Ermenegildo Zegna(ZGN)2024-07-26 09:00Financial Data and Key Metrics Changes - In H1 2024, the Group reported €960 million in revenue, reflecting a 6% growth reported and 8% at constant currency [21][28] - Q2 contributed €497 million, up 5% year-on-year, with improved underlying organic growth from minus 5% in Q1 to flat in Q2 [21][28] - On an organic basis, Group revenues in H1 were down 2.7%, with Q2 organic growth at minus 0.4% [10][21] Business Line Data and Key Metrics Changes - The Zegna segment recorded positive organic growth in Q2 despite a flat performance in the textile business [10] - Thom Browne revenues in Q2 reached €88 million, down 18% in organic terms, showing improvement from minus 35% in Q1 [11] - TOM FORD FASHION revenues reached €83 million in Q2, with a DTC contribution close to 60% of brand revenues [17] Market Data and Key Metrics Changes - The Americas region recorded a 5% organic growth in Q2, driven by Zegna's strong performance [13] - Greater China region revenues declined by 10% organically in Q2, showing slight improvement from minus 13% in Q1 [13] - Japan showed strong double-digit organic growth for both Zegna and Thom Browne in Q2 [14] Company Strategy and Development Direction - The company aims to create a stronger, more global, and diversified luxury business, focusing on expanding TOM FORD into women's wear and leather goods [22] - The VILLA Zegna initiative aims to enhance customer engagement through immersive experiences [6][7] - The company is working on upscaling the sales team and improving merchandising, particularly in China [5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current global consumer environment as difficult to read, with rising volatility and uncertainty [26] - The company is focused on cost control while maintaining product authenticity and desirability [26] - Management remains optimistic about the potential for growth in the TOM FORD brand despite recent leadership changes [3][66] Other Important Information - The company integrated TOM FORD FASHION into its operations since April 29, 2023, impacting revenue reporting [9] - The textile performance was influenced by decreased demand from non-captive brands, leading to a decline in third-party brand revenues [12] Q&A Session All Questions and Answers Question: Can you comment on the organic performance in June versus the quarter and July trading, especially with the Chinese cluster? - Management indicated that the exit rate in July is not materially different from the average for Q2, with similar patterns observed across regions [36][68] Question: What are the implications of Peter Hawkings stepping down as Creative Director of TOM FORD? - Management confirmed that a successor will be announced soon and emphasized confidence in the ongoing leadership of TOM FORD FASHION [66] Question: How do you see the performance of Thom Browne in the coming quarters? - Management noted that the trend of Q2 is more reasonable for projecting the second half, with expectations for improved performance [73] Question: What is the outlook for Zegna in Greater China regarding traffic and sales? - Management confirmed that traffic is the primary driver of the decline, with good results in other retail metrics [104]