Chris Huang

Chris Huang inquired about the Zegna brand's DTC performance, specifically excluding Chinese consumers, and sought confirmation on a high-teens percentage growth in Q4. He also asked for insights into the market mood for 2026, excluding China, and the expected foreign exchange impact on revenues and margins for 2026.

Answer

Gianluca Ambrogio Tagliabue, COO of Ermenegildo Zegna, confirmed the calculation for Zegna DTC ex-China and indicated a similar 2.6% FX headwind for 2026 as in 2025, expecting margins to move sideways due to this impact, partially mitigated by hedging. Gildo Zegna, Executive Chairman, added that America continues to show resilience and strong growth, followed by the Gulf area, with Europe performing well, and January 2026 trends mirroring Q4 2025.

Chris Huang with UBS inquired about the Zegna brand's DTC growth excluding China, the market mood for 2026 in other regions, and the anticipated foreign exchange impact on revenues and margins for 2026.

Answer

Gianluca Ambrogio Tagliabue, COO, confirmed the high-teens growth calculation for Zegna DTC ex-China and noted a 2.6% FX headwind in 2025, expecting a similar impact in 2026, leading to sideways margin movement. Gildo Zegna, Executive Chairman, added that America and the Gulf area show resilience, with Europe also performing well at the start of 2026.

Chris Huang followed up on Q4 current trading, asking if high single-digit DTC growth at the group level was achievable given Q3's improvement and a strong Q4 last year. He also sought clarification on the Chinese consumer cluster's performance and asked for an update on Zegna segment margin expectations for the full year 2025.

Answer

Gianluca Tagliabue, Group CFO and COO, clarified that the Chinese consumer cluster experienced a high single-digit negative trend, with a steeper decline for Chinese consumers buying abroad. He refrained from giving specific Q4 channel expectations but noted that trends were not different from Q3, acknowledging a challenging comparison base from last year's solid performance. He suggested that the consensus for full-year revenues on the company's website was a reasonable indication. Paola Durante, Chief of External Relations, reiterated that the previously given Zegna segment margin expectation of 13-14% for the full year was an indication and that Q3's comp growth was largely aligned with expectations.

Chris Huang followed up on Q4 2025 current trading, asking if high single-digit DTC growth at the group level is achievable given Q3's improvement and a strong Q4 2024. He also sought clarification on the Chinese consumer cluster's performance (mid-single vs. high single-digit decline) and an update on Zegna segment margin expectations for the full year 2025.

Answer

Gianluca Tagliabue, Group CFO and COO, indicated that Q4 trends are consistent with Q3, acknowledging a challenging comparison to a solid Q4 2024, and referred to the consensus on the website for full-year revenues as reasonable. He clarified that the Chinese consumer cluster experienced a high single-digit negative trend, with a steeper decline for Chinese consumers abroad. Paola Durante, Chief of External Relations, stated that it was not the appropriate time to update margin expectations, but noted that comp growth was aligned with internal plans.

Chris Huang from UBS inquired about current trends in China, asking for more color on early signs of improvement, specifically if it's driven by traffic or conversion, and if the decline in Chinese consumer spending in the first two months of the quarter was less than double-digit, in the single-digit area. He also questioned the Zegna segment's margin outlook for 2025, expecting 13%-14%, and how this squares with potential H2 contraction given H1-weighted margin investments. As a follow-up, Huang asked for confirmation on the full-year group marketing expense as a percentage of sales.

Answer

Paola Durante, Chief of External Relations, indicated that detailed comments on China trends would be reserved for the Q3 revenue call, but Gianluca Tagliabue, Group CFO and COO, acknowledged some less negative trends in recent weeks, partly due to easier comparisons, while remaining cautious. Regarding Zegna segment margins, Tagliabue explained that the 13%-14% range for the year accounts for planned H2 investments, such as an Art Basel event in Miami, and a strategic decision not to cut investments that fuel long-term brand potential. Paola Durante confirmed that the full-year group marketing expense is expected to be around 6% of sales.

Chris Huang of Morgan Stanley inquired about current business trends, asking for an indication of performance in April and how March compared to the overall quarter. He also sought quantification of Zegna DTC trends by consumer nationality, specifically for Chinese and local European clients, and asked for more detail on the expected magnitude of the Thom Browne wholesale channel reduction in coming quarters.

Answer

Group COO and CFO Gianluca Tagliabue responded, stating that the March exit rate for DTC was in line with the quarterly trend. For Zegna's DTC channel, he noted that the decline in spending by Chinese nationals was closer to mid-single digits, while demand from Europeans remained solid with double-digit growth. Regarding Thom Browne, Tagliabue clarified that while the wholesale decline in the next quarter would be much lower than Q1's 50% drop, it was still expected to be in the double-digit range.

Asked about consumer nationality growth trends in Q3, particularly for Chinese, American, and European customers; the phasing of marketing expenses in H2; and the profitability outlook for TOM FORD.

Answer

Executives noted that American, Middle Eastern, and Southeast Asian customer spending has doubled on a two-year stack, while European growth is also significant. The Chinese cluster is flat vs. 2021 with some recent softness in the mainland but strength in Hong Kong/Macau. American and European demand remained steady in Q3. Marketing spend is expected to increase by about 0.5 percentage points in H2. Details on TOM FORD's future will be provided at the December Capital Markets Day.