Ermenegildo Zegna NV Q2 FY2025 earnings call

• Zegna: Launched Fall/Winter '25 marketing campaign 'It's not a suit, it's a Zegna', opened new store in Miami Design District and a by-appointment-only store in Shanghai Plaza 66.
• Thom Browne: Launched Fall '25 campaign, Sam Lobban started as CEO on September 2.
• Tom Ford Fashion: Released first campaign signed by Haider Ackermann, collection to hit stores end of August.

Zegna segment generated adjusted EBIT of EUR 94 million with a margin of 14.3%, up from 12.8% in H1 2024. Thom Browne segment had adjusted EBIT of EUR 4 million, down from EUR 20 million in H1 2024. Tom Ford Fashion segment recorded an adjusted EBIT loss of EUR 19 million, compared to a EUR 12 million loss last year. DTC revenues contributed 82% of group branded revenues in H1 2025, higher than 76% in H1 2024, which contributed to gross profit margin improvement.

• Full-year organic revenue growth is low single-digit. Adjusted EBIT is expected to be around EUR 173 million, incorporating currency swings. Group expects marketing expenses to remain around 6% of sales.

• Sector remains challenging and volatile. China market recovery is uncertain. Initial signs in China are tentative and need further consolidation.

Q: On gross profit margin bridge and H2 expectation.

A: Gross margin improvement due to DTC revenue mix and quality of DTC. H2 organic revenue growth low single-digit, adjusted EBIT of EUR 173 million is realistic.

Q: On margin improvement in Zegna segment and Thom Browne margins.

A: Zegna has potential to reach 15% margin long term. Thom Browne wholesale rationalization with Sam Lobban's leadership to drive margin improvement.

Q: On China trends and Zegna margin.

A: China trends to be detailed in Q3 call. Zegna margin expected in 13%-14% range for 2025, marketing expenses around 6% of sales.

Q: On pricing and risk.

A: Pricing with low single-digit increases to offset costs. Risk in China market recovery and industry volatility