Ermenegildo Zegna NV (ZGN) Half Year 2025 Earnings Call Highlights: Navigating Market …

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This article first appeared on GuruFocus.

  • Revenue: EUR928 million, a 2% organic decline.

  • Gross Profit: EUR626 million with a margin of 67.5%, up 110 basis points.

  • Selling, General and Administrative Costs: EUR502 million, up from EUR498 million, with an incidence on revenues of 54.1%.

  • Marketing Expenses: EUR63 million, around 7% of revenues.

  • Adjusted EBIT: EUR69 million with a margin of 7.4%, down 100 basis points.

  • Zegna Segment Adjusted EBIT: EUR94 million with a margin of 14.3%, up 150 basis points.

  • Thom Browne Adjusted EBIT: EUR4 million, down from EUR20 million.

  • Tom Ford Fashion Adjusted EBIT: EUR19 million loss, compared to EUR12 million loss last year.

  • Net Profit: EUR47.9 million, up 53% from EUR31 million.

  • Capital Expenditure: EUR54 million, 6% of revenues.

  • Trade Working Capital: EUR442 million, down from EUR467 million.

  • Free Cash Flow: EUR23 million absorption, compared to EUR7 million last year.

  • Net Debt: EUR92 million, in line with December 2024.

Release Date: September 05, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

  • Ermenegildo Zegna NV (NYSE: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 (NYSE: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.

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