Half Year 2025 Ermenegildo Zegna NV Earnings Call Transcript
Key Points
- Ermenegildo Zegna NV (ZGN) reported a gross profit margin improvement of 110 basis points, reaching 67.5%, driven by a better channel mix and higher DTC revenues.
- The Zegna segment achieved an adjusted EBIT margin of 14.3%, up from 12.8% in the first half of 2024, due to higher operating leverage and cost control measures.
- Net profit increased by 53% to EUR47.9 million, attributed to higher financial income and foreign exchange gains.
- The company successfully managed inventory, reducing trade working capital to EUR442 million from EUR467 million the previous year.
- Ermenegildo Zegna NV (ZGN) confirmed a low single-digit organic growth expectation for the year, with consensus reflecting realistic adjusted EBIT expectations.
- Revenues for the first half of 2025 were EUR928 million, reflecting a 2% organic decline.
- Selling, general, and administrative costs increased, with an incidence on revenues rising to 54.1% from 51.8%, driven by negative operating leverage and costs related to long-term growth support.
- Thom Browne segment's adjusted EBIT fell to EUR4 million from EUR20 million in the first half of 2024, due to a sharp decrease in wholesale revenues and increased selling costs.
- Tom Ford Fashion recorded a EUR19 million adjusted EBIT loss, attributed to planned investments in store network expansion and IT infrastructure.
- The company remains cautious about the challenging and volatile market conditions, particularly in the Greater China Region (GCR), which continues to show negative trends.
Good afternoon and 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. Please refer to the forward-looking statements' cautionary statement included at page 2 of today's presentation.
I will now hand over to Paola Durante.
Thank you. Thank you, operator, and good morning, and good afternoon, everybody. Thank you for being
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