Loading...
01/11 10:51
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Despite strong net profit growth and improved margins in the Zegna segment, the company faces challenges such as declining EBIT in Thom Browne and Tom Ford segments, and higher cash absorption. The cautious outlook on China and flat EBIT guidance temper optimism. The Q&A highlighted risks, particularly in China, and management's reluctance to provide detailed guidance. Given these mixed signals and the company's market cap, a neutral stock price movement is expected.
Revenue EUR 928 million for H1 2025, a 2% organic decline year-over-year. The decline was offset by a 6% organic growth in the DTC channel.
Gross Profit EUR 626 million with a margin of 67.5%, an improvement of 110 basis points year-over-year. This was driven by a better channel mix, with DTC revenues accounting for 82% of group branded revenues, up from 76% in H1 2024.
Selling, General, and Administrative Costs EUR 502 million, up slightly from EUR 498 million in H1 2024. The incidence on revenues increased to 54.1% from 51.8%, driven by negative operating leverage, investments in talent and IT infrastructure, and higher initial costs for newly opened stores.
Marketing Expenses EUR 63 million, around 7% of revenues, consistent with the prior year despite significant events in both periods.
Adjusted EBIT EUR 69 million with a margin of 7.4%, down 100 basis points year-over-year. The decline was due to higher selling, general, and administrative costs and negative currency impacts.
Zegna Segment Adjusted EBIT EUR 94 million with a margin of 14.3%, up from 12.8% in H1 2024. The 150 basis point improvement was driven by higher operating leverage and cost control measures.
Thom Browne Segment Adjusted EBIT EUR 4 million, down from EUR 20 million in H1 2024. The decline was due to a sharp decrease in wholesale revenues and increased selling costs from DTC network expansion.
Tom Ford Fashion Segment Adjusted EBIT EUR -19 million, compared to EUR -12 million in H1 2024. The loss was attributed to planned investments in store network expansion, talent acquisition, and IT infrastructure.
Net Profit EUR 48 million, up 53% from EUR 31 million in H1 2024. The increase was driven by higher financial income and foreign exchange gains, as well as a lower tax rate of 30% compared to 35% in the prior year.
Capital Expenditure (CapEx) EUR 54 million, approximately 6% of revenues. Two-thirds of the CapEx was allocated to store network development, with the remainder for production and IT investments.
Trade Working Capital EUR 442 million, down from EUR 467 million in H1 2024. The reduction was due to better inventory management and lower receivables, linked to wholesale business streamlining.
Free Cash Flow EUR -23 million, compared to EUR -7 million in H1 2024. The higher cash absorption was due to lower operating cash flow.
Net Debt EUR 92 million as of June 2025, consistent with December 2024 levels.
Zegna Fall/Winter '25 marketing campaign: Launched with a focus on Zegna Torino suit made from Vellus Aureum fabric and Vetta shoes. Initial positive feedback received from presales and preorders.
Tom Ford Fashion campaign: First campaign by Haider Ackermann released, receiving positive feedback from journalists and media experts. Initial reactions in stores are also positive.
Zegna DTC network expansion: Opened a new store in Miami Design District and a by-appointment store at Plaza 66 in Shanghai, marking strategic growth in the U.S. and China.
Cost management: Actions taken to contain costs across all three brands, despite higher initial costs for new stores and investments in IT and CRM platforms.
Adjusted EBIT: Group adjusted EBIT reached EUR 69 million, with a decline due to higher selling costs and currency impacts. Zegna segment showed improvement, while Thom Browne and Tom Ford Fashion segments faced challenges.
Leadership change at Thom Browne: Sam Lobban started as CEO of Thom Browne on September 2, 2025.
Selling, General, and Administrative Costs: Higher incidence on revenues (54.1% compared to 51.8% in 2024) driven by negative operating leverage, costs for long-term growth (talent acquisition, IT infrastructure, CRM platform), and higher initial costs for newly opened stores.
Adjusted EBIT Margin: Decline in adjusted EBIT margin (7.4%, down 100 basis points) due to higher selling, general, and administrative costs and negative currency movements (euro appreciation against USD and renminbi).
Thom Browne Segment: Sharp decrease in adjusted EBIT (EUR 4 million compared to EUR 20 million in 2024) due to revenue decline in wholesale channel and increased costs from DTC network expansion.
Tom Ford Fashion Segment: Adjusted EBIT loss increased to EUR 19 million (from EUR 12 million in 2024) due to planned investments in store network expansion, talent acquisition, and IT infrastructure.
Market Conditions: Challenging and volatile sector conditions, particularly in the Greater China Region (GCR), which remains negative despite slight recent improvements.
Free Cash Flow: Higher free cash absorption (EUR 23 million compared to EUR 7 million in 2024) driven by lower operating cash flow.
Adjusted EBIT for 2025: The company confirms that adjusted EBIT for the second half of 2025 will be higher compared to the first half. However, the sector remains challenging and volatile. Actions have been implemented to protect profitability.
Capital Expenditures (CapEx): CapEx for 2025 is expected to have an incidence on revenue of around 6%-7%. Investments in the second half will focus on the greenfield production site for footwear and store network development.
Tax Rate: The tax rate for 2025 is expected to be in the range of 28%-30%, aligning with year-end expectations.
Regional Market Trends: Strong momentum is expected to continue in Europe, the Middle East, and the Americas. The Greater China Region (GCR) remains challenging and volatile, with recent weeks showing slight improvement but still negative trends.
The selected topic was not discussed during the call.
Despite strong net profit growth and improved margins in the Zegna segment, the company faces challenges such as declining EBIT in Thom Browne and Tom Ford segments, and higher cash absorption. The cautious outlook on China and flat EBIT guidance temper optimism. The Q&A highlighted risks, particularly in China, and management's reluctance to provide detailed guidance. Given these mixed signals and the company's market cap, a neutral stock price movement is expected.
The earnings call highlights a mix of positive and negative elements. While there is growth in the U.S. and EMEA DTC channels, significant declines in Greater China and wholesale revenue, along with economic uncertainties and tariff impacts, weigh heavily. The lack of a share buyback program and management's unclear responses further contribute to a negative sentiment. Despite some optimistic guidance, the overall market reaction is likely to be negative due to these challenges, especially given the company's market cap.
The earnings call summary indicates challenges such as declining wholesale revenues, operational difficulties, and a negative trend in China. Despite some positive aspects like DTC growth and increased gross margins, the Q&A session highlights concerns about the U.S. market and unclear management responses. The market cap suggests moderate volatility, leading to a predicted stock price movement in the negative range (-2% to -8%).
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
