Massimo Giachetti/iStock Editorial via Getty Images In January this year, I've presented the Zegna Group ( NYSE: ZGN ) as an interesting opportunity for investors due to the company's sound financial results and the discounted valuation across the industry. Since the time of writing, the company published its comprehensive results for the last year and already a glimpse of 2024 through its Q1 revenue results. After I was almost ready to reap the fruits of my thesis when Zegna's stock was up 30%, we're now 12% ahead of this years' start, after the company scared investors with a negative outlook for the first quarter given a setback at Thom Browne due to the management's decision to streamline the wholesale business significantly.
Additionally, we saw challenging demand in China across the brands, while the medium-term outlook for the company was once again confirmed. As a consequence, I found it's time to discuss the latest results to review my initial investment thesis and check whether Zegna is still a promising investment opportunity for investors - so let's get right to it! Data by YCharts Operating Performance During the first quarter of 2024, Zegna achieved total sales of €463 million, which equals a growth rate of 8% compared to Q1/23. However, as projected by the management in early April, sales actually declined by 5% organically during the quarter, particularly due to a challenging environment in China and a significant cut of Thom Browne's wholesale exposure.
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