Half Year 2026 Ermenegildo Zegna NV Earnings Call Transcript
Key Points
- Ermenegildo Zegna NV (ZGN) reported a solid first half of 2026 with adjusted EBIT increasing to EUR74 million from EUR69 million year-over-year, driven by improved operating leverage and a favorable channel mix as DTC revenues grew to 86% of branded revenues.
- The ZEGNA segment demonstrated strong momentum, with adjusted EBIT margin expanding by 50 basis points to 14.8%, supported by higher revenues per square meter and improved sell-through in the DTC channel.
- The TOM FORD Fashion segment showed significant improvement, reducing its adjusted EBIT loss to EUR12 million from a EUR19 million loss in the prior year, driven by revenue growth and cost discipline.
- The company generated positive free cash flow of EUR19 million in H1 2026, a substantial improvement from a EUR23 million absorption in the same period last year, and ended the period with a net cash position of EUR60 million.
- Management confirmed that the ZEGNA brand's solid momentum has continued through July and August, with substantial double-digit positive trends in DTC across all regions, and the company remains confident in its full-year adjusted EBIT consensus of around EUR195 million.
- The Thom Browne segment reported a negative adjusted EBIT of EUR8 million, a decline from a positive EUR4 million in the prior year, due to adverse foreign exchange movements, inventory evolution, and costs related to its transition to a retail-first model.
- The transformation of Thom Browne's wholesale network is taking longer than initially anticipated, with the company expecting a continued decline in wholesale revenue, albeit at a slower absolute pace than last year.
- Foreign exchange movements negatively impacted top-line growth by 3 percentage points in the first half of 2026, with a more severe impact on the Thom Browne segment, which faced a 5 percentage point headwind.
- Reported profit for the first half of 2026 decreased to EUR28 million from EUR48 million in the prior year, largely due to the absence of a non-monetary gain from the remeasurement of the Thom Browne put option liability that benefited 2025 results.
- The company noted a visible deceleration in Thom Browne's performance in Q3, partially attributed to a challenging macroeconomic environment and softness in the Chinese market, which has impacted the brand's performance over the summer.
Good afternoon. Good morning, everyone. Thank you for joining the Ermenegildo Zegna Group first-half 2026 financial results call. Please note that today's material and presentation are available under the zegnagroup.com website.
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 on page 2 of today's presentation.
I'll now hand over to Paola Durante, Chief of External Relations and Sustainability.
Thank you. Thank you, operator, and good morning, good afternoon, everyone. Thank you for being here today with our conference call on first half of 2026 results. I will briefly comment on
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