whole, third-quarter revenues totalled
397 million euros ($430 million).
    Zegna told analysts the company did not plan significant
price hikes in the coming months. 
    "Going forward we just see moderate price increases to
reflect cost inflation", he said. 
    ($1 = 0.9240 euros)

 (Reporting by Elisa Anzolin
Editing by Keith Weir and Mark Potter)
 ((elisa.anzolin@thomsonreuters.com; 0039 0266129692;))