ZGN Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Gross Profit: EUR 668 million, margin of 67.6%. DTC revenues accounted for 86% of branded revenues, up from 82% year-over-year.

SG&A Expenses: EUR 531 million, 53.8% of revenues, slightly down due to improved operating leverage and lower impairment costs.

Adjusted EBIT: EUR 74 million, up from EUR 69 million year-over-year, with a margin of 7.5%.

Zegna Segment: Adjusted EBIT of EUR 107 million (14.8% margin), improved from 14.3%.

Thom Browne Segment: Adjusted EBIT loss of EUR 8 million, down from a profit of EUR 4 million.

TOM FORD Fashion: Adjusted EBIT loss of EUR 12 million, improved from EUR 19 million loss last year.

Net Profit: EUR 28 million, down from EUR 48 million, impacted by the absence of a prior year remeasurement gain.

Free Cash Flow: EUR 19.9 million generated, compared to a EUR 23 million outflow last year.

Net Cash: Increased to EUR 60 million from EUR 52 million at the end of December 2025.

2Strategic Updates and Business Highlights

Continued focus on direct-to-consumer (DTC) growth, with solid performance across all regions.

Launch of new marketing campaigns for Zegna and TOM FORD aimed at enhancing brand visibility and consumer engagement.

Ongoing transformation of Thom Browne from a wholesale-driven model to a retail-first approach, with leadership changes underway.

Investment in a new shoe production facility in Parma, expected to enhance operational capabilities.

3Forward Guidance and Outlook

Zegna Segment: Expected EBIT margin around 15% for the full year, driven by high-quality growth.

Thom Browne: Anticipated return to breakeven EBIT in H2 2026, with reduced currency headwinds and improved cost control.

TOM FORD: Expected to achieve a more favorable P&L in the second half of 2026, with a few million negative EBIT for the full year.

Tax Rate: Expected to normalize around 28%-30% for the full year.

4Bad News, Challenges, or Points of Concern

Thom Browne Performance: Continued losses and slower transition to a retail-focused model, with adverse foreign exchange impacts more pronounced than the group average.

Wholesale Channel: Expected to contract further, with negative trends anticipated for Thom Browne and stable performance for TOM FORD.

Market Volatility: Mixed signals from the Chinese market, with potential risks from new taxes on offshore investments affecting consumer sentiment.

5Notable Q&A Insights

Zegna Segment: Expected to maintain strong performance despite tougher comparisons in H2 2026.

Thom Browne Transition: Leadership changes and a shift in strategy are taking longer than anticipated, but confidence remains in the brand's potential.

Tourist Demand: Slight improvement noted in August after a dip in July, with Zegna performing well among tourists.

Future Store Openings: Limited new openings planned for Zegna in the second half, focusing instead on optimizing existing locations. This summary encapsulates the key financial metrics, strategic initiatives, and outlook for ZGN, while also addressing challenges and insights from the Q&A session.