MILAN (Reuters) -Italian luxury group Ermenegildo Zegna 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, 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 AnzolinEditing by Keith Weir and Mark Potter)
