Core Viewpoint - Ermenegildo Zegna N.V. announced a new leadership structure effective January 1, 2026, following a thorough succession planning process by the Board of Directors [1] Leadership Changes - Ermenegildo "Gildo" Zegna will transition from Group Chairman and CEO to Group Executive Chairman [1]

Core Viewpoint - The investment outlook for Ermenegildo Zegna (NYSE: ZGN) remains positive, with expectations of a 10% compound annual growth rate (CAGR) in sales despite recent short-term weaknesses [1] Group 1: Investment Strategy - The investment approach focuses on long-term growth while also considering short-term opportunities to uncover alpha [1] - Emphasis is placed on bottom-up analysis to assess the fundamental strengths and weaknesses of individual companies [1] - The investment duration is categorized as medium to long-term, targeting companies with solid fundamentals and sustainable competitive advantages [1]

Group 1 - Tesco PLC is currently ranked 11 within the Retail-Wholesale sector according to the Zacks Sector Rank, which evaluates the strength of individual sector groups [2] - The Zacks Rank system indicates that Tesco PLC has a Zacks Rank of 1 (Strong Buy), suggesting a favorable outlook for the stock [3] - The Zacks Consensus Estimate for Tesco PLC's full-year earnings has increased by 5.8% over the past quarter, indicating improved analyst sentiment and a stronger earnings outlook [4] Group 2 - Year-to-date, Tesco PLC has returned approximately 31.9%, significantly outperforming the average gain of 7.7% in the Retail-Wholesale group [4] - Tesco PLC belongs to the Retail - Supermarkets industry, which is ranked 76 in the Zacks Industry Rank, and has outperformed this group, which has gained about 15.6% year-to-date [6] - Another outperforming stock in the Retail-Wholesale sector is Ermenegildo Zegna N.V., which has increased by 26.9% year-to-date [5]

Group 1 - The Ermenegildo ZEGNA Group held a Q3 2025 revenues call with senior management present, including the CFO and COO [1] - The presentation materials are available on the company's website, indicating a commitment to transparency [1] - Forward-looking statements will be made during the call, highlighting the company's strategic outlook [2] Group 2 - Actual results may differ significantly from the forward-looking statements due to various risks and uncertainties [2] - The company has referenced its SEC filings for a detailed description of these risks [2]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported revenues of EUR 398 million, representing a 4% organic growth, with nine months' revenues totaling EUR 1.3 billion [4][5] - The Direct-to-Consumer (DTC) channel showed a sequential acceleration, growing by 9% in the quarter, contributing significantly to overall revenue growth [4][8] - The company confirmed expectations for Zegna's wholesale performance to decline in the mid-teens by year-end due to increased control over distribution [10] Performance by Business Line - Zegna brand recorded revenues of EUR 249 million in Q3, up 6%, driven by strong DTC performance in EMEA and the Americas [4][5] - Thom Browne generated EUR 48 million in revenues, showing slight negative growth but with sequential improvement in both channels [4][5] - Tom Ford Fashion reported EUR 66 million in revenues, up 4% organic, driven by DTC channel success and positive reception of the fall-winter 2025 collection [5][12] - Textile revenues remained flat, while other revenues related to finished products grew by 12% [5] Performance by Market - EMEA accounted for 36% of total revenue in the first nine months, with a 3% growth in Q3, primarily from DTC channels [6] - The Americas, contributing 29% of nine months' revenue, recorded a 13% growth in Q3, led by strong DTC performance [7] - Greater China, which accounted for 23% of total revenues, saw a 7% decline in Q3, although there were signs of sequential improvement [7][9] - The rest of APAC represented 12% of nine months' revenues, with a 3% growth in Q3, driven by strong performances in Singapore and Korea [8] Company Strategy and Industry Competition - The company is focused on enhancing its DTC channel, which accounted for 82% of revenues in the first nine months, and aims to continue expanding its retail presence [8][12] - Management emphasized the importance of maintaining a disciplined approach to project implementation and brand priorities to navigate the current volatile environment [20] - The company is also investing in partnerships, such as a multi-year collaboration with Art Basel, to enhance brand visibility and customer engagement [14][18] Management's Comments on Operating Environment and Future Outlook - Management noted that currency fluctuations continue to pose challenges, with expected impacts of 3-4 points in Q3 and 4-5 points in Q4 on organic to reported results [19] - The consumer demand environment remains volatile, particularly in China, which is expected to stabilize into a new normal with balanced growth rates in the coming years [19][20] - Management expressed cautious optimism, focusing on key priorities for each brand and maintaining a solid base for future growth [20] Other Important Information - The company highlighted the successful launch of the "It's Not a Suit, It's a Zegna" campaign, celebrating its heritage and innovation [18] - The reopening of the fully renovated store in Dubai Mall was noted as a significant milestone for the brand [18] Q&A Session Summary Question: Current trading and expectations for Q4 - Management indicated that current trading trends in Q4 are not substantially different from Q3, with expectations for continued performance [24][25] Question: Performance in mainland China - Management reported that high-end spending is performing well, but there is still volatility in traffic and more affordable spending [25][26] Question: FX impact on margins - Management confirmed that while FX impacts exist, they have hedged well, and the focus will be on managing prices effectively [28][56] Question: Consumer environment across regions - Management noted solid growth in the U.S. and Europe, with a slight improvement in Greater China, driven by strong product acceptance [35][36] Question: Wholesale sector trends - Management stated that rationalization efforts in the wholesale channel are ongoing, with selective conversions continuing into next year [37][38] Question: Performance of Tom Ford - Management highlighted positive reception of the new collection and ongoing efforts to enhance CRM and store presence [40][41] Question: Impact of Haider's new collection - Management acknowledged the "wow effect" from the new collection but emphasized that it is part of a broader strategy to improve overall performance [95][96]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported revenues of €398 million, representing a 4% organic growth, with nine months' revenues totaling €1.3 billion [4][5] - The DTC channel showed a sequential acceleration, growing by 9% in the quarter, contributing significantly to the overall revenue growth [4][8] - The company confirmed a mid-teens decline in wholesale performance for Zegna by year-end, reflecting a strategic shift towards retail [10][12] Performance by Business Line - Zegna brand revenues reached €249 million in Q3, up 6%, driven by strong DTC performance in EMEA and the Americas [4][5] - Thom Browne reported revenues of €48 million in Q3, showing slight negative growth but with sequential improvement [4][5] - Tom Ford Fashion achieved €66 million in revenues, up 4% organic, supported by the successful reception of the fall-winter 2025 collection [5][12] - Textile revenues remained flat, while other revenues related to finished products grew by 12% [5] Performance by Market - EMEA accounted for 36% of total revenue in the first nine months, with a 3% growth in Q3, primarily from DTC channels [6][7] - The Americas, contributing 29% of nine months' revenue, recorded a 13% growth in Q3, led by strong DTC performance [7][8] - Greater China, which represented 23% of total revenues, saw a 7% decline in Q3, although there were signs of sequential improvement [7][8] - The rest of APAC accounted for 12% of revenues, showing a 3% growth in the quarter, particularly in Singapore and Korea [8] Company Strategy and Industry Competition - The company is focusing on increasing control over the distribution of iconic products and converting wholesale points of sale into retail concessions [10][12] - There is a clear strategy to enhance the DTC channel, which accounted for 82% of revenues in the first nine months [8] - The company is cautiously optimistic about future growth, emphasizing the importance of maintaining focus on key priorities for each brand [20] Management's Comments on Operating Environment and Future Outlook - Management noted that currency fluctuations continue to pose challenges, with expected impacts of 3-4 points in Q3 and 4-5 points in Q4 [19][20] - The consumer demand environment remains volatile, particularly in China, which is expected to stabilize into a new normal [19][20] - Management expressed confidence in the execution of strategic projects and the potential for balanced growth rates in the coming years [20] Other Important Information - The company highlighted the success of recent fashion shows and events, which have positively impacted brand recognition and customer engagement [16][17] - A multi-year partnership with Art Basel was announced, aiming to celebrate art that resonates with the brand's values [14][18] Q&A Session Summary Question: Current trading and expectations for Q4 - Management indicated that current trading trends are in line with Q3, with no substantial changes observed so far [24][25] Question: Performance in mainland China - Management noted that high-end spending is performing well, but there is still volatility in traffic and more affordable spending [25][26] Question: FX impact on margins - Management confirmed that while FX impacts exist, they have hedged well for the current year and into next year [28][29] Question: Consumer environment across regions - Management reported solid growth in the U.S. and Europe, with a slight improvement in Greater China [35][36] Question: Wholesale sector trends - Management stated that rationalization efforts are ongoing, with expectations for a continued decline in wholesale performance [37][38] Question: Performance of Tom Ford Fashion - Management highlighted positive reception of the new collection and ongoing efforts to enhance brand presence [40][41] Question: Price/mix and customer recruitment for Zegna - Management confirmed that price/mix is a major driver of growth, with good traction in recruiting new clients [79][80] Question: Acceleration for Tom Ford into next year - Management expressed optimism for further acceleration, citing the positive impact of new collections and CRM initiatives [81][82] Question: Market debate on fashion trends - Management emphasized the importance of innovation aligned with brand DNA, noting that clients seek meaningful products [87][88]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported revenues of €398 million, representing a 4% organic growth, with a sequential acceleration in the DTC channel, which grew by 9% in the quarter [6][12] - Year-to-date revenues for the first nine months reached €1.3 billion [6] Performance by Business Line - The Zegna brand recorded revenues of €249 million in Q3, reflecting a 6% growth driven by strong DTC performance, particularly in EMEA and the Americas [7] - Tom Brown's revenues were €48 million in Q3, showing slight negative growth but sequential improvement [7] - Tom Ford Fashion reported revenues of €66 million, up 4% organically, supported by the successful reception of the Fall/Winter 2025 collection [7] - The wholesale performance for Zegna was down 3% in Q3 and 11% year-to-date, with expectations of a mid-teens decline by year-end [15] Performance by Geographic Area - EMEA accounted for 36% of total revenue in the first nine months, with a 3% growth in Q3 driven by DTC performance [8] - The Americas, contributing 29% of nine-month revenue, recorded a 13% growth in Q3, with strong DTC performance [9] - Greater China accounted for 23% of total revenues, with a 7% decline in Q3, although showing signs of sequential improvement [10] - The rest of APAC represented 12% of nine-month revenues, with a 3% growth in Q3 [11] Company Strategy and Industry Competition - The company is focused on increasing control over the distribution of iconic products and converting wholesale points of sale into retail concessions [15] - The management emphasized the importance of maintaining a disciplined approach to projects in the pipeline to navigate the current environment [26] Management's Comments on Operating Environment and Future Outlook - Management noted that currency fluctuations continue to present challenges, with an expected impact of 4-5% from organic to reported figures in Q4 [26] - The consumer demand environment remains volatile, particularly in China, but the company anticipates settling into a new normal leading to balanced growth rates in the coming years [26] Other Important Information - The company celebrated the reopening of a fully renovated store in Dubai Mall, which now includes an exclusive private space [25] - A multiyear partnership with Art Basel was signed to celebrate art that resonates with the company's customers [20] Q&A Session Summary Question: Current trading expectations for Q4 and performance in China - Management indicated that current trading trends in Q4 are not substantially different from Q3, with a cautious outlook on consumer traffic in China, particularly for more affordable products [32][34] Question: Consumer environment across regions - The Americas and Europe showed solid growth, while Greater China experienced a mid-single-digit decline, with improvements noted in second-tier cities [49] Question: Wholesale sector trends - The rationalization of the wholesale channel is nearing completion, with expectations of continued selective conversions into next year [51] Question: Performance of Tom Ford - The brand has seen positive reception for its new collections, with plans for further expansion in the U.S. market [56][110] Question: Impact of new collections on performance - The initial "wow" effect from new collections is acknowledged, but the overall performance is attributed to a combination of factors including improved CRM and merchandising strategies [121]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported revenues of €398 million, representing a 4% organic growth, with nine months' revenues totaling €1.3 billion [4][5] - Direct-to-Consumer (DTC) channel revenues increased by 9% in the quarter, accounting for 82% of total revenues in the first nine months [8][9] Performance by Business Line - Zegna brand revenues reached €249 million in Q3, growing by 6%, driven by strong DTC performance in EMEA and the Americas [4][5] - Thom Browne reported revenues of €48 million in Q3, showing slight negative growth but sequential improvement [4] - Tom Ford Fashion achieved €66 million in revenues, up 4% organically, supported by the successful reception of the full-winter 2025 collection [5][12] - Textile revenues remained flat, while other revenues related to finished products grew by 12% [5] Geographic Performance Changes - EMEA accounted for 36% of total revenue in the first nine months, with a 3% growth in Q3, primarily from DTC channels [6] - The Americas, contributing 29% of nine months' revenue, recorded a 13% growth in Q3, led by strong DTC performance [6][7] - Greater China, which represented 23% of total revenues, saw a 7% decline in Q3, although there were signs of sequential improvement [7][9] - The rest of APAC accounted for 12% of nine months' revenues, with a 3% growth in Q3 [7] Company Strategy and Industry Competition - The company is focusing on increasing control over the distribution of iconic products and converting wholesale points of sale into retail concessions [10] - The management emphasized the importance of maintaining a disciplined approach to executing key priorities for each brand [20] - The company is cautiously optimistic about navigating the current volatile consumer environment, particularly in China [19][20] Management's Comments on Operating Environment and Future Outlook - Management noted that currency fluctuations continue to pose challenges, with expected impacts on margins in the upcoming quarters [19][28] - The consumer demand remains volatile, especially in China, but the company anticipates settling into a new normal with balanced growth rates in the coming years [19][20] - The management expressed confidence in the ongoing projects and the potential for growth despite the challenges [20] Other Important Information - The company highlighted the success of recent fashion shows and the positive reception of new collections, which are expected to contribute to future growth [15][18] - A multi-year partnership with Art Basel was announced, aiming to enhance brand visibility and customer engagement [13] Q&A Session Summary Question: Current trading and expectations for Q4 - Management indicated that current trading trends are in line with Q3, with no substantial changes observed so far [24][25] Question: Performance in mainland China - Management noted that high-end products are performing well, but there is still volatility in traffic and more affordable spending [25][26] Question: FX impact on margins - Management confirmed that while FX impacts exist, they have hedged effectively, mitigating some of the margin pressures [28][29] Question: Consumer environment across regions - Management reported solid growth in the U.S. and Europe, with slight improvements in Greater China, but emphasized the importance of strong product acceptance [36][37] Question: Wholesale sector trends - Management stated that rationalization efforts are ongoing, with expectations for continued selective conversions in the wholesale channel [38][39] Question: Performance of Tom Ford - Management highlighted positive reception of the new collection and ongoing efforts to enhance CRM and store performance [40][41] Question: Impact of new fashion designers - Management discussed the importance of innovation aligned with brand DNA, emphasizing that clients seek meaningful and resonant products [90][91]

Financial Performance Overview - For 9 months of 2025, the Group's revenues reached €1,326 million, a decrease of 2% year-on-year, with flat organic growth[15, 20] - In Q3 2025, consolidated revenues were €398 million, flat year-on-year, but with a 4% increase in organic growth[16, 20] Brand Performance in Q3 2025 - ZEGNA brand revenues grew organically by 6%, reaching €249 million, driven by strong DTC channel performance[16, 20] - Thom Browne revenues decreased organically by 5% to €48 million, showing improvement compared to the first half of the year due to DTC acceleration[16, 20] - TOM FORD FASHION revenues increased organically by 4% to €66 million, supported by double-digit growth in the DTC channel[16, 20] Revenue by Geographic Area in Q3 2025 - EMEA revenues grew organically by 3%[23, 25] - Americas revenues increased organically by 13%[23, 25] - Greater China Region revenues decreased organically by 7%, showing sequential improvement[23, 25] Revenue by Distribution Channel in Q3 2025 - DTC revenues reached €297 million, with a 9% organic growth rate[27, 29] - Wholesale branded revenues decreased organically by 15%[27, 29] Retail Store Network - As of September 30, 2025, the total number of DTC stores was 472, compared to 461 at December 31, 2024, and 453 at September 30, 2024[43] - The total number of Wholesale stores was 198 at September 30, 2025, compared to 203 at December 31, 2024, and 211 at September 30, 2024[43]

Core Insights - Ermenegildo Zegna Group reported revenues of €1.33 billion for the first nine months of 2025, reflecting a decrease of 2.3% year-over-year from €1.36 billion in the same period of 2024, with a slight organic decline of 0.4% [2][4] - The third quarter of 2025 saw revenues of €398.2 million, a marginal increase of 0.2% year-over-year and a 3.6% organic growth [2][7] Revenue Performance - The ZEGNA brand generated €819.8 million in the first nine months of 2025, up 1.1% year-over-year, with Q3 growth of 2.0% [8][34] - Thom Browne's revenues fell to €177.4 million, down 19.4% year-over-year, with Q3 revenues of €48.2 million, a decrease of 9.6% [9][34] - TOM FORD FASHION reported revenues of €218.7 million, an increase of 2.2% year-over-year, with Q3 revenues of €66.0 million, up 0.9% [10][34] - Textile revenues decreased to €96.9 million, down 4.6% year-over-year, while other revenues increased by 16.3% to €13.1 million [11][34] Direct-to-Consumer (DTC) Channel - DTC revenues for the group reached €994.7 million in the first nine months of 2025, a growth of 4.3% year-over-year, with Q3 showing a 4.5% increase [13][14] - The ZEGNA brand's DTC revenues grew by 3.6% year-over-year, while Thom Browne and TOM FORD FASHION saw DTC growth of 2.9% and 9.4%, respectively [14][16] Wholesale Channel - Wholesale branded revenues decreased significantly to €221.2 million in the first nine months of 2025, down 24.0% year-over-year, with Q3 revenues of €67.0 million, a decline of 15.5% [19][20] - The decline in wholesale revenues is attributed to a strategic shift towards enhancing the quality of distribution and focusing on the DTC channel [7][19] Geographic Performance - Revenues in the Americas increased by 7.2% year-over-year to €384.1 million, while EMEA revenues decreased by 1.2% to €480.0 million [22][23] - The Greater China Region experienced a significant decline of 14.9% year-over-year, with revenues of €300.5 million [24] Significant Events - The company announced a partnership with Temasek, which acquired a 10% stake in the company through the purchase of treasury shares [27] - Sam Lobban was appointed as the new CEO of Thom Browne, effective September 2, 2025 [28]