Zegna beats Q2 forecasts, bets on U.S. luxury boom with new store openings
Strong Q2 Performance and Expansion Plans
By Elisa Anzolin
MILAN, July 23 (Reuters) - Italian luxury group Ermenegildo Zegna said on Thursday its second-quarter organic revenue rose by 11%, driven by a strong performance in the Americas, where it sees further growth opportunities and plans to open new stores.
Financial Results
Revenue totalled €517 million ($590 million), beating an analysts' consensus of €493 million compiled by Visible Alpha.
Store Expansion Strategy
"We plan to open 14 to 15 stores this year across Zegna, Thom Browne and Tom Ford, with more than half of them in the United States as we remain confident in the strength of the U.S. luxury market", Executive Chairman Gildo Zegna told Reuters in an interview after the results.
Global Store Network Optimisation
The new openings will be balanced in part by a global store network optimisation programme, he added.
Regional Sales Performance
Americas
Sales in the Americas rose 22% on an organic basis in the quarter, supported by demand for personalization and made-to-measure services for the Zegna brand, as well as by the fashion show held at Malibu Pier in Los Angeles, he added.
Middle East and Europe
Sales in the Middle East remained positive during the quarter despite the U.S.-Iran conflict, while growth in Europe slowed to 1.6%, mirroring a broader slowdown in the luxury sector driven by weaker spending from tourists, especially Asian travellers.
Greater China
In the second quarter the Greater China region grew 8.6%.
Brand Performance
The group's flagship Zegna brand continued to drive sales growth globally.
($1 = 0.8767 euros)
(Reporting by Elisa Anzolin, editing by Alvise Armellini and Keith Weir)
