Financial Data and Key Metrics Changes - In H1 2025, revenues reached €928 million, a decrease of 2% organically, despite a strong DTC organic performance of 6% [3][4] - Gross profit was €626 million, with a margin of 67.5%, reflecting a 110 basis points improvement driven by a better channel mix [4][10] - Adjusted EBITDA for H1 2025 was €69 million, with an EBITDA margin of 7.4%, down 100 basis points compared to the previous year [6][8] - Net profit increased to €48 million, up 53% from €31 million in the previous year, attributed to higher financial income and foreign exchange gains [10][11] - Capital expenditure (CapEx) was €54 million, representing about 6% of revenues, primarily for store network development [12] Business Line Data and Key Metrics Changes - The Zegna segment generated an adjusted EBITDA of €94 million, with a margin of 14.3%, up from 12.8% in H1 2024, due to higher operating leverage [9] - Thom Browne's adjusted EBITDA fell to €4 million from €20 million in H1 2024, driven by a significant decrease in revenues, particularly in the wholesale channel [9] - Tom Ford Fashion recorded an adjusted EBITDA loss of €90 million, compared to a €12 million loss last year, due to planned investments in store expansion and IT infrastructure [10] Market Data and Key Metrics Changes - Strong momentum was noted in Europe, the Middle East, and the Americas, while the Greater China Region (GCR) remains challenging and volatile [17][59] - Initial signs of improvement in GCR were observed, but the market is still considered volatile, with a cautious outlook [17][59] Company Strategy and Development Direction - The company is focusing on expanding its DTC network, with new store openings in key markets like Miami and Shanghai [15] - A strategic emphasis on quality and personalization in the DTC channel is expected to enhance gross margins [23] - The company plans to maintain investments in brand development while managing discretionary costs [42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging and volatile sector environment but expressed confidence in actions taken to protect profitability [8][17] - The outlook for H2 2025 includes expectations for low single-digit organic growth, with a cautious approach to the Chinese market [24][59] Other Important Information - Free cash flow absorption was €23 million in H1 2025, compared to €7 million in the previous year, driven by lower operating cash flow [13] - The company confirmed a tax rate of around 30% for the year, down from 35% last year [11] Q&A Session Summary Question: Current performance in terms of margin and expectations for H2 - Management explained that the gross margin improvement is linked to DTC revenues and emphasized the importance of quality in driving margins [20][23] - For H2, management confirmed expectations of low single-digit growth and realistic EBIT consensus [21][25] Question: Margin improvement in the Zegna segment and Thom Browne's margins - Management indicated that Zegna's margins could trend between 13% and 14% for the year, with long-term potential for 15% [30][32] - For Thom Browne, management expects a reduction in the decline of wholesale revenues and aims for a return to double-digit EBIT margins [34] Question: Current trends in the Chinese market - Management noted early signs of improvement in the Chinese market but remained cautious about drawing conclusions from short-term trends [38][59] Question: Pricing strategy and risks for H2 - Management confirmed a systematic low single-digit price increase to offset costs and tariffs, with no significant consumer pushback observed [51][53] - The main risk for H2 is still the volatility in the Chinese market, with a focus on planning for a "new normal" [56][59]

Financial Performance - Consolidated revenues reached €928 million, a decrease compared to €960 million in H1 2024, with a -2% organic growth[8] - Gross profit was €626 million with a 675% margin, compared to €637 million and 664% margin in H1 2024[7, 10] - Adjusted EBIT was €69 million with a 74% margin, down from €81 million and 84% margin in H1 2024[7, 17] - Profit reached €479 million, a +53% increase compared to H1 2024, with the profit margin rising to 52% from 33%[7, 19] Segment Performance - ZEGNA segment revenues were €660 million, with an Adjusted EBIT of €94 million and a margin of 143%, up from €85 million and 128% in H1 2024[15] - THOM BROWNE segment revenues were €129 million, with an Adjusted EBIT of €4 million and a margin of 35%, significantly lower than the 121% margin in H1 2024[15] - TOM FORD FASHION segment revenues were €153 million, with a negative Adjusted EBIT of €19 million, compared to negative €12 million in H1 2024[15] Channel and Geographic Performance - Direct-to-Consumer (DTC) channel accounted for 82% of total branded products revenues in H1 2025, up from 76% in H1 2024[11] - Total Direct to Consumer revenues reached €698035 thousand, a 42% increase compared to €669599 thousand in H1 2024[46] - Greater China Region revenues decreased by 162% to €223101 thousand, compared to €266324 thousand in H1 2024[48] Capital and Cash Flow - Capital expenditure (Capex) in H1 2025 was €54 million, compared to €60 million in H1 2024[24] - Trade working capital was €442 million as of June 30, 2025, down from €476 million as of June 30, 2024[24] - Free Cash Flow was negative €23109 thousand[76]

Ermenegildo Zegna N.V. Semi-Annual Report At June 30, 2025 and for the six months ended June 30, 2025 and 2024 TABLE OF CONTENTS | | Page | | --- | --- | | BOARD OF DIRECTORS | 2 | | CERTAIN DEFINED TERMS | 2 | | INTRODUCTION | 2 | | CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | 3 | | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 5 | | Overview | 5 | | Results of Operations | 7 | | Results by Segment | 16 | | Liquidity and Capital Resources | 21 | | Off-Bal ...

Group 1 - Ermenegildo Zegna (NYSE: ZGN) released its H1 sales results, indicating a resumption of commentary on the numbers [1] - Temasek's recent investment in Zegna is highlighted as a significant partnership that warrants attention [1] - Zegna is recognized as a prominent player in the luxury fashion industry, known for its high-quality products [1]

Financial Data and Key Metrics Changes - For H1 2025, the group revenues reached €928 million, down 3% year-on-year and 2% in organic terms, with a solid performance in the DTC channel showing 6% organic growth [20][21] - Q2 2025 revenues were €469 million, down 3% organically, with positive performance in the Zegna and Tom Ford segments, while Thom Browne experienced negative performance [21][22] Business Line Data and Key Metrics Changes - Zegna brand showed solid performance in Q2 with 2% organic growth, driven by the DTC channel, particularly in the Americas and EMEA regions [21][26] - Thom Browne reported a 24% decline in organic growth in Q2 due to the decision to streamline the wholesale channel [22] - Tom Ford Fashion achieved 4% organic growth in Q2, driven by the DTC channel [22][31] Market Data and Key Metrics Changes - The Americas region showed a 10% organic growth in Q2, driven by the DTC channel, with new store openings contributing to this growth [23][26] - Greater China reported a 17% decline in Q2, primarily due to the wholesale channel, while DTC performance remained stable [24][40] - EMEA recorded a 2% organic decline, reflecting negative trends in the wholesale channel, although DTC performance was positive [23] Company Strategy and Development Direction - The company aims to enhance its DTC channel, focusing on a client-first culture and evolving store concepts to provide immersive experiences [8][10] - The partnership with Temasek is expected to strengthen the company's profile and support the development of its brand portfolio [5][6] - The company is committed to innovation, quality, and a timeless proposition while maintaining a vigilant approach to costs and inventory [18] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment in Greater China but expressed confidence in long-term strategies to adapt to the new normal [39][42] - The U.S. market remains resilient, with strong customer loyalty and conversion rates, particularly in key locations [54][56] - Management expects the trends observed in the first half of the year to continue into the second half, with specific regions like the Gulf and Americas performing well [82] Other Important Information - The company has opened new retail spaces, including exclusive lounges, to enhance customer engagement and provide personalized shopping experiences [12][26] - The company is focused on maintaining exclusivity in its product offerings by limiting distribution in the wholesale channel [29] Q&A Session Summary Question: Insights on Greater China revenue decline and Tom Browne's management priorities - Management noted that Greater China remains challenging, with traffic not meeting expectations, and emphasized the need for a more personalized service approach [38][40] - Regarding Tom Browne, the new CEO is expected to focus on enhancing brand awareness and customer experience [44] Question: Current consumer environment in the U.S. and wholesale trends - Management described the U.S. market as resilient, with strong traffic and conversion rates, and noted that the wholesale channel is expected to see continued streamlining [54][67] Question: Comments on margins and liquidity of shares - Management indicated that the wholesale business is profitable, but the current streamlining may impact margins in the short term [75][78] - There are no immediate plans for dual listing, and management remains confident in the liquidity of shares despite a slight decrease in free float [86][88]

Financial Data and Key Metrics Changes - For H1 2025, group revenues reached €928 million, down 3% year-on-year and 2% in organic terms, with a solid performance in the DTC channel showing 6% organic growth [19][21][32] - Q2 2025 revenues were €469 million, down 3% organically, with positive performance in the Zegna and Tom Ford segments, while Thom Browne experienced negative performance [21][32] Business Line Data and Key Metrics Changes - Zegna brand showed solid performance in Q2 with 2% organic growth, driven by the DTC channel, particularly in the Americas and EMEA [21][26] - Thom Browne reported a 24% decline in organic growth in Q2, reflecting a strategic decision to streamline the wholesale channel [22][32] - Tom Ford Fashion achieved 4% organic growth in Q2, driven by the DTC channel [22][32] Market Data and Key Metrics Changes - The Americas region showed a strong 10% organic growth in Q2, driven by the DTC channel, particularly at the Zegna brand [23][32] - Greater China reported a 17% decline in Q2, primarily due to the wholesale channel's performance, while DTC trends remained stable [24][32] - EMEA recorded a 2% organic decline, reflecting negative trends in the wholesale channel, although DTC performance was positive [23][32] Company Strategy and Development Direction - The company aims to enhance its DTC channel, focusing on a client-first culture and evolving store concepts to prioritize customer experience [8][9] - A partnership with Temasek is expected to support the development of the brand portfolio in an organic and sustainable manner [5][6] - The company is committed to innovation, quality, and a timeless proposition while maintaining a vigilant approach to costs and inventory [18][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging environment in Greater China but expressed confidence in long-term strategies to adapt to the new normal [40][42] - The U.S. market remains resilient, with strong customer loyalty and conversion rates, despite concerns over tariffs [56][62] - The company anticipates continued growth in the Americas and EMEA, while Asia remains volatile [86][90] Other Important Information - The company has opened new retail spaces, including exclusive lounges, to enhance personalized shopping experiences [12][13] - The introduction of new management at Thom Browne is expected to drive brand awareness and customer engagement [15][44] Q&A Session Summary Question: Insights on Greater China revenue decline and traffic - Management noted that Greater China remains challenging, with traffic not meeting expectations, and emphasized the need for a new approach to store operations [38][40] Question: Comments on U.S. consumer environment and traffic - Management described the U.S. market as resilient, with strong traffic and customer loyalty, and noted successful store openings [56][62] Question: Wholesale trends for the second half - Management expects mid-teens negative performance for Zegna wholesale and low double-digit negative for Tom Ford wholesale for the full year [70][72] Question: Acceleration in Tom Ford's performance - The acceleration in Tom Ford's performance was attributed to new store openings and space expansion [73][75] Question: Comments on margins and liquidity - Management indicated that the wholesale business is profitable, but the current streamlining may impact margins in the short term [78][81] - There are no immediate plans for dual listing, and liquidity concerns are not seen as a major issue [90][92]

H1 2025 Financial Performance - Group revenues reached €928 million, a decrease of 3% year-on-year (YoY) and 2% on an organic basis[27] - Q2 revenues amounted to €469 million, reflecting a 6% YoY decrease and a 3% organic decline[27] - ZEGNA brand revenues, constituting 61% of H1 Group revenues, increased by 2% organically, driven by the DTC channel[33] - Thom Browne brand revenues, accounting for 14% of H1 Group revenues, experienced a 24% organic decrease due to wholesale channel streamlining[33] - TOM FORD FASHION brand revenues, representing 16% of H1 Group revenues, grew by 4% organically, propelled by the DTC channel[33] Segment Performance - Zegna segment showed positive performance, boosted by the ZEGNA brand, while the textile division contracted[28] - Thom Browne segment's revenue was impacted by the strategic decision to streamline the wholesale business[28] - Tom Ford Fashion (TFF) segment's revenues were driven by strong double-digit organic growth in the DTC channel[28] Channel Performance - DTC revenues reached €353 million, showing an 8% organic increase, with growth accelerating across all three brands, particularly ZEGNA[42] - Wholesale branded revenues decreased by 33% organically, reflecting a strategic focus on the DTC channel for each brand, especially Thom Browne[42] Geographic Performance - EMEA revenues declined by 2% organically, influenced by wholesale performance in the region[38] - Americas revenues demonstrated strong organic growth of 10%, driven by solid DTC channel results, particularly for ZEGNA and Thom Browne[38] - Greater China Region (GRC) revenues decreased by 17% organically, due to the wholesale channel[38]

Investment & Stake - Temasek is building a 10% stake in Italian fashion house Zegna [1] Financial Details - The stake is worth approximately $220 million [1]

Core Viewpoint - Ermenegildo Zegna N.V. (ZGN) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook driven by rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly due to institutional investors' reliance on these estimates for valuation [4][6]. - For the fiscal year ending December 2025, Ermenegildo Zegna is expected to earn $0.41 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 1.7% over the past three months [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The upgrade to Zacks Rank 2 places Ermenegildo Zegna in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - The acceptance of traditional advertising is declining, while the demand for "good content" is increasing, leading to the rise of scenario-based marketing [2][4]. Group 1: Understanding Scenario-Based Marketing - Scenario-based marketing involves analyzing the specific context of consumers to provide them with relevant information or products, ultimately driving transactions [2][4]. - It requires creating a specific "atmosphere" that attracts consumers to experience and purchase products [2][4]. - Key components of scenarios include "time," "place," and "event," reflecting the personalized demands of consumers [2][4]. Group 2: Misconceptions in Scenario Marketing - Misconception 1: Building a scenario is more important than understanding the user. The essence lies in understanding the "scenario profile" of consumers [5][6]. - Misconception 2: Quality of the scenario is prioritized over effectiveness. Scenario marketing should focus on continuous, interactive engagement rather than one-time displays [8][9]. - Misconception 3: Providing emotional value is sufficient for good advertising. Effective scenario marketing requires a deep understanding of consumers' emotional needs and long-term engagement [11][13]. Group 3: Key Steps in Establishing Scenario Marketing - Step 1: Observe life to identify existing specific scenarios linked to products, rather than creating scenarios in isolation [18][19]. - Step 2: Engage the senses and provide multi-scenario services to meet individual emotional needs, enhancing consumer experience [20][22]. - Step 3: Create a value perception that is slightly elevated from ordinary life, ensuring that marketing does not disrupt consumers' established routines [23][26]. Group 4: Case Studies and Examples - The Hong Kong Tourism Board's collaboration with Whale Energy demonstrated effective scenario marketing by repeatedly appearing in various consumer life scenarios, leading to increased tourist visits [11][9]. - ZEGNA's targeted marketing efforts focused on high-value customers, utilizing data to create precise consumer interactions and achieve significant engagement [19][26]. - The success of Yili's "Baby's First MV" campaign showcased how emotional engagement through personalized content can resonate deeply with consumers [20][22].