MILAN — The Ermenegildo Zegna Group on Friday reported a growing bottom line in the first six months of the year.
In the period ended June 30, net profit rose 53 percent to 47.9 million euros compared with 31.3 million euros in the same period last year.
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“Our first-half 2025 results reflect the group’s strategic decision to invest in the DTC store network and capabilities across our three brands, while continuing to support projects that fuel our long-term growth ambitions,” said chairman and chief executive officer Gildo Zegna.
“In this context, we are pleased with the operating results reported by the Zegna segment where stronger operating leverage and disciplined execution led to an improvement of the adjusted EBIT margin by 150 basis points. This strong performance helped balance the impact of the strategic transformation underway at Thom Browne and Tom Ford Fashion.”
Adjusted operating profit for the Zegna segment, which also includes the textile division and third-party brands, totaled 94.4 million euros with an adjusted margin of 14.3 percent, compared to 12.8 percent in the same period last year, driven by positive operating leverage, a more efficient direct-to-consumer channel and discretionary cost control initiatives.
Gildo Zegna touted the strength of the group’s pipeline, “the authenticity of our brands, and — above all — the clarity of our vision and the talent of our team,” leading the executive to say that “we remain on track to achieve our 2027 targets, despite sector and currency headwinds.”
As revealed in July, group revenues totaled 927.7 million euros. This is a 3.4 percent decrease from 960.1 million euros in the same period in 2023 and in organic terms it’s a 2 percent decrease.
In the first six months ended June 30, sales of the Zegna brand inched up 0.8 percent to 570.4 million euros, while Thom Browne sales fell 22.5 percent to 129.2 million euros.
Tom Ford Fashion rose 2.8 percent to 152.7 million euros. Haider Ackermann debuted his first collection as creative director of Tom Ford during Paris Fashion Week on March 5 to unveil the brand’s fall 2025 collection.
During a call with analysts on Friday, chief financial officer and chief operating officer Gianluca Tagliabue said that a new campaign for Tom Ford Fashion, the first under Ackermann, has just been released “and it has been very well-received.” About the collection, available in stores from the end of August, Tagliabue said it was “early to comment on the trends, but the first, very initial reactions in the stores have been really positive.”
Zegna also just launched the fall 2025 campaign fronted by Mads Mikkelsen and labeled “It’s not a suit, it’s a Zegna.” It is focused on the Torino suit, inspired by founder Ermenegildo Zegna’s own, made from the Vellus Aureum fabric, which Tagliabue described as “the finest wool in the world.”
The campaign accompanies the launch of drop two of Zegna’s fall collection, which Tagliabue said was well-received in the stores, with “an initial positive feedback.”
Tagliabue also highlighted the new Zegna store opened in the Miami Design District, “marking another important step forward in the strategic expansion of our presence in the U.S. market.” An event will be held during Art Basel in December, Tagliabue said.
Additionally, Zegna just opened a Salotto, a Su Misura and by-appointment venue for the brand’s VICs, offering exclusive collections and unique shopping experiences at Plaza 66 in Shanghai, bringing the total to three globally following Beijing and Singapore.
“We want to keep on fueling the brand that is with positive tailwind but we don’t want to squeeze the numbers of the second half of the year in order to deliver in the short term,” Tagliabue said. “We see big potential in the long-term and we want to keep on having the right events, the right investments, just cutting discretionary costs, not anything else.”
In the first half, textile revenues were down 6.6 percent to 67.1 million euros.
Adjusted operating profit at the Thom Browne segment totaled 4.5 million euros, with an adjusted margin of 3.5 percent compared to 12.1 percent led by a negative operating leverage resulting from the decrease in revenues in the period especially in the wholesale channel, and higher initial costs related to the newly opened DTC stores, which have not yet reached their run-rate efficiency.
As reported, Thom Browne CEO Rodrigo Bazan exited the brand on Aug. 31, succeeded by Sam Lobban, previously executive vice president and general merchandising manager for apparel and designer at Nordstrom. Bazan had been leading Thom Browne since 2016, growing its sales threefold.
Tagliabue said the wholesale decline at Thom Browne will be reduced in the second half and “of course, having on board Sam Lobban as the new business leader, bringing and injecting a consumer-centric approach, starting from merchandising, training in retail and all the different levers that then bring to life the stores, bringing it back to double-digit EBIT where it belongs.”
Adjusted operating loss for the Tom Ford Fashion segment was 19.4 million euros, compared to a loss of 11.9 million euros, primarily due to investments in the expansion of the store network and in new talents, IT and the corporate and retail structure to build the platform and support the expansion of the business.
Group adjusted operating profit amounted to 68.7 million euros, compared with 80.9 million euros in the first half last year. The 100 basis points decline in the 7.4 percent margin was attributed by Paola Durante, in charge of investor relations, to the selling and general and administrative higher incidence.
“It was also slightly negatively impacted by the currencies movement as the euro since April appreciated, particularly compared to the U.S. dollar and the renminbi, which are the two most important currencies for our group,” she said. “We are aware that the sector remains challenging and volatile. However, we know that we have implemented actions to protect our profitability.”
Tagliabue said that “all in all, I can say we have entered September with good energy across all three brands, but it’s essential to remain cautious and vigilant, as initial signs should not be considered yet as consolidated.”
The context “calls for a cautious and thoughtful approach. As a final comment, I can add that by region, we still continue to see strong momentum in Europe, the Middle East and America.”
The Greater China region “remains challenging and volatile. It is true that in some recent weeks, the trend in GCR has likely improved also thanks to easier comparison base, but still staying on the negative side. So it is yet early to draw a solid conclusion about this latest trend.”
Tagliabue highlighted the quality of the DTC full price sales. He said the consensus of 2025 revenues of 1.92 billion euros can be organically achieved and that the adjusted EBIT of 173 million euros “is realistic.”
Prices were increased in low-single-digit terms “in a systematic approach to offset cost dynamics and currency dynamics in fall 2025 when there was the addition of incremental tariffs,” Tagliabue said. “We have acted in order to reflect this into our U.S. prices for winter 2025 live since August and we are not seeing a substantial boomerang from consumers. As I said before, we keep on seeing good momentum in the U.S.”
In the first half, selling, general, and administrative totaled 501.8 million euros, or 54.1 percent of revenue, compared to 497.6 million euros, largely reflecting investments in the expansion of the DTC distribution network, only partially offset by actions taken to contain discretionary costs across brands.
Capital expenditure totaled 54 million euros compared to 60.1 million euros mainly related to the expansion of the DTC store network across the three brands and to a portion of the investments for the new shoe production plant in Parma, Italy.
As of June 30, net debt stood at 92.1 million euros, in line with 94.2 million euros at the end of December last year.
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