Ermenegildo Zegna Q2 2025 Earnings Report

Ermenegildo Zegna EPS Results

• Actual EPS: N/A
• Consensus EPS: $0.12
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Ermenegildo Zegna Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $1.09 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Ermenegildo Zegna Announcement Details

• Quarter: Q2 2025
• Date: 9/5/2025
• Time: Before Market Opens
• Conference Call Date: Friday, September 5, 2025
• Conference Call Time: 8:00AM ET

Ermenegildo Zegna (NYSE:ZGN) is a global luxury fashion house specializing in men’s tailored clothing, casualwear, accessories, footwear and fragrances. With a focus on high-quality fabrics and craftsmanship, the company manages the entire value chain from wool sourcing and textile production to garment design, manufacturing and retail distribution.

Founded in 1910 by Ermenegildo Zegna in Trivero, Italy, the company began as a textile mill dedicated to producing fine wool fabrics. Over the decades it expanded into ready-to-wear clothing and built a reputation for sartorial excellence. The group’s portfolio includes bespoke tailoring, sportswear collections and licensed fragrance lines.

Ermenegildo Zegna maintains a global retail network of more than 500 boutiques and shop-in-shops across over 100 countries, serving markets in Europe, Asia-Pacific, the Americas and the Middle East. In addition to its monobrand stores, the company sells through e-commerce platforms and department store concessions, supported by a vertically integrated manufacturing footprint in Italy and abroad.

The company remains majority-owned and managed by the founding Zegna family, now in its fourth generation. Under their stewardship, Ermenegildo Zegna has placed increasing emphasis on sustainable sourcing, environmental initiatives and innovation in fabric technology, reinforcing its leadership in the luxury menswear segment.

Ermenegildo Zegna Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Direct-to-consumer revenue grew 6% organically, now representing 82% of branded sales (up from 76%), lifting gross margin by 110 basis points to 67.5% in H1.
• Negative Sentiment: Group adjusted EBITDA fell 100 basis points to a 7.4% margin (€69 million) in H1, pressured by higher SG&A costs for DTC expansion and unfavorable currency movements.
• Positive Sentiment: The core Zegna segment delivered €94 million in adjusted EBITDA with a 14.3% margin (up 150 bps), driven by operating leverage and cost controls in the DTC channel.
• Negative Sentiment: Thom Browne’s adjusted EBITDA dropped from €20 million to €4 million, and Tom Ford Fashion widened its H1 loss to €90 million, reflecting wholesale headwinds and planned investments in stores and infrastructure.
• Positive Sentiment: Net profit rose 53% to €47.9 million, aided by €6 million of positive financial and FX gains (vs. –€25 million last year) and a lower effective tax rate of 30%.

Presentation

[Operator]

Hello everyone, and thank you for standing by. Today's Ermenegildo Zegna Group H1 2025 financial results call will be beginning in just two minutes' time. We thank you for your patience. Good afternoon, good morning everyone. Thank you for joining the Ermenegildo Zegna Group H1 2025 financial results call. Please note that today's material and presentation are available under the zegnagroup.com website. Joining us today, the Zegna Group leadership 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 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.

[Operator]

Please refer to the forward-looking statement's cautionary statement included at page 2 of today's presentation. I'll now hand over to Paola Durante.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Thank you. Thank you, Operator, and good morning and good afternoon everybody. Thank you for being here today on our H1 2025 results conference call. As already has been said by the Operator, I'm Paola Durante, and here with me there is Gianluca Tagliabue, our CFO and COO, and Alice Poggioli, our Director. I will briefly comment on the first six months' financial results, and then we'll leave the floor to Gianluca for some final remarks. First, as 2025 revenues have been confirmed at €928 million, minus 2% organic, driven by a good, a very good plus 6% DTC organic performance. I will skip commenting more on revenues since we have already seen and commented during our call at the end of July. Let's then move on the presentation at page 7. First of all, we start deep diving on our metrics, looking at gross profit.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

First, as 2025 gross profit reached €626 million, with a margin on sales of 67.5%. The 110 basis points margin improvement has been driven mainly by a better channel mix since the DTC revenues generated 82% of our group branded revenues, which is higher, 6.6% higher compared to the 76% in the first six months of 2024. As you know, you probably know, DTC gross margin is higher than the wholesale. Moving to selling, general, and administrative costs. You know that these costs are on the other end, the other face of the coin when strengthening the DTC channel. This cost reached in the first six months €502 million, in line with the €498 million in the first six months of 2024. The incidence on revenues has grown to 54.1%, which compares to 51.8%. This higher incidence on revenue has been largely driven due to three main effects.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

The first one, a negative operating leverage, in particular at Thom Browne. The second, the cost related to support our long-term growth trajectory, in particular in building talent team, in building a stronger IT infrastructure and CRM platform. This in particular, not only, but in particular at Tom Ford Fashion. The third element is a higher initial cost incidence for the newly opened stores. You know, it is normal that at the beginning stores do not reach the long-term run rate revenue, so the incidence of cost related to the openings is normally initially higher. At the same time, we undertook actions to contain costs across all the three brands, which has helped maintaining under control the selling, general, and administrative costs. Moving to marketing, marketing expenses reached €63 million, around 7% incidence on revenues, substantially in line with what we reported last year.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

This is notwithstanding some important events that took place in the first six months of 2025. You probably remember the Las Vegas, Dubai, but I also remind you that also last year we had some important events. With page 7, I would not comment more. Let's move, let's skip to page 8 of the presentation where we analyze our adjusted EBITDA for the group and by segment. First of all, you know that adjusted EBITDA is the main performance metric that we use to analyze our business both at group and at segment level. For the reconciliations between adjusted EBITDA and operating profit, you can look, you can see on the appendix of this presentation. In the first half of 2025, adjusted EBITDA reached €69 million, with an EBITDA margin of 7.4%, down 100 basis points versus the first six months of last year.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

The reason of this decline is clearly linked to what I already commented when talking about selling, general, and administrative higher incidence, and also has been slightly negatively impacted by the currencies movement. You remember that since April, currencies, euro appreciated, in particular compared to U.S. dollar and renminbi, which are the two most important currencies for our group. Let me also comment or add something that we already said during the call in July. We confirmed that also in 2025, in the second part, adjusted EBITDA will be higher compared to the first part of the year. Of course, we are aware that the sector remains challenging and volatile. However, we know that we have implemented actions to protect our profitability. Let's now look at our results by segment.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

First of all, talking about the Zegna segment, which as you know includes not only Zegna brand, but also the textile division and the third-party brands. This segment generated an adjusted EBITDA of €94 million, with a margin of 14.3%, which compares to 12.8% in the first semester of 2024. This important 150 bps increase has been led by higher operating leverage, largely as a result of a more efficient DTC channel and cost control measures. Thom Browne, adjusted EBITDA for the Thom Browne segment was €4 million compared to €20 million in the first six months of 2024. This adjusted EBITDA contraction was driven by the sharp decrease in revenues in the period, in particular in the wholesale channel, and an increase in the selling cost, in particular due to the DTC network expansion.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Let's now move to Tom Ford Fashion segment, which has recorded a €90 million adjusted EBITDA loss, which compared to the €12 million negative last year. This is a result of the planned, the expected investments that we made in the store network expansion, in talent team, in building a talent team, in building a better, stronger IT infrastructure to create the right size platform to support the business expansion. I leave for further comments and questions at the end. Let's now move to page 9, income statement. Here, I just comment the net profit line or the profit line, which reached in the first six months of this year €48 million, €47.9 to be precise, up 53% compared to the €31 million last year. The increase in profit is the result of higher financial income and foreign exchange gains.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

These two items combined moved in the semester from a negative €25 million to a positive €6 million. This reflects largely, I would say, the fair value remeasurement of liability for put option held by non-controlling interest. The most important liability is actually held in U.S. dollars, so the euro appreciation has also benefited this line. The second important effect to consider is looking at the tax rate, the income taxes, which was €20.1 million in the first six months of 2025, corresponding to a tax rate of 30% versus last year 35%, as you see from the table. I can also anticipate that a tax rate in the region of 30%, 28% to 30%, is more aligned to our expectations for year-end. Now let's look at capital expenditure. Let's move to page 10 of the presentation. CapEx reached €54 million, with an incidence of revenues of around 6%.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

This €54 million has been two-thirds related to investments in the development of the store network across the three brands. The remaining part is mainly related to the investments in production. You know we are building the important plant for the shoe business in Parma and also some IT investments. For year-end, you remember we anticipate a CapEx incidence on revenue of around 6%, 7%, and I can confirm these expectations also because in the second part of the year, investment for the Greenfield production site for footwear will actually kick in even more importantly. Trade working capital at the end of June was equal to €442 million, which compared to €467 million last year. This reduction has been driven by better inventory management, as you can see from the chart, and also lower receivable. The last one clearly also linked to the streamlining of the wholesale business.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Finally, on page 11, free cash flow, I just commented that the free cash flow absorption has been of €23 million this year, and last year it was around €7 million. This higher absorption, as you can see, has been driven by the lower operating cash flow. Not much to comment on page 12, just saying that the net debt at the end of June of around €92 million was actually fairly in line with what we reported at the end of December 2024. I will finish here my brief comments and leave now the floor to Gianluca for the final remarks. Thank you.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

Thank you, Paola. Good afternoon, everybody. Let me give you a brief update on the actions that we did in the last few weeks since we last spoke before going to the Q&A session. Starting with Zegna. We just launched the Zegna Fall-Winter 25 marketing campaign labeled "It's not a suit, it's a Zegna." For Fall 25, a new chapter has been presented, rooted in a century of style. The focus of the campaign is Zegna Torino, the suit that comes directly from our founders' closet, and we made it with our unique new fabric, the Velusarium, the finest wool in the world. In the campaign, the Torino suit is matched with Pecta shoes that are the winter version of our Trepot stage to create a unique, charismatic, and in one word, Zegna look.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

The campaign accompanies the launch of Drop 2 of the Fall-Winter collection, which has received in the stores initial positive feedback since we began pre-sales and pre-orders a couple of weeks ago. Moving on to the Zegna DTC network, we are pleased to announce the opening of our new store in Miami Design District, marking another important step forward in the strategic expansion of our presence in the U.S. market. Additionally, we just opened a new Salotto, which are the permanent by appointment stores for our very important client at Plaza 66 in Shanghai, bringing the total to three globally, following the openings in Shinkon Place, Beijing, and Paragon Singapore. As you know, as I said, the Salotto is a by appointment only store offering exclusive collections that you don't find in the regular stores and a unique shopping experience that reflects the essence of Zegna luxury and personalization offering.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

Moving to Thom Browne, we just launched the Fall 25 campaign, which, in line with the brand communication strategy, reflects an evolution of uniformity to include lifestyle-oriented visuals with distinctive DNA that makes Thom Browne authentic and unique, remaining unmistakably present. On Thom Browne, let me also remind you that since September 2, that is this week, we are pleased to have Sam Lobban as that has officially started his mandate as CEO of the brand. Finally, Tom Ford Fashion. The first Tom Ford campaign signed by Ida Rachman has been released and it has been very well received, as confirmed by many comments made by journalists and media experts. Either collection touched the store's floor at the end of August. It is therefore early to comment on the trends, but the first very initial reactions in the stores have been really positive.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

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 a consolidated trend. The sector continues to face challenges and uncertainty, which 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, Middle East, and Americas. GCR remains challenging and volatile. It is true that in some recent weeks, the trend in GCR has slightly improved, also thanks to easier comparison base, but still staying on the negative side. It is yet early to draw a solid conclusion about this latest trend of GCR. I think I can stop here and we can now open to the Q&A session. Paola.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Thank you.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Thank you, Gianluca. Please, Operator, can you open to the first question from our audience? Thank you.

[Operator]

Thank you. We will now begin the question and answer session. If you would like to ask a question, please do so now by pressing STAR followed by the number one on your telephone keypad. Our first question comes from Anthony Charchafji with BNP Paribas. Please go ahead.

[Anthony Charchafji, Equity Research Associate - Luxury Goods at BNP Paribas]

Yes, good morning. It's Anthony from BNP Paribas. Thank you very much for taking my question. I have just two. The first one would be on the current performance in terms of margin. It seems that the gross profit margin is still continuing its poor direction since last H1 2024. Could you maybe give a bit more color on the bridge of this plus 110 bps? Maybe given the pricing effects impact on top of channel mix, that would be my first question. Also, if we should still see 67% at least gross margin in H2 despite the tariffs. My second question would be on H2 and I would say expectation. Thank you for giving a bit of color on the current trends. It seems that consensus is expecting close to 4% organic in H2, which is a nice improvement from Q2.

[Anthony Charchafji, Equity Research Associate - Luxury Goods at BNP Paribas]

You already commented that you were happy with consensus being around $173 million at the EBIT level, which would imply a flat margin. Are you still expecting this development in terms of both top line and margin? That would be my second question. Thank you.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Thank you, Anthony. I leave clearly all the two questions to Gianluca. The first one on gross profit, both analysis on the first half and what we expect for the second part of the year, and then on the consensus expectations.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

Gross margin, hi, Anthony, by the way. Gross margin, the evolution is definitely a result of the DTC revenues that are reaching at this point 88% versus 86% last year. Within the DTC, we have been pushing, I think we have discussed many times also the quality of that DTC. It's not something that we report, but we carefully monitor the sell-through and sell-through at full price, which definitely is a step ahead on the Zegna brand versus the other two brands. In the three brands with different levels of maturities, we are pushing up the sell-through, implicitly creating the opportunity to reduce the number and the incidence of outlets. One number is evident, the DTC weight. Within the DTC is the quality of the DTC that is the underlying factor that is helping us move forward the gross margin where we think we deserve to be.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

Apart from channel, the journey of personalization is also a driver. The fact that we are able to transfer into the price, the quality, and the service unique that we deliver to our customers. I think that is an indicator, a synthetic indicator of our ability to stay full price and be recognized for the quality that we deliver. In terms of H2, if you remember, we indicated a low single-digit growth on the revenue side for the year. We confirmed that in organic terms. We clarified that in organic terms, when we provided the indication, the USD euro and renminbi euro were very different from today. We need to take this into account. Today, the consensus that we see at $1,923, I go by art, no, but it's the right number, $1,923. We believe that correctly reflects also the changing currency.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

If you look at that number on an organic basis, it corresponds to low single-digit organic. On the adjusted EBIT, I think that the consensus that we have in front of us, that is $173, indeed is incorporating the same thing about the currency swing. We believe that this adjusted EBIT at consensus $173 is realistic.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Okay.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Anthony, I think we answered, but if there is any follow-up, we are here. If not, we can go to the second question or the second analyst.

[Anthony Charchafji, Equity Research Associate - Luxury Goods at BNP Paribas]

Yeah, all good. Thank you.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Thank you, Anthony. Operator, for the second one.

[Operator]

Thank you. Our next question comes from Oliver Chen with TD Cowen. Oliver, please go ahead.

[Tom Nass, VP - Equity Research at TD Cowen]

Hi, this is Tom Nass on for Oliver. I wanted to ask about the margin improvement in the Zegna segment. Specifically, if you could speak to some of the opportunities you think may be on the road ahead as to where segment margins could trend over the longer term. As a follow-up, I wanted to ask on margins in the Thom Browne segments and the progress you've been seeing there with the wholesale rationalization. I guess more specifically, how should we think about modeling margins in the Thom Browne segment over the long term? Thanks.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Thank you, Oli. Thank you for the two questions. They are both on operating margins on EBIT. The first one is for Zegna and the opportunities on the long term, and the second one is on Thom Browne. Gianluca is your man.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

Yeah, in terms of margin for Zegna, we were able to bring it up at this point higher than the 14%. If you ask us what is the journey of this, let's be mindful that we keep on investing on Zegna. We will have also investments. We need to decouple short term from long term. If we talk about short term, didn't commit to a specific number, but definitely something between 13% and 14% is the number that we see as the number for the year. Definitely, the journey of growth for Zegna needs to go. We have always mentioned the 15%. That is the first step we need to get. We see the potential for the brand to get there, not for the year. For Thom Browne, of course, we have paid the bill of the minus 52% of wholesale in the first half.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

We have declared that for the year, the decline of wholesale will not be minus 50%. We see the second half reducing the decline in the range of minus 20%. The impact in the first half has deeply been affected by this step down of revenues, which were much higher in the first half, first quarter of 2024. Of course, having on board Sam Lobban as the new business leader, bringing and injecting what we want to be a DTC-centric approach, starting from merchandising, starting from training in the retail, and all the different levers that then bring to life the stores is what we are betting for Thom Browne to bring Thom Browne back to a double-digit EBIT that is where it should belong.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Perfect. I don't know if, Oliver, we answered your questions or any follow-up. Otherwise, we'll go to the next one.

[Tom Nass, VP - Equity Research at TD Cowen]

That's all. Thank you.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Okay. Operator, is there any other question?

[Operator]

Thank you. Our next question comes from Chris Huang with UBS. Chris, please go ahead.

[Chris Huang, Analyst at UBS Group]

Oh, hi. Thanks for taking my questions. I have two. The first one on current trends. I think, Gianluca, you previously touched on some early signs of improvement when it comes to the Chinese consumers. If I remember correctly, Q3 was the quarter last year when you started to see meaningfully easier comps for the Chinese consumers. Can you maybe help us understand a little bit more on the signs you're seeing? Is it traffic coming back? Is it conversions going up? Can you also confirm with Chinese consumers in the first two months of the quarter? I know it's still declining, but are we talking about maybe less than double-digit decline in the single-digit area? Secondly, on margin shifts, as a follow-up to the previous question on Zegna segment, if I heard correctly, you said that for 2025, you're expecting Zegna segment margins to land around 13% to 14%.

[Chris Huang, Analyst at UBS Group]

That would imply H2 to see quite a bit of contraction year over year. On the basis of probably more H1 weighted margin investments, how do we square this equation? Thank you.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Okay. Thank you. Thank you, Chris. Let's start with the second one on margin for Zegna. I leave Gianluca to answer. On the China current trend, we can give you some initial more comments on colors, but really, I would like to leave any detailed comment to our Q3 revenue results conference call that, as you know, is in October. This is not a conference call that is meant to comment deeply on current trends. I am leaving to Gianluca on margins.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

On margins, we know that we have some investments to be done in the second half. We have, for instance, an event in Miami around Art Basel to be done in December. We have in front of us still four months that are uncertain. We don't want to set expectations that can be disappointing. The combination of two let us invite you to stay within that range, effort to be at the end of the year to say that I was wrong on the upper side. We know that we have, we don't want to cut strategic actions. We want to keep on fueling the brand that is with positive tailwind. We don't want to squeeze the numbers of the second half of the year in order to deliver any bit on the short term. We see big potential on the long run of the Zegna brand. We see results.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

We want to keep on having the right events, the right investments. We are just cutting discretionary costs, not anything else.

[Chris Huang, Analyst at UBS Group]

Can I just follow up on marketing? Can you just confirm if for the full-year group level, it's still going to be around 6% of sales?

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

6%.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

Yeah.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Yeah, it's around 6%, Chris, for the group.

[Chris Huang, Analyst at UBS Group]

Okay, thank you.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Okay.

[Chris Huang, Analyst at UBS Group]

Thank you.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Thank you so much, Chris. I'll leave it to the next one.

[Operator]

Thank you. Our next question comes from Louise Singlehurst with Goldman Sachs Group. Louise, please go ahead.

[Louise Singlehurst, Managing Director at Goldman Sachs]

Good afternoon, everyone. Gianluca and Paola, thank you for taking my questions. Just two quick follow-ups for me, please. Firstly, on pricing, can you just remind us where we are now going to, obviously, the fall winter, the pricing that's gone through, and any plans for the second half? I suppose the reference there is really on the commentary for the U.S. because we've been hearing a lot from the peers recently in terms of the luxury positioning, the price increases that have gone through so far this year. There hasn't really been any impact on volumes or any consumer pushback. Secondly, I know this is a call. It's not about current trading or we're going to get recent trends, but if we think about that low single-digit outlook for the full year and where we are entering September, I suppose where's the biggest risk that we still see?

[Louise Singlehurst, Managing Director at Goldman Sachs]

Is it more on the China aspect and the pace of recovery, or is it more the expectations management across the different regions? Just quite interested to hear your feedback, Gianluca, because obviously the U.S. is probably a lot stronger than we anticipated year to date. Hopefully, there are some tentative signs in China, but I know it's early. Thank you.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

Hi, Louise. The pricing starts from pricing. As we declared, we have been asking always on a low single-digit price increase, that's on a systematic approach to offset cost dynamics and currency dynamics. In Fall 2025, when there was the addition of incremental tariffs, we have acted in order to reflect this into our U.S. Fall-Winter 2025 prices, which have been live since August of this month. We are simply taking care of covering the burden of incremental tariffs in the U.S. We are not seeing a substantial boomerang from the consumers. As I said before, we keep on seeing good momentum in the U.S. We have not seen a change, an inflection point in our solid trajectory of growth in the U.S., first in the Zegna brand, but also more recently with the IDAR collection. We can say the same positive momentum also on the Tom Ford.

[Louise Singlehurst, Managing Director at Goldman Sachs]

Also, Thom Browne.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

Also, Thom Browne, despite being smaller in the U.S. environment, they just opened some stores, but the business size is smaller. That is the comment on the Fall-Winter 25 pricing. The second, Paola, remind.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

The second was the outlook for H2 and where we see the main risk is China.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

It's China. It's China because we are still in a volatile environment, so we don't want to draw conclusions from a few weeks where we are seeing the trend less negative.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Offer easier base of comparison.

[Gianluca Tagliabue, CFO & COO at Ermenegildo Zegna]

We want to, we would be much more comfortable in a situation when we see China solid. As Gildo mentioned last time, we are entering the next year into a cautious mode that we have labeled as China into a new normal. Gildo mentioned that. We want to think and we want to plan and be ready for 2026, which is steady to this year. That is, we are not banking on a rebound for the next year of China. If it comes, we will be ready to take advantage and enjoy the growth. We are planning to stay in this new normal situation through next year.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Thank you, Louise.

[Louise Singlehurst, Managing Director at Goldman Sachs]

Thank you.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Okay. Is there any follow-up questions or any other questions from the audience?

[Operator]

We have no further questions registered. Paola, I'll hand back to you.

[Paola Durante, Chief - External Relations at Ermenegildo Zegna]

Thank you. Thank you to everybody. As always, a very interesting and nice question to us. We always enjoy spending some time with you because we enjoy, we will soon see on October 23rd. Let's see and catch up on Q3 revenues in a month and a half. Thank you, everybody. Have a nice weekend.

[Operator]

Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your line.

Participants

Executives

• Paola Durante, Chief - External Relations
• Gianluca Tagliabue, CFO & COO

Analysts

• Anthony Charchafji, Equity Research Associate - Luxury Goods at BNP Paribas
• Tom Nass, VP - Equity Research at TD Cowen
• Chris Huang, Analyst at UBS Group
• Louise Singlehurst, Managing Director at Goldman Sachs