Prepared remarks
Good morning everyone. Thank you for joining the Ermenegildo ZEGNA Group Q3 2025 revenues call. Please note that today's material and presentation are available on the zegnagroup.com website. Joining us today is the ZEGNA Group senior management team, including Gianluca Tagliabue, Group CFO and COO, and Paola Durante, Chief of External Relations. Before we begin, we need to point out that the team will make certain forward-looking statements during the call. The group's actual results may be materially different from those expressed or implied by these forward-looking statements. Also, these statements are subject to a number of risks and uncertainties, including those described in our SEC filings. Please refer to the forward-looking statements cautionary statement included at Page 2 of today's presentation. I'll now hand over to Paola Durante.
Thank you, operator, and good morning also from myself, and good afternoon to everybody. Welcome to our Group Q3 and 9 months 2025 revenues call. As usual for Q1 and Q3 revenues, today's call is led by Gianluca Tagliabue and myself. Alice Poggioli is with us. Our CEO, Mr. Gildo, will attend the February call on full year 2025 revenue. Let's then move to Page 7 of the presentation where we comment on revenue trends. When commenting revenue trends, we focus on organic performance, which excludes foreign exchange impacts, and therefore better reflects the underlying business dynamics. This approach is particularly relevant this year, given the sharp appreciation of the euro against key currencies such as the U.S. dollar and the Chinese renminbi, among others. I have to say this is even more relevant in this quarter and the next one. In Q3 2025, our Group reported EUR 398 million in revenues, up 4% organic, with a sequential acceleration of the DTC channel, which was up 9% in the quarter, with remarkable results across the three brands.
Nine months revenues were EUR 1.3 billion. Moving to Page 8, I'd like to comment on the performance by brand. In Q3, ZEGNA brand recorded revenues of EUR 249 million with 6% growth. This performance was led by a solid performance in the DTC channel, particularly in EMEA and the Americas. Thom Browne revenues were EUR 48 million in Q3. The brand, although remaining slightly negative in the quarter, showed a sequential improvement in both channels. TOM FORD FASHION reported EUR 66 million in revenues and was up 4% organic, driven by the DTC channel and supported by the good reception of the Fall/Winter '25 show collection. Last, Textile was flat in the quarter, while other revenues, which are today a marginal part of our business and related to the ready-to-wear garments we produce for third-party brands, reported 12% growth. Moving to Page 9 and commenting by geographic area. Starting with EMEA: EMEA represented 36% of group total revenue in the first nine months and is the Group's largest region.
Quarter revenues were up 3%, thanks to a very solid DTC performance, particularly at ZEGNA and TOM FORD FASHION, partially offset by a negative contribution from wholesale. The Americas, contributing 29% of nine months revenue, recorded 13% growth in the quarter driven by solid DTC performance across the three brands, with the U.S. as the largest market leading the performance. LATAM, though a smaller contributor, continues to show robust double-digit growth. Regarding clusters, a question you normally ask: ZEGNA brand U.S. customer cluster continued to grow solid double digits. ZEGNA U.S. customers were growing both domestically and abroad. Moving to Greater China, which accounted for 23% of total revenues in the first nine months: in the quarter, revenues were down 7%, showing sequential improvement across the three brands, with Thom Browne leading trends. Finally, rest of APAC represented 12% of nine months revenues and showed 3% growth, driven by strong performances in Singapore on a smaller base and some improvements mainly in Korea.
On Page 10, I won't go into much detail because we prefer to comment on brand-by-channel performance. Two numbers I want to highlight: first, 9% DTC growth in the quarter; second, DTC accounted for 82% of group revenues in the first nine months. Moving to Page 11 on ZEGNA: in Q3, ZEGNA DTC revenues grew 7% and DTC equals 87% of the brand's nine months revenues. This 7% growth was led by solid double-digit growth in EMEA and the Americas. Greater China revenues remained negative but showed signs of improvement compared to Q2, helped by a slightly easier base of comparison. The performance in the region remains volatile and still difficult to read. Commenting on clusters, the cluster improved sequentially and was negative high single-digit compared to the double-digit decline previously reported. In Q3, ZEGNA closed four stores, mainly in GCR. Briefly on wholesale for ZEGNA: revenues were down 3% in the quarter and 11% in the nine months.
I ask you to look more at the year-to-date performance, which better reflects the underlying business, as quarterly results can be affected by different delivery timing, particularly for ZEGNA and our drop strategy that can cause different deliveries to wholesale customers. For year-end, we confirm the indication for ZEGNA wholesale down in the mid-teens because, as we have commented several times, we are increasing control of distribution of iconic products and have converted some wholesale points of sale into retail concessions. On Page 12, Thom Browne: Thom Browne DTC revenues were up 10% in Q3, showing sequential acceleration driven by the Americas, also because of new openings, and some sequential improvement in GCR and rest of APAC. Thom Browne opened DOS in the quarter, including an important concession at Selfridges Women in London and at Isetan Kyoto. Wholesale, in line with expectation, was down 37% in the quarter and 50% in the first nine months.
Moving to TOM FORD FASHION on Page 13: TOM FORD FASHION reported 16% DTC growth in Q3, driven by the successful reception of the Fall/Winter '25 collection in stores across all regions and by some new store openings. Work done recently in people training and talent in stores is bearing results. We are at the beginning of the journey to strengthen the brand in the fashion business, particularly in the important DTC channel. The path ahead is defined; we need to follow it step by step, and we are doing the first steps. We are encouraged by clients' positive feedback on the collection. TOM FORD FASHION didn't open any store in the quarter, and wholesale was down 19% in the quarter and 10% in the first nine months. We confirm by year-end wholesale performance negative in the region of 10%, noting some timing differences. I finish by showing on Page 14 the nice façade of the ZEGNA store in the Miami Design District.
Miami is a vibrant city, and in December ZEGNA will host an event during Art Basel Miami. Art has always been part of ZEGNA's identity and legacy since our founder. Earlier this year, we signed a multiyear partnership with Art Basel, which offers a global platform to celebrate art that resonates with ZEGNA customers and values. In early December, we will have an event with our customers in Miami. On Page 15 you find our store network. On Page 16 we have published the financial calendar for 2026 in our press release and on our website. Please mark your agenda for next year. With this, I hand over to Gianluca for some final remarks before Q&A.
Thank you, Paola. Before heading to the Q&A session, I would like to share a few final remarks. Let me begin by highlighting the exceptional fashion shows presented by both TOM FORD FASHION and Thom Browne in Paris in October. Both received enthusiastic recognition from the press and from our clients, reflecting continued progress along the path set for these brands. Talking about TOM FORD FASHION in particular: as Paola noted, the first Haider Ackermann collection for Winter '25 arrived in stores at the end of August, was well received, and contributed to our quarterly results. These are early signs; while we are pleased with the positive start, we are aware that the journey to fully unlock TOM FORD FASHION's potential is still ahead and might not be a straight line. We must continue building this momentum. On Thom Browne, let me highlight the recent events to celebrate the Ginza store opening in Tokyo.
The brand hosted curated experiences from a screening of the Thom Browne documentary presented by GQ Japan to a cocktail party, an intimate dinner with celebrities and friends of the brand, and the presence of Thom himself. This reflects the brand's emotional connection with its audience. We'll see more of this unfolding on Thom Browne social media channels in the coming weeks. Finally, turning to ZEGNA: we have touched on the success of Drop 2, which saw an activation on September 1 and launched alongside the campaign 'It’s Not a Suit, It’s a ZEGNA.' With this collection, ZEGNA celebrated its heritage and the ongoing pursuit of excellence and innovation embodied by Vellus Aureum, the finest wool — Vellus Aureum means 'Golden Fleece.' The ZEGNA Torino suit draws directly from our founder's personal wardrobe, recalling when he would drive to his Torinese tailor to craft suits with a unique, defined, unmistakable style.
Rooted in heritage yet forward-looking, the Torino style bridges past and future. This campaign reaffirmed ZEGNA's role in shaping contemporary style, and the collection's results confirm the strength of the brand's vision and robustness of execution. On October 1 we celebrated the reopening of the fully renovated store in Dubai Mall, which now includes Il Salotto, the brand's exclusive by-appointment private space. I invite you to visit when you are in Dubai. A few general closing remarks: currency fluctuations, as Paola anticipated, continue to present a headwind for the sector. In Q3, the FX impact was between 3 and 4 percentage points, and the base of comparison will be even stronger in Q4, where impact from organic to reported could be between 4% and 5%. Consumer demand volatility remains a defining factor, particularly in China, which we expect to remain volatile in the coming months.
China is a cornerstone for the sector and for us, but we see it settling into a new normal that should lead to balanced growth in coming years. Given the environment, it is important to stay focused on the key priorities for each of the three brands and to deliver on them. The direction is clear; projects in our pipeline are being implemented with discipline, giving us a solid base to remain cautiously confident as we navigate the period ahead. With that, I open the Q&A session.
Questions and answers
Please note you may ask a question at this time. Our first question today comes from Anthony Charchafji with BNP Paribas.
The first question is on current trading and any expectation you could share into Q4. My second is on China and namely Mainland China performance at ZEGNA. Could you add a bit of color on what you're seeing in terms of traffic and, more importantly, whether the more affordable part of demand is coming back rather than the high end? My last question is on the FX impact, not on top line but rather on margin. What do you expect for this year or into next year? Do you think it's fair to assume some kind of impact into next year?
Okay. Thank you, Anthony. Thank you for the three questions. I'll leave to Gianluca on current trading and China performance, and then I can add any other comments.
Anthony, Q4 has just started, so it's early to make a final comment after a few weeks. What I can anticipate is that we are not seeing trends substantially different from Q3 so far; performance is in line. A couple of points heading into Q4: first, FX creates a steep delta between reported and organic because we had a USD around 103-104 from November through January last year, which was a strong period for both USD and renminbi. Last year we had a very solid Q4 with high single-digit organic in DTC. Again, the trend so far is not different. On China, by geography and cluster: we are seeing top-of-pyramid guests performing well in China, both on Vellus Aureum and Aureus, on the most sophisticated, high-price-point suits. We are not yet seeing solid, consistent indications of traffic recovery or stronger affordable spending; that remains limited. Geographically, we report some improvement in Hong Kong trends and second-tier cities performing slightly better than Beijing and Shanghai. Examples are Shenzhen, Chengdu, and Guangzhou doing slightly better. The environment is volatile; we remain cautious, which means we are conservative on open-to-buy, CapEx and OpEx for next year, and we continue pruning our store network where meaningful, consolidating into fewer, better stores. This started in 2025 and will continue over the next couple of years.
On FX impact in 2026, we can comment on our FX hedges and exposure.
The FX impact does exist even though we hedge. We have mitigated impact on the bottom line. This year we hedged particularly well both USD and renminbi; this was true for Fall/Winter '25 and is true for Spring '26. Now the topic will be how we handle prices for Fall/Winter '26, which is the second part of the year. The hedging we have done covers through Spring '26 and we are happy with it.
Operator, please proceed with the next question.
Our next question comes from Adrien Duverger with Goldman Sachs.
I have three questions. First, could you provide a bit more information on the consumer environment across regions — you already commented on China, but could you give us more on the U.S. and Europe, especially around traffic, conversion rates and appetite to spend? Second, about the wholesale sector and the trends you're seeing so far into 2026: is the rationalization of the channel almost done, and do you expect it to be finished by the end of this year or could we still expect some impact into next year? Third, on TOM FORD: could you comment on the performance there and on the integration of the brand, providing more color?
Three articulated questions. On the consumer environment cross-region, I'll comment quickly by cluster performance and then leave Gianluca to elaborate. Then on wholesale, Thom Browne and TOM FORD performance I'll leave to Gianluca. For Q3 by region: we saw continued solid double-digit cluster growth in the U.S. and Europe. As I said during the call, GCR cluster improved to a mid-single-digit negative. In the Americas, the U.S. remains very strong, and LATAM performed well, driven by strong work from our teams and good acceptance of our products and collections. Europe excluding Middle East also did very well. I'll hand it to Gianluca for the wholesale and TOM FORD specifics.
Regarding wholesale: most of the effort in selection has already been done, especially for Thom Browne. This year Thom Browne declined around 35% in wholesale, ZEGNA mid-teens, and TOM FORD around minus 10%. The declines result from conversions we have executed, which will continue selectively next year depending on the location — some U.S. wholesalers we are debating location by location. The conversion trend will continue but to a lower extent because many conversions have already been done. We will continue to limit distribution of iconic items where we do not want resale at discounts or distribution in markets we do not want. For TOM FORD, the minus 10% wholesale is likely to continue into next year but at much lower intensity. For Thom Browne, selection of distribution will continue but not at the same level as the last two years — overall, a more muted wholesale decline next year is expected.
On TOM FORD FASHION: the quarter benefited from a number of factors including the Haider collection, openings, and investments in platform, people and CRM. DTC in Q3 was up 16% and is not just space-driven; there is an important comp component due to assortment planning and retail management training. Some wholesale decline was driven by conversions last year such as the conversion of certain department store concessions and other locations into direct-operated stores. Geography-wise, U.S. was solid and EMEA very strong, while GCR showed sequential improvement from a small base.
To add on TOM FORD FASHION: there's a normal 'wow' effect with a new collection, which can create strong initial demand. Also, Q4 last year was denser in performance, so there is a base effect. We are encouraged but remain mindful of comparisons.
Our next question comes from Oliver Chen with TD Cowen.
This is Nicolas Silvia on for Oliver. Two questions: first, could you comment more on how ZEGNA is leveraging the direct-to-consumer network to drive growth? Second, on FX headwinds, could you touch on how you're offsetting those currency pressures, especially in light of recent tariff impacts?
On ZEGNA's DTC network evolution and on how we are offsetting FX and tariff impacts: I'll leave to Gianluca to elaborate.
On retail drivers: starting with outlet, outlet is not a growth driver — we keep shrinking that channel when possible, driven by full-price sell-through. Our internal KPI is sell-through at full price because ZEGNA no longer does bargain sales. With good inventory levels we reduce outlet exposure, which reduces non-growth channels. For full-price boutiques, the DTC growth this year is mostly comp-driven; the 7.4% organic growth was almost entirely comp. The drivers behind comp are conversion and average unit retail (AUR). We are laser-focused on outreach, appointments, and curated selections to increase conversion, mitigating traffic declines in some markets. The ticket value is increasing through AUR as we elevate the offer each season with Vellus Aureum, personalization, new leather pieces and expanded Conte jackets. Space has not been the driver so far, but there are still opportunities in the U.S.: next year ZEGNA will expand in the U.S. with locations in Troy, Michigan; San Diego; Scottsdale; and a remodel in Ballard.
China, conversely, will be a consolidation focus. On FX protection: we fix currency for price lists months in advance and defend price lists. For example, Spring '26 selling was set in June and we are largely covered at a good currency rate, protecting sell-in margins. The remainder of protection comes self-funded via OpEx and revenue offsets. Our mindset on price increases is to stay in a low to mid-single-digit band, and tariffs in the U.S. might add some upward pressure on pricing. These mechanics are how we defend ourselves.
It's worth noting that we implemented some price increases in September because of tariffs, and customer reaction was positive. Any price increase is carefully analyzed by the merchandising team to protect key price points across each collection.
Our next question comes from Chris Huang with UBS.
Three questions. First, on Q4 current trading: given your DTC improvement in Q3 and last year's strong Q4, is it possible we continue to see a high single-digit DTC growth at the group level in Q4? Second, on the Chinese cluster: can you clarify if the decline is mid-single-digit or high single-digit, and which other nationalities might be moderating? Third, on H2 margins: previously you commented ZEGNA segment margins would land between 13% and 14% for full year — any update given the comp-driven DTC growth?
Thank you. For the Q4 question I'll ask Gianluca to comment. On the Chinese cluster and margins, Gianluca will provide detail as well.
Starting with the Chinese cluster: it saw a high single-digit negative decline. We saw a steeper decline for Chinese customers buying abroad, though that is smaller for us. On Q4 expectations by channel or brand, I won't give specific channel-by-channel guidance; so far the trend is similar to Q3. Last year’s strong Q4 makes comp more challenging. If you want an indication, stick rather to geography and consensus out there today, which looks reasonable. Regarding margins: we previously indicated ZEGNA margin around 13%-14% for the full year. The comp-driven growth is within our expectations and aligns with our numbers. It may be a little better but not substantially different. For the market as a whole, we think existing consensus on revenues and EBIT is reasonable.
Our next question comes from Chiara Battistini with J.P. Morgan.
A couple of follow-ups and a curiosity. First on ZEGNA: can you comment on mix — price versus volume — and the evolution between recruitment of new consumers versus returning customers? Second, on TOM FORD: given the initiatives, product ramp, CRM and store rollout, is there any reason not to assume further sequential acceleration in Q4 into year-end and next year from a DTC perspective? Third, a broader question: there's debate about new fashion designers reinvigorating bolder fashion, potentially penalizing understated brands. Could you share your view?
On price mix and volumes, I'll ask Gianluca to comment, and he'll address TOM FORD acceleration. On the fashion debate, I'll offer our perspective as a brand rooted in heritage and innovation.
To clarify Chiara's point: there's renewed enthusiasm around bolder fashion as some designers move; the question is whether that trend penalizes more understated brands.
For ZEGNA, price mix is the biggest driver. Comp is mainly coming from price and mix, including like-for-like price increases and elevation of content in the collection. We are seeing good traction with new clients and retaining new clients; the key is creating stickiness so they move up spend thresholds. We are growing well among clusters above EUR 25,000. On TOM FORD FASHION: the double-digit DTC growth in Q3 is partly comp-driven and gives us comfort. We are injecting lessons learned from ZEGNA into TOM FORD, including CRM logic and assortment cadence to create reasons for clients to return. TOM FORD has opportunities to increase presence in the U.S. next year and is also working on a Paris store. Assortment and women's categories — daywear, shoes, handbags — are areas of opportunity. We are cross-fertilizing merchandising and CRM across brands. Overall, the solid DTC growth is a positive indicator of traction in the business.
On the broader fashion debate: innovation is what clients want, but it must be coherent with the brand DNA. ZEGNA innovates in garments and style while respecting heritage. Innovation should build on prior seasons rather than radically changing everything, providing meaning, quality and storytelling for clients. Clients want newness with context and values behind it.
Our next question comes from Daria Nasledysheva with Bank of America.
Two quick ones. First, can you help quantify the impact of Haider’s new collection on the acceleration this quarter, and how we should think about the pace of product rollout next year as a percentage of revenues for the brand? Second, could you comment on full year EBIT consensus as you normally do? I know you've commented on revenues but what about profitability?
On quantifying Haider's impact: we will provide qualitative context, but it's hard to isolate a single driver. The Haider collection contributed alongside other factors such as improved store staffing, CRM rollout, better merchandizing, and marketing visibility. I'll leave Gianluca to add comments.
It's difficult to isolate the specific driver from the Haider collection because part of the collection impact came later in the quarter (end of August) and some part was from earlier non-show deliveries in June-July. Haider's collection generated curiosity and traffic, but it was part of a broader set of drivers. On consensus: we reiterate that the consensus for full year revenues and EBIT looks pretty reasonable. We remain mindful that the next couple of months are important and outcomes remain subject to near-term performance.
Thanks. Can you comment on the percentage of revenues from new product for TOM FORD throughout next year?
In terms of product rollout cadence for TOM FORD: in November we will have a first injection of spring product on the floors, followed by a second in January. The initial non-show drops are often the more important part of the season's sell-through; the show collection is a smaller, but important, portion.
Remember the first drop is usually the non-show collection; that is important for the season. If there are no further questions, we can move on.
We have one final question from Bhumi Kanabar with Jefferies.
Two questions. First, could you add color on APAC ex-China given the slight sequential decline versus H1? I know you mentioned Korea and Singapore, but any other regions to call out? Second, you said you are happy with EBIT consensus — could you comment on gross margin, given the share of DTC revenues in the nine months suggests potential upside?
Gianluca will cover APAC performance and gross margin consensus.
On APAC ex-China: Singapore is doing well for both ZEGNA and TOM FORD, and a new TOM FORD store is picking up after opening. Japan remains soft, especially among Japanese residents buying in Japan, which is our bulk. Korea showed slight sequential improvement compared to Q2. Macau is not showing momentum, and Hong Kong is improving in traffic and top line. Australia is not a material market for us. On gross margin: consensus around 67% looks directionally meaningful and reasonable to us. If there is an upside at year-end, we'll see it, but for the time being we stick with consensus.
If there are no more questions, thank you for your time. We remain at your disposal for any follow-ups and will reconvene on February 2 for full year 2025 preliminary revenues. Thank you and speak to you soon.
Thank you, everyone, for joining us today. This concludes our call; you may now disconnect your lines.