Ermenegildo Zegna NV Q4 FY2025 earnings call

• Appreciation for Middle East colleagues and support for the region, expecting it to remain important long-term. - Highlights of Tom Ford fashion show, Tom Browne sneaker collaboration with ASICS, Zegna's For Winter 26th show and Memory fragrance collection, and Genia's spring and summer 2017 fashion show in Los Angeles. - Emphasis on fashion shows needing strong production, commercial, and marketing execution to translate into results. - Investments in talent, systems, organization, store network expansions for Thom Browne and Tom Ford, and focus on marketing with around 6% incidence on revenues.

Full year 2025 revenues were 1,917,000,000, down 1.5% year-over-year on a reported basis and up 1.1% organically. Gross margin was 67.5%. Adjusted EBITDA was 163 million, with 10 million of provisions related to losses on trade receivables for Sachs Global Chapter 11 Procedure. Without this provision, adjusted EBIT would have been 173 million. Zegna segment had adjusted EBIT of 197 million euro and margin of 14.4% (14.7% without SACS provisions). Thom Browne's segment had adjusted EBIT of 1 million with 2 million euro provisions in relation to SACS. Tom Ford fashion segment had a loss at adjusted EBIT level for 16 million in H1, but positive in H2, with 5 million of provisions in relation to Sachs Global.

• 2026 is an important year for CAPEX with investments related to new shoe factory in Parma. - Expect CAPEX in 2026 to be closer to 7% mark. - Continue to assume a flattish performance for China for the year but satisfied with Chinese New Year performance. - FX had some inflection point favoring, but still expect couple of points headwind from currencies on profitability. - Board proposed dividend distribution of 12 cents of euro per ordinary shares.

• Uncertainties due to Middle East situation impacting 2026 results. - Risks and uncertainties described in SEC filings related to forward-looking statements.

Q: Top line momentum and regional trends, A: Year started well with DTC trend slightly better than Q4-25, Tom Ford fashion and Tom Browne doing well, China seeing sequential improvement but cautious, Americas and Europe resilient.

Q: Zegna segment EBIT performance, A: Zegna segment EBIT margin excluding SACS provisions was close to 15%, working on long-term trajectory.

Q: Consumer behavior changes and Middle East relationships, A: No major negative after war except Middle East with less traffic, but brand well placed, working with local partners, personalization helps high spend customers.

Q: Middle East shipments, rents, Tom Ford profitability, A: Product shipped before end of February, rents more variable than fixed, Tom Ford H2 profitability from gross margin and OPEX inflection.

Q: Brand top line growth, wholesale, gross margin, FX, A: DTC growth balanced, wholesale contraction expected, channel mix and full price sell-through drivers of gross margin, FX impact on top line.

Q: Tom Brown and Tom Ford profitability, consumer confidence, A: Both brands growing on DTC, Tom Brown expected to return to reasonable profitability, Tom Ford expected better in 2026, US consumer confidence good, China recovery gradual.

Q: SG&A, Middle East retail vs wholesale, A: SG&A leverage needed for profitability, Zegna in Middle East mostly retail, Tom Ford mostly wholesale.

Q: Middle East country split, spending, store plans, EBIT margin, A: UAE majority, spending mix not detailed, one store opening planned in 2026, EBIT margin sidelined.

Q: Chinese demand, sales density, Japan/South Korea demand, A: Chinese demand balanced between new and existing customers, sales density details in Q1 results, Japan and South Korea growing well.

Q: Europe tourist trends, marketing spend, A: Europe trends good, marketing spend with around 6% incidence on revenues, moving to culture and art initiatives