Shares of Ermenegildo Zegna NV (ZGN) soared 5.93% in pre-market trading on Thursday after the luxury menswear group reported solid full-year 2024 results and provided an optimistic medium-term outlook.

The Italian fashion house posted a profit of €90.9 million for 2024, with revenues climbing 2.2% year-over-year to €1.95 billion. While profit was down from €135.7 million in 2023, the company noted this reflected a normalized 30% effective tax rate in 2024 compared to 20% in the prior year.

Zegna's adjusted earnings before interest and taxes (EBIT) came in at €184 million, with an adjusted EBIT margin of 9.5%. The company also saw its gross profit margin expand to 66.6% in 2024, up from 64.3% in 2023, driven by an increased proportion of direct-to-consumer sales.

In a sign of confidence, Zegna's board proposed a dividend of €0.12 per ordinary share, totaling approximately €30 million in distributions to shareholders.

Ermenegildo "Gildo" Zegna, Group Chairman and CEO, commented on the results: "Despite a challenging environment in 2024, the Group achieved Adjusted EBIT of €184 million. ZEGNA led this performance, driven by the brand's distinctive competitive edge and management's commitment to delivering results."

Looking ahead, the company updated its medium-term targets, projecting revenues in the range of €2.2-€2.4 billion and adjusted EBIT of €250-€300 million by 2027. This upbeat outlook appears to be fueling investor optimism and contributing to the stock's pre-market surge.

The positive reaction to Zegna's results suggests investors are encouraged by the company's ability to grow revenues and maintain profitability in a challenging environment, while also appreciating its strategic investments and optimistic future guidance.