Anthony Charchafji

Anthony Charchafji asked about Zegna retail productivity, which is nearing EUR 20,000 per square meter, and the key drivers for its continued improvement. He also inquired about the impact of the new perfume rollout for FY2026, the reasonableness of the EUR 173 million EBIT consensus for 2025, and the group's exposure to Saks, including revenue, inventory, and potential provisions.

Answer

Gianluca Ambrogio Tagliabue, COO of Ermenegildo Zegna, explained that Zegna DTC productivity is driven by mix and price elevation (e.g., Vellus Aureum, Triple Stitch NAM), experiential events like Villa Zegna, and client engagement (Zegna Friends, targeting 'doers'). He deemed the 2025 EBIT consensus reasonable, pending Saks-related bad debt accruals. Paola Durante, Chief of External Relations, clarified that Saks Global's incidence on group revenues is in the low to middle single-digit area, with inventory not being the primary concern but rather credit exposure.

Anthony Charchafji from BNP Paribas asked about the key drivers for Zegna retail productivity, the impact of the new perfume rollout, the reasonableness of the 2025 EBIT consensus, and the group's exposure to Saks, including inventory and potential provisions.

Answer

Gianluca Ambrogio Tagliabue, COO, explained that Zegna DTC productivity is driven by mix and price elevation, events like Villa Zegna, and growth in Zegna Friends. He stated the 2025 EBIT consensus is reasonable before Saks accruals. Paola Durante, Chief of External Relations, and Gianluca Ambrogio Tagliabue clarified that Saks Global represents a low single-digit incidence on group revenues, with the issue being bad debt accrual rather than inventory.

Anthony Charchafji inquired about current trading trends and expectations for Q4, sought color on Zegna's mainland China performance regarding traffic and demand segments, and asked about the expected FX impact on margins for the current and upcoming year.

Answer

Gianluca Tagliabue, Group CFO and COO, indicated Q4 trends were not substantially different from Q3, noting a steeper FX impact in Q4. For China, he highlighted strong performance from top-tier clients on high-price items, with no consistent traffic or affordable spending recovery. He mentioned improvements in Hong Kong and second-tier cities, while Beijing and Shanghai lagged. Regarding FX, he stated effective hedging for FW25 and SP26, protecting selling margins, and mentioned potential price adjustments for FW26 due to tariffs. Paola Durante, Chief of External Relations, added that September price increases due to tariffs were well-received.

Anthony Charchafji inquired about current trading trends and Q4 2025 expectations, Zegna's mainland China performance focusing on traffic and demand segments, and the anticipated FX impact on margins for 2025 and 2026.

Answer

Gianluca Tagliabue, Group CFO and COO, stated that Q4 trends are not substantially different from Q3, noting a steep FX headwind for Q4. For China, he observed strong performance from top-tier customers but inconsistent traffic and affordable spending, with improvements in Hong Kong and second-tier cities. Paola Durante, Chief of External Relations, and Gianluca Tagliabue confirmed effective FX hedging through Spring 2026, protecting selling margins, and mentioned well-received price increases due to tariffs.

Anthony Charchafji with BNP Paribas inquired about the drivers behind the 110 basis point improvement in gross profit margin, specifically asking for a detailed bridge including pricing effects and channel mix. He also sought confirmation on whether a gross margin of at least 67% is expected for H2 despite tariffs. Additionally, Charchafji asked if the company still expects H2 consensus figures of approximately 4% organic revenue growth and a flat EBIT margin, implying an adjusted EBIT of EUR 173 million.

Answer

Gianluca Tagliabue, Group CFO and COO, explained that the gross margin evolution was primarily driven by the increasing weight of DTC revenues, reaching 88% compared to 86% last year. He highlighted the focus on the quality of DTC, monitoring sell-through at full price, and the journey of personalization as key drivers. For H2, Tagliabue confirmed the expectation of low single-digit organic revenue growth for the full year, noting that the consensus of EUR 1.923 billion correctly reflects currency changes. He also stated that the adjusted EBIT consensus of EUR 173 million is considered realistic.

Anthony Charchafji of BNP Paribas posed several questions regarding the margin impact from the declining wholesale business, particularly at Thom Browne and Tom Ford, and asked for comments on the consensus adjusted EBIT. He also inquired about current trading, H2 comparative performance, potential benefits from a competitor's supply chain issues, and the implications of the Temasek investment on share liquidity and listing strategy.

Answer

COO & CFO Gianluca Ambrogio Tagliabue addressed the margin question, stating that H1 EBIT margin seasonality would be similar to or higher than last year due to wholesale streamlining and new store ramp-ups. He affirmed that the current consensus for top and bottom-line figures is 'directionally reasonable.' Chairperson & CEO Ermenegildo Zegna commented that H2 regional trends would likely mirror H1, with strength in the Gulf and Americas and volatility in Asia. He dismissed the idea of a dual listing, confirmed no intention to go private, and framed the Temasek investment as a long-term strategic positive for all stakeholders.

Anthony Charchafji of BNP Paribas questioned the margin impact of the declining wholesale business for H1 and the full year. He also asked about current trading, H2 comparative performance, potential benefits from a competitor's supply chain issues, and the company's view on share liquidity and listing strategy following the Temasek investment.

Answer

COO and CFO Gianluca Ambrogio Tagliabue stated that H1 margins would reflect seasonality similar to or greater than the prior year due to wholesale streamlining and store opening costs, deeming the full-year consensus EBIT "directionally reasonable." Chairperson & CEO Ermenegildo Zegna anticipated H2 trends would mirror H1, passed on commenting on competitors, and affirmed the company's commitment to being listed, stating a dual listing is not a priority and the Temasek partnership strengthens long-term strategy.

Anthony Charchafji from BNP Paribas questioned the impact of declining wholesale revenues on margins, the outlook for DTC trading in H2 given changing comparable bases, any potential benefits from a competitor's supply chain issues, and the implications of the Temasek investment on share liquidity and listing strategy.

Answer

COO and CFO Gianluca Ambrogio Tagliabue stated that H1 margins would be impacted by wholesale streamlining and new store ramp-ups, but found the current consensus reasonable. Chairperson and CEO Ermenegildo Zegna expects H2 trends to mirror H1, declined to comment on competitors, and affirmed the company's commitment to being public, seeing no major issue with liquidity and ruling out a dual listing.

Anthony Charchafji from BNP Paribas asked about year-to-date price increases by brand, whether Tom Ford Fashion's Q1 revenue was up year-over-year on a pro forma basis, and if Q2 would benefit from delivery timing. He also questioned the marketing strategy, asking if the Oasi Zegna activation signaled a move to a broader audience or a focus on deepening relationships with existing exclusive clients.

Answer

Group COO and CFO Gianluca Tagliabue addressed the first two questions, confirming that price increases were in the low single-digit range and that Tom Ford Fashion's Q2 is expected to be higher than Q1 due to delivery timing and new store openings. Group CEO Gildo Zegna explained the marketing strategy, stating the company will pursue a dual approach: deepening relationships with Very Important Clients through exclusive events and personalization, while also using iconic products and brand experiences like Oasi Zegna to attract new customers.