Ermenegildo Zegna Group, parent of luxury fashion houses Zegna, Thom Browne and Tom Ford, recorded a double-digit profit growth last year, but management has warned of rising uncertainty due to the evolving war in the Middle East. 

The group’s profit in FY25 soared 20 per cent to €109.5 million ($126.5 million), supported by higher financial income and foreign exchange gains.

Gross profit margin expanded from 66.6 per cent in the prior year to 67.5 per cent, mainly driven by channel mix, with direct-to-consumer rising to 82 per cent of total branded products revenues.

Full-year revenues were €1.916 billion, down 1.5 per cent on a reported basis and up 1.1 per cent on an organic basis, despite a strong 10 per cent growth in the final quarter.

On an organic basis, Zegna sales rose 4.7 per cent, and Tom Ford Fashion increased 3.1 per cent. Meanwhile, Thom Browne revenues slid 12.2 per cent.

“Our group delivered solid revenue and net profit growth despite a continued challenging environment for the sector,” said executive chairman Ermenegildo ‘Gildo’ Zegna.

“Looking ahead, recent developments in the Middle East have introduced additional uncertainty across the sector. In this more complex environment, our priorities remain clear: Disciplined growth, strong cash generation, and rigorous execution to deliver on our targets,” he added.

The group said it has operations in certain Middle Eastern countries, and that the potential impact on its performance and the broader luxury sector remains uncertain, given the constant development of the situation.

Management, however, confirms that it remains focused on delivering on its 2027 targets while acknowledging the potential risks related to the duration of the conflict and its possible impact on global growth and consumer demand.