Investment Rating - The report maintains an investment rating of "A" for the textile and apparel industry [1] Core Insights - The textile and apparel industry has shown a weak recovery, with a focus on consumer performance at the retail end, innovation in major home textile products, and the IP economy [10] - The report highlights significant sales growth in certain brands and sectors, indicating potential investment opportunities [10] Summary by Sections Recent Observations - Under Armour reported a 5% year-over-year revenue decline in FY2026Q3, with revenues of $1.3 billion and a net loss of $431 million [19] - North American revenue fell by 10% to $757 million, while international revenue grew by 3% to $577 million, with EMEA up 6% and Latin America up 20% [4][19] Market Performance - The SW textile and apparel sector rose by 1.32%, outperforming the Shanghai Composite Index by 2.66 percentage points [21] - The SW textile manufacturing sub-sector increased by 2.18%, while the apparel and home textile sub-sector rose by 2.25% [22] Company Performance - Notable companies in the textile and apparel sector include Cai Bai Co., which saw a 30.39% increase in stock price, and Bangjie Co., which rose by 25% [32] - Conversely, China Gold experienced a significant decline of 22.21% in stock price [32] Industry Data Tracking - In December 2025, China's retail sales reached 4.51 trillion yuan, a year-over-year increase of 0.9% [55] - The textile and apparel retail sector saw a modest growth of 0.6% year-over-year in 2025 [56] Investment Recommendations - The report recommends focusing on brands like Bosideng, which is committed to product innovation and channel quality improvement, and companies like Ge Li Si and Jiangnan Buyi, which have shown stable operational performance [10] - In the home textile sector, attention is drawn to companies like Luolai Life and Mercury Home Textile, which are driving growth through major product innovations [10] Material Prices - As of February 6, 2026, the price index for cotton in China was 16,025 yuan per ton, reflecting a 1.0% decrease [36] - The gold price was reported at 1,093.85 yuan per gram, down 6.02% [36] Export Data - In 2025, China's textile and apparel exports amounted to $1,425.85 billion and $1,511.82 billion, showing a year-over-year growth of 0.5% and a decline of 5.0%, respectively [47] Retail Sector Insights - The report emphasizes the importance of direct-to-consumer (DTC) channels, with brands like Zegna showing positive growth in this area [69]

Core Thesis - The investment case for Ermenegildo Zegna N.V. (ZGN) is based on its accelerating traction in the high-end market, with a focus on improving brand momentum and retail growth [7][8]. Financial Performance - ZGN's group revenues for the year reached €1.92 billion, with Q4 sales of €591 million aligning with expectations [4]. - Organic growth for the Zegna brand accelerated to 7.4% in Q4, up from 5.6% in Q3 and 2.6% in the first half, driven by retail and direct-to-consumer sales, which grew over 10% in the quarter [4]. - Group-wide organic growth was limited to 4.6% due to a slowdown in retail growth for Tom Ford Fashion and a significant decline in wholesale sales, which were down double digits in Q4 [5]. Market Dynamics - The company is repositioning towards the high-end market, where demand remains resilient, particularly in the US and Middle East, while Europe is contributing more consistently [5]. - Greater China remains a weakness with sales down approximately 5%, although trends have improved sequentially [5]. Future Outlook - Management anticipates continued shrinkage in wholesale, especially for Thom Browne and Tom Ford, while retail execution will remain a focus [6]. - Foreign exchange headwinds are expected to limit margin expansion, even if volumes increase [6]. Brand Positioning - The company is delivering better top-line quality quarter after quarter, with profitability expected to improve as brand repositioning and retail growth gain traction [7]. - Previous analyses highlighted ZGN's vertically integrated model, iconic brands, strong margins, and attractive free cash flow yield as key drivers of long-term growth, with the stock price appreciating by approximately 28% since November 2024 [8].

Core Insights - Ermenegildo Zegna reported 2025 revenues of EUR 1.917 billion, reflecting a 1% organic growth compared to the previous year, with fourth-quarter revenue reaching EUR 591 million, up 4.6% organically [1][5] Leadership Transition - Gildo Zegna announced a leadership transition, appointing Gianluca Tagliabue as Group CEO and Edoardo and Angelo Zegna as co-CEOs of the Zegna brand, aiming to strengthen the group and prepare for the next generation of family leadership [2] Revenue Growth and Strategy - The company highlighted steady full-year revenue growth driven by direct-to-consumer (DTC) momentum, with DTC revenue accelerating to 10% in Q4, representing 82% of branded revenues for 2025 [3][5] - Management emphasized a strategic shift towards increasing direct control of distribution while reducing wholesale exposure, with Zegna wholesale down 17% in Q4 [4][6] Regional Performance - EMEA and the Americas showed strong performance, with EMEA revenues rising 7% and the Americas increasing 16% in Q4, offsetting a 10% decline in Greater China [10][11] - Greater China represented 23% of full-year revenues, with a 10% decline in Q4 attributed to wholesale timing and delivery differences [12] Store Network and Expansion Plans - The group ended 2025 with 282 directly operated stores for Zegna, 123 for Thom Browne, and 66 for Tom Ford, with plans for new store openings in various locations including the U.S. and the Middle East [14][15] Financial Outlook - Management indicated that Zegna's growth is primarily driven by price/mix rather than volume, with mid-single-digit price increases planned for Spring and Fall 2026 to counter currency fluctuations [17]

PresentationOperator Hello, everyone, and thank you for standing by. The Ermenegildo ZEGNA Group FY 2025 Preliminary Revenues Call. Please note that today's material and presentation are available under the zegnagroup.com website. Joining us today, the ZEGNA Group leadership team, including Gildo ZEGNA, the Group Executive Chairman; and Gianluca Tagliabue, Group CEO. Before we begin, we need to point out that the team will make certain forward-looking statements during the call. The group actual results ma ...

Ermenegildo Zegna (NYSE:ZGN) Q4 2025 Earnings call February 02, 2026 08:00 AM ET Company ParticipantsGianluca Ambrogio Tagliabue - COOGildo Zegna - Executive ChairmanPaola Durante - Chief of External RelationsConference Call ParticipantsAdrian Duverger - AnalystAnthony Charchafji - AnalystBunmi Kanabar - AnalystChiara Battistini - AnalystChris Huang - AnalystDaria Nasledysheva - AnalystMaria Meita - AnalystNatasha Bonnet - AnalystOliver Chen - AnalystPaola DuranteHello everyone, and thank you for standing b ...

Financial Data and Key Metrics Changes - The Ermenegildo Zegna Group reported total revenues of EUR 1.917 billion for FY 2025, representing a 1% increase compared to the previous year, with Q4 revenues reaching EUR 591 million, up 4.6% organically [13][16] - The Zegna brand achieved revenues of EUR 1.2 billion, with Q4 revenues of EUR 362 million, reflecting a 7% growth driven by the DTC channel [3][15] - Thom Browne reported Q4 revenues of EUR 91 million, a 1.4% organic increase, while Tom Ford Fashion reached EUR 98 million, up 1.5% [14][15] Business Line Data and Key Metrics Changes - The DTC channel for the group grew by 10% in Q4, accounting for 82% of the group's branded revenues for FY 2025 [18][19] - Zegna DTC revenues grew 10% in Q4, representing 88% of the brand's full-year revenues, with strong performance in the Americas and EMEA regions [19] - Thom Browne's DTC revenues increased by 11% in Q4, driven by new store openings, while the wholesale channel reported a decline of 14% [20] - Tom Ford Fashion's DTC growth was 5% in Q4, with a 4% decline in the wholesale channel [21] Market Data and Key Metrics Changes - Europe, the Middle East, and Africa accounted for 36% of total revenues, with a 7% increase in Q4, while the Americas represented 30% of revenues, showing a 16% increase in Q4 [16][17] - The Greater China region accounted for 23% of total revenues, but reported a 10% decline in Q4, attributed to the wholesale channel's performance [17] - The rest of the Asia Pacific region saw a 5% growth in Q4, driven by improvements in Japan and Korea [17] Company Strategy and Development Direction - The company aims to strengthen its DTC channel and reduce reliance on wholesale, with a focus on elevating product offerings and enhancing customer experiences [8][19] - The leadership transition, with Gianluca Tagliabue as Group CEO, is expected to drive integration and accelerate ambitions across brands [12][3] - The company plans to continue expanding its retail presence, with new store openings in key markets, including Paris and the U.S. [83][107] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a "new normal" characterized by uncertainty and volatility, emphasizing the need for agility and coherence in strategy execution [10] - The outlook for 2026 includes expectations of continued growth in the U.S. market, despite potential challenges from the wholesale channel and the situation with Saks Global [75][76] - Management remains optimistic about the resilience of high-spending customers and plans to focus on this segment for future growth [90] Other Important Information - The company is closely monitoring the Chapter 11 bankruptcy situation of Saks Global, which has a limited impact on Zegna Group revenues [23][46] - The company is implementing a pricing strategy with mid-single-digit increases to offset currency fluctuations [89] Q&A Session Summary Question: What is the growth rate of Zegna brand DTC excluding China? - Management confirmed that the growth rate is around high teens percentage year-over-year, excluding China [25][28] Question: What FX impact is expected for 2026? - A headwind of approximately 2-3% is anticipated due to currency fluctuations, with some mitigation through hedging [28] Question: What are the key drivers for Zegna retail productivity? - Key drivers include mix and price, with a focus on elevating product offerings and customer experiences [41] Question: What is the exposure to Saks Global? - The overall exposure to Saks Global is in the low single-digit range of the group's revenues [46] Question: What are the expectations for wholesale performance in 2026? - Wholesale is expected to decline, with high single-digit negative growth anticipated for the group, particularly for Thom Browne [55][56] Question: How is the U.S. market performing? - The U.S. market continues to show strong performance, with good traction across all brands [75][76] Question: What is the strategy for Tom Ford moving forward? - The strategy includes expanding the store base and enhancing marketing efforts to maintain momentum [100]

Financial Data and Key Metrics Changes - The Ermenegildo Zegna Group reported total revenues of EUR 1.9 billion for FY 2025, with the Zegna brand contributing EUR 1.2 billion [3] - Q4 revenues reached EUR 591 million, reflecting a 4.6% organic growth [13] - The Zegna brand specifically saw Q4 revenues of EUR 362 million, up 7% driven by the DTC channel [14] Business Line Data and Key Metrics Changes - The DTC channel for the group reported a 10% growth in Q4, with Zegna DTC revenues growing 10% and accounting for 88% of full year 2025 brand revenues [17][18] - Thom Browne reported Q4 revenues of EUR 91 million, up 1.4% organic, while Tom Ford Fashion reached EUR 98 million, up 1.5% [13][14] - The textile segment grew by 1% [14] Market Data and Key Metrics Changes - Europe, the Middle East, and Africa represented 36% of total revenues for FY 2025, with a 7% increase in Q4 [15] - The Americas accounted for 30% of total revenues, recording a 16% increase in Q4 [15] - Greater China accounted for 23% of total revenues, but reported a 10% decrease in Q4 [16] Company Strategy and Development Direction - The company aims to strengthen its DTC channel and reduce reliance on wholesale, with a focus on elevating brand offerings and customer experiences [4][9] - The strategy includes enhancing the Zegna brand's presence through fashion shows and partnerships, such as the Airbus collaboration [4] - The company is committed to maintaining its heritage while adapting to market changes, emphasizing agility and innovation [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain and volatile market environment, particularly in Greater China, but expressed optimism about the resilience of the U.S. market [10][73] - The leadership team is focused on executing strategies to enhance brand momentum and expand the high-end customer base [7][8] - The company is monitoring the situation with Saks Global, which filed for Chapter 11 bankruptcy, but believes it can absorb the impact due to limited revenue exposure [21][46] Other Important Information - The company is planning to open new stores in key markets, including the U.S. and the Middle East, while rationalizing its retail footprint in China [107] - The management highlighted the importance of personalization and high-end product offerings to attract high-spending customers [88][92] Q&A Session Summary Question: Zegna brand DTC growth and 2026 outlook - Management confirmed that excluding China, Zegna brand DTC growth was around high teens percentage year-over-year, with resilience expected in the U.S. market [24][30] Question: FX impact for 2026 - The company anticipates a 2-3% headwind from currency fluctuations in 2026, partially mitigated by hedging strategies [27] Question: Zegna retail productivity and perfume rollout - Zegna's retail productivity is close to EUR 20,000 per square meter, with expectations for high single-digit improvement driven by product mix and pricing strategies [36][40] Question: Exposure to Saks Global - The group's revenue exposure to Saks is in the low single-digit area, and management is closely monitoring the situation [46] Question: U.S. market performance and customer acquisition - The U.S. market continues to show strong performance, with both new customer acquisition and returning customers contributing to growth [70][74] Question: Wholesale channel expectations for 2026 - The wholesale channel is expected to remain negative in 2026, with a high single-digit decline anticipated for the group [55][58] Question: Pricing environment and high spending cohort - The company plans mid-single-digit price increases to offset currency fluctuations, with a focus on high-spending customers driving growth [87][92]

FY 2025 PRELIMINARY REVENUES Unaudited figures February 2, 202 6 The Group's management monitors and evaluates operating and financial performance using several non-IFRS financial measures including: revenues on a constant currency basis (constant currency) and revenues on an organic growth basis (organic or organic growth). The Group's management believes that these non-IFRS financial measures provide useful and relevant information regarding the Group's financial performance and financial condition, and i ...

Core Insights - Ermenegildo Zegna Group reported FY 2025 revenues of €1,917 million, a decrease of 1.5% YoY, but an increase of 1.1% on an organic basis, with Q4 revenues reaching €591 million, up 0.3% YoY and 4.6% organic [1][2][3] Revenue Analysis - FY 2025 revenues by brand: - ZEGNA brand: €1,181.6 million (+1.5% YoY, +4.7% organic) - Thom Browne: €268.5 million (-14.7% YoY, -12.2% organic) - TOM FORD FASHION: €317.1 million (+0.8% YoY, +3.1% organic) [1][2] - Q4 2025 revenues by brand: - ZEGNA brand: €361.7 million (+2.4% YoY, +7.4% organic) - Thom Browne: €91.1 million (-3.7% YoY, +1.4% organic) - TOM FORD FASHION: €98.3 million (-2.3% YoY, +1.5% organic) [1][2] Distribution Channel Performance - Direct-to-Consumer (DTC) revenues for FY 2025 were €1,449 million (+4.2% YoY, +7.9% organic), with Q4 showing +3.9% YoY and +9.6% organic growth [1][2] - Wholesale branded revenues for FY 2025 were €318.1 million (-20.9% YoY, -20.2% organic), with Q4 at €96.9 million (-12.9% YoY, -11.6% organic) [1][2] Geographic Revenue Breakdown - EMEA revenues for FY 2025: €683.8 million (+0.5% YoY, +1.4% organic), representing 36% of total revenues [1][2] - Americas revenues for FY 2025: €566.1 million (+7.9% YoY, +12.0% organic), representing 30% of total revenues [1][2] - Greater China revenues for FY 2025: €435.2 million (-14.6% YoY, -11.9% organic), representing 23% of total revenues [1][2] Leadership Changes - A new leadership structure was announced, effective January 1, 2026, with Ermenegildo "Gildo" Zegna as Group Executive Chairman and Gianluca Tagliabue as Group CEO, alongside Edoardo and Angelo Zegna as Co-CEOs of the ZEGNA brand [2][3]

Core Viewpoint - Ermenegildo Zegna's stock experienced a significant decline of over 13% following a downgrade from Bank of America Securities, reflecting investor concerns about the company's future prospects [1]. Group 1: Recommendation Changes - Bank of America Securities analyst Daria Nasledysheva downgraded Zegna's recommendation from buy to hold, adjusting the price target from $11.50 to $11.20 per share [2]. - The downgrade indicates a shift in sentiment regarding Zegna's growth potential and market performance [2]. Group 2: Company Strategy and Performance - Nasledysheva views Zegna as a successful turnaround story, noting its transition from formalwear to luxury leisurewear [3]. - Concerns were raised about the potential underperformance of Zegna's Thom Browne and Tom Ford brands, which may hinder overall growth [3]. - The company faces challenges in increasing margins, particularly in light of recent changes in its executive leadership [3]. Group 3: Executive Changes - At the beginning of the year, Zegna implemented several executive changes, with Gildo Zegna stepping down as CEO while remaining chairman, and Gianluca Tagliabue taking over as CEO [4]. - The transition in leadership is still in its early stages, but initial observations suggest it is proceeding smoothly [5]. Group 4: Current Financial Metrics - Zegna's current stock price is $9.56, with a market capitalization of $2.8 billion [5]. - The stock has a gross margin of 55.55% and a dividend yield of 1.28% [5]. - The trading volume for the day was 2.2 million shares, with an average volume of 569,000 shares [5].