Q3 2025 Ermenegildo Zegna Earnings Call
Speaker #1: Hello everyone, and thank you for standing by. The Auto Xenia Group Q3 2025 revenues call will be beginning in just a few minutes' time.
Paola Durante: Hello everyone, and thank you for standing by. The Ermenegildo Zegna NV Q3 2025 revenue call will be beginning in just a few minutes' time. We thank you for your patience, and we will begin shortly. Good afternoon, good morning everyone. Thank you for joining the Ermenegildo Zegna Group Q3 2025 revenue call. Please note that today's material and presentation are available under the zegnagroup.com website. Joining us today are the Zegna Group's senior management 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.
Speaker #1: We thank you for your patience, and we will begin shortly. Good afternoon. Good morning, everyone. Thank you for joining the Rosania Group.
Speaker #1: Q3 2025 revenues pool. Please note that today's material and presentation are available under the Xenia Group website. Joining us today is the Xenia Group Senior Management Team, including Gianluca Tagliabue, Group CFO and COO, and Paola Durante, Chief of External Relations.
Speaker #1: Before we begin, we need to point out that the team will make certain forward-looking statements during the call. The group.
Speaker #1: 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 .
Speaker #1: Please refer to the forward-looking statements cautionary statement included at page two of today's presentation. I'll now hand over to Paola Durante.
Paola Durante: 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.
Speaker #2: Thank you . Thank you . And good morning . Also from myself . And good afternoon to everybody . Welcome to our group Q3 and nine months , 2025 revenues .
Paola Durante: Thank you. Thank you, producer, and good morning also from myself, and good afternoon to everybody. Welcome to our group Q3 and nine months 2025 revenues call. As usual, for Q1 and Q3 revenues, today's call is led by Gianluca Tagliabue and myself. Alice Poggioli is absolutely here with us. Our CEO, Mr. Gildo, will attend the February call on full-year 2025 revenue. Let's then move to page 7 of the presentation, where we comment on revenue strengths. You know that commenting on revenue strengths, we normally want to focus on organic performance, which excludes foreign exchange impacts, and therefore, it is better to reflect the underlying business dynamics. This approach actually is particularly relevant this year, given the sharp appreciation of the euro against the key currencies, such as the U.S. dollar and the Chinese renminbi, among the others.
Speaker #2: Call. And well usual for Q1 and Q3 revenues. Today's call is led by Gianluca Tagliabue and myself. Alicia Poggioli is absolutely here with us.
Speaker #2: Our CEO , Mr. Gildo , will attend the February call on full year 2025 revenue . Let's then move to page seven of the presentation , where we commend revenue trends .
Speaker #2: You know that the revenue trends we normally want to focus on are organic performance, which excludes foreign exchange impacts. Therefore, it is better to reflect the underlying business dynamics.
Speaker #2: This approach is particularly relevant to this year given the sharp appreciation of the euro against currencies such as the US dollar and the Chinese renminbi.
Speaker #2: Among the others . And I have to say even more in this quarter and the next one . In Q3 2025 , group reported , our group reported €398 million in revenues , up 4% .
Paola Durante: I have to say, even more in this quarter and the next one. In Q3 2025, our group reported €398 million in revenues, up 4% organic, with a sequential acceleration of the DTC channel, which was up 9% in the quarter, with, I have to say, remarkable results across the three brands. Nine months' revenues were €1.3 billion. Let's then move to page 8, and let's go directly to, I'd like to comment on the performance by brand. In Q3, ZEGNA brand recorded revenues of €249 million, with a 6% growth. This performance was led by solid performance in the DTC channel, particularly in EMEA and the Americas. Thom Browne revenues of €48 million in Q3. The brand, although remaining slightly negative in the quarter, showed a sequential improvement in both channels.
Speaker #2: Organic with a sequential acceleration of the DTC channel , which was up 9% in the quarter with the . I have to say , remarkable results across the three brands , nine months revenues were €1.3 billion , let's then move to page eight and let's go directly to .
Speaker #2: I'd like to comment on the performance by brand in Q3. The Xenia brand recorded revenues of €249 million, with a 6% growth.
Speaker #2: This performance was led by solid DTC , a solid performance in DTC channel , particularly in EMEA and Americus . Tom Brown Revenues of €48 million in Q3 .
Speaker #2: The brand , although remaining slightly negative in the quarter , showed sequential improvement in both channels . And Tom for fashion , which reported the €66 million in revenues , was up 4% .
Paola Durante: TOM FORD FASHION, which reported €66 million in revenues, was up 4% organic, which was driven by the DTC channel, also supported by the good reception of the full-winter '25 show collection. Last, Textile was flat in the quarter, while other revenues that you know are today a marginal part of our business and relate to the finished products, the ready-to-wear garments that we produce for Third Party Brands, reported a 12% growth. Moving now to page 9 and commenting on the geographic area revenues. Starting from EMEA, EMEA represented in the first nine months 36% of the group total revenue. It's the first region of our group. The quarter revenues in the quarter were up 3%, thanks to a very solid performance in the DTC channel, particularly at ZEGNA and TOM FORD FASHION, which was partially offset by the negative contribution of the wholesale.
Speaker #2: Organic , which was driven by the DTC channel , also supported by the good reception of the fall Winter 25 show collection . Last textile was flat in the quarter , while other revenues that you know are today a marginal part of our business and related to the finished product , the ready to wear garments that we produce for third party brands reported a 12% growth .
Speaker #2: Moving now to page nine and commenting on the geographic area revenues, starting from Mia, which represented 36% of the group total revenue in the first nine months.
Speaker #2: It's the first region of of our group , the the quarter revenues in the quarter were up 3% thanks to a very solid performance in the DTC channel , particularly at Xenia Fashion , which was partially offset by the negative contribution of the wholesale America's second region with the contributing to 29% of the nine months revenue recorded in the quarter , a 13% growth driven by the solid performance across the three brands .
Paola Durante: Americas, second region, contributing to 29% of the nine months' revenue, recorded in the quarter a 13% growth, driven by the solid DTC performance across the three brands, with the U.S. as a market, which is also the largest market, leading the performance. Let me say that also Latam, even if still a relatively small contributor to the region, continues to show robust double-digit growth. Commenting on cluster, I know that this is a question you normally ask after considering ZEGNA brand U.S. customers' cluster continues to grow, sound double-digit. The ZEGNA U.S. customers were growing both domestically and abroad. Moving to the Greater China region, which in the first nine months accounted for 23% of total revenues. In the quarter, revenues were down 7%, showing a sequential improvement across the three brands, with Thom Browne leading the trends.
Speaker #2: And with the US as a market , which is also the largest market leading the performance . But let me say that also Latam , even if still relatively small contributor to the region , continue to show robust double digit growth .
Speaker #2: Commenting on the cluster, I know that this is a question you normally ask after considering Xenia brand US customers. The cluster continues to grow around double digits, so the Xenia US customers were growing both domestically and abroad.
Speaker #2: Moving to the Greater China region , which in the first nine months accounted for 23% of total revenues in the quarter . Revenues were down 7% , showing a sequential improvement across the three brands , with the Tom Brown leading the trends .
Speaker #2: Finally, on the rest of the 12% of nine months' revenues, the quarter showed a 3% growth driven by strong performances recorded in Singapore.
Paola Durante: Finally, on the rest of APAC, 12% of nine months' revenues, the quarter showed a 3% growth, driven by strong performances, recorded in Singapore, of course, a smaller basis, but nice performance, and some improvements mainly in Korea. Page 10, I won't really go much in detail because, as you know, I prefer to comment, we prefer to comment on the brand by channel performance. Only two numbers I would like to highlight. The first one is the 9% DTC growth in the quarter, and the second one that DTC in the first nine months accounted at the group level for 82% of our revenues. Let's then move to page 11, ZEGNA. Commenting on ZEGNA. In the third quarter, ZEGNA DTC revenues grew 7%, or equal to 87% of the brand's nine months' revenues.
Speaker #2: Of course , smaller of smaller basis , but nice performance and some improvements in mainly in Korea . Page ten I won't really go much in details because as as you know , I prefer to comment .
Speaker #2: We prefer to comment on the brand by channel performance , only two numbers . I would like to highlight . The first one is the 9% DTC growth in the quarter , and the second one that DTC in the first nine months accounted at group level for 82% of our revenues .
Speaker #2: So let's then move to page 11 . Xenia , commenting on Xenia in the third quarter , Xenia DTC revenues grew 7% , equal to 87% of the brand's nine months revenues .
Speaker #2: This is 7% growth in the quarter was led by America , a solid double digit growth in EMEA and Americas . The Greater China region revenues trend remained negative , but showed some signs of improvement compared to the second quarter , you know , so thanks to a are easier or slightly easier base of comparison in in this quarter , the performance in the region remains volatile .
Paola Durante: This 7% growth in the quarter was led by a solid double-digit growth in EMEA and Americas. The Greater China region revenues trend remained negative, but showed some signs of improvement compared to the second quarter, thanks to a slightly easier base of comparison in this quarter. The performance in the region remains volatile. I have to say, it remains volatile and still difficult to read. Commenting on the cluster, the cluster improved in the quarter sequentially and was a negative, high single-digit compared to the double-digit we reported, you remember, previously. In ZEGNA, in the third quarter, closed up four stores, and these were mainly actually in GCR. Briefly, on the wholesale performance for ZEGNA, revenues were down 3%, or 11% in the nine months.
Speaker #2: I have to say remains a volatile and is still difficult to read . But commenting on the cluster , the the the cluster improved in the quarter sequentially and was a negative high single digit compared to the double digit .
Speaker #2: We reported . You remember previously . In Xenia in in the third quarter , close the fourth store in the and these were mainly actually in GCR briefly on the wholesale performance for Xenia .
Speaker #2: Revenues were down 3% or 11% in the nine months. I ask you in particular for the wholesale performance to consider or to look more into the year-to-date.
Paola Durante: I ask you, in particular for the wholesale performance, to consider or to look more into the year-to-date, in this case, the nine-month performance, which better reflects the underlying business. Sometimes quarterly performance can be affected by different timing of deliveries, in particular for ZEGNA, also for the drop strategy that, as you know, can cause different deliveries to our wholesale customers. For year-end, we confirm the indication for ZEGNA of a wholesale down in the mid-teens because, as we commented already several times, we are increasing control in the distribution of iconic products, and we also did some conversion of wholesale point of sales in retail concessions. Okay. Now, page 12, Thom Browne.
Speaker #2: In this case , the nine months performance , which better reflects the underlying business . Sometimes quarterly performance can be affected by different timing of deliveries .
Speaker #2: In for Xenia . Also for the drop strategy that , as you know , can cause and different deliveries to our wholesale customers for year end .
Speaker #2: We confirm the indication for Xenia of an old sale down in the mid teens because as as we commented already several times , we are increasing control in the distribution of iconic products and we also did some conversion of wholesale point of sales in retail concessions .
Speaker #2: Okay , now page 12 . Tom Brown . Tom Brown , DTC revenues were up 10% in the third quarter , showing a sequential acceleration , which was driven by the American region .
Paola Durante: Thom Browne DTC revenues were up 10% in the third quarter, showing a sequential acceleration, which was driven by the Americas region, also because of the new openings, as well as some sequential improvement in Greater China and rest of APAC. Thom Browne opened four DOS in the quarter, including an important concession at Selfridges Women in London and Kyoto Isetan. The wholesale, in line with expectation, was down 37% in the quarter and 50% in the first nine months. Let's then move to TOM FORD FASHION. I would say I can say last but not least, page 13. TOM FORD FASHION reported in the third quarter a 16% growth in the DTC channels, which has been driven by the successful reception of the fall-winter '25 collection in stores across all regions, and also by some new store openings.
Speaker #2: Also, because of the new openings as well as this, some sequential improvement in GCR and the rest of APAC. Tom Brown opened for those in the quarter, including an important concession at Selfridges.
Speaker #2: Women in London and Kyoto. Isetan, the Old Sailor in line with expectations, was down 37% in the quarter and 50% in the first nine months.
Speaker #2: Let's then move to Tom Ford fashion . I would say . I can say last but not least , page 13 . Tom Ford fashion reported in the third quarter , a 16% growth in the DTC channel , which has been driven by the successful reception of the fall Winter 25 collection in stores across all regions and also by some new store openings .
Speaker #2: So of course , also the work that has been done in this month in terms of people and training and talent in stores , is also bearing some results .
Paola Durante: Of course, also the work that has been done in this month in terms of people and training and talent in stores is also bearing some results. We know that we are just at the beginning of the journey to strengthen the brand in the fashion business, in particular in the DTC important channel. The path ahead of us is clear, is defined. We need to follow it step by step, and we just are doing the first step into it. That said, we are absolutely encouraged by the client's positive feedback on the collection. TOM FORD FASHION didn't open any store in the quarter, and the wholesale was down 19%, 10% in the first nine months. Again, some timing differences we confirm here by year-end, and wholesale performance negative in the region of 10%.
Speaker #2: But we know that we are just at the beginning of the journey to strengthen the brand in the fashion business, in particular in DTC.
Speaker #2: Important channel: the path ahead of us is clear, and we need to follow it step by step. We have just started taking the first step into it.
Speaker #2: That said, we are absolutely encouraged by the client's positive feedback on the collection. Tom Ford Fashion didn't open any stores in the quarter, and their old sailor was down 19%, 10% in the first nine months.
Speaker #2: Again, there are some timing differences. We confirm here, by year-end, a wholesale performance negative in the region of 10%. I finish my comment by showing on page 14 the nice facade of the very beautiful.
Paola Durante: I finish my comment showing on page 14 the nice facade of the very beautiful, sorry, ZEGNA store in the Miami Design District. Miami, you know, is a vibrant city, not only in the U.S. In December, ZEGNA will host an event during Art Basel Miami. As you know, art has always been part of ZEGNA's identity and legacy since our founder, Ermenegildo Zegna. Early this year, we signed a multi-year partnership with Art Basel, which offers a global platform to celebrate art that resonates with ZEGNA customers and ZEGNA values. In early December, we will have this nice event with our customers in Miami. On page 15, moving to page 15, you find our store network. No comments to be made here. You just need to see the numbers, I think. Before leaving the floor to Gianluca, on page 16, we have published the financial calendar for 2026.
Speaker #2: Sorry Xenia store in the Miami Design District . District Miami , you know , is a vibrant city not only in the US and in this in December , Xenia will host an event during the Art Basel Miami .
Speaker #2: As you know , art has always been part of Xenia identity and legacy . Since our founder , Ermenegildo Zegna , earlier this year , we signed a multi-year partnership with Art Basel .
Speaker #2: Which offers a global platform to celebrate art that resonates with Xenia customers and Xenia values . So in early December , we will have this nice event with our customers in in Miami and on page 15 , moving to page 15 , you find just , you know , our store network , no comments to be made here .
Speaker #2: You just need to see the numbers, I think. And before leaving the floor to Gianluca on page 16, we have published the financial calendar for 2026.
Speaker #2: You can find it here in our press release and also on our website. Please mark your agenda for next year. And with this, I now hand over to Gianluca for some final remarks before your Q&A.
Paola Durante: You can find it here in our press release and also on our website. Please mark your agenda for next year. With this, I now hand over to Gianluca for some final remarks before your Q&A.
Speaker #3: Thank you, Paula. So, before adding the Q&A session, I would like to share a few final remarks. Let me begin by highlighting the exceptional fashion shows presented by both Tom Ford Fashion and Thom Browne.
Gianluca Tagliabue: Thank you, Paola. Before I begin the Q&A session, I would like to share a few final remarks. Let me begin by highlighting the exceptional fashion shows presented by both TOM FORD FASHION and Thom Browne in Paris in this October. Both received enthusiastic recognition from the press and from our clients, reflecting continued progress along the path set for this brand. Talking about TOM FORD FASHION in particular, as Paola noted, the first Haider Ackermann collection for Winter 2025 arrived in the store at the end of August and was well received and contributed to our quarterly results. Of course, these are early signs, and while we are pleased to see such a positive start, we are aware that the journey to fully unlock TOM FORD FASHION's potential is still ahead of us and that it might not be a straight line. We must continue anyway building this momentum.
Speaker #3: In Paris . In this October . Both received enthusiastic recognition from the press and from our clients , reflecting continued progress along the path set for this brand .
Speaker #3: Talking about Tom Ford fashion in particular , as Paula noted , the first either Ackerman collection for Winter 25 arrived in the store at the end of August and was well received and contributed to our quarterly results .
Speaker #3: Of course , these are early signs , and while we are pleased to see such a positive start , we are aware that the journey to fully unlock Tom Ford Fashion potential is still ahead of us , and that it might not be a straight line .
Speaker #3: We must continue anyway, building this momentum on Tom Brown. Let me highlight the recent events also held to celebrate the opening of the Ginza store in Tokyo.
Gianluca Tagliabue: On Thom Browne, let me highlight the recent events also held to celebrate the opening of the Ginza store in Tokyo. The brand hosted a series of curated experiences from a screening of the Thom Browne documentary presented by GQ Japan to a cocktail party, an intimate dinner with celebrities and friends of the brand, and the presence of Thom himself. These moments reflect the brand's emotional connection with its audience. We'll see more of this unfolding on Thom Browne's social media channels in the coming weeks. Finally, turning to ZEGNA, we have already touched on the success of Drop 2, which saw an activation on September 1 and was launched alongside the campaign "It's Not a Suit, It's a Zegna." With this collection, ZEGNA celebrated its heritage and the ongoing pursuit of excellence and innovation embodied by Vellus Aurum, the finest wool. Vellus Aurum means golden fleece.
Speaker #3: The brand hosted a series of curated experiences, from the screening of the Tom Brown documentary presented by GQ Japan to a cocktail party and an intimate dinner with celebrities and friends of the brand, including the presence of Tom himself.
Speaker #3: These moments reflect the brand's emotional connection with its audience. We'll see more of this unfolding on Tom Brown's social media channels in the coming weeks.
Speaker #3: Finally, turning to Xenia, we have already touched on the success of Drop Two, which saw an activation on September 1st and was launched alongside the campaign.
Speaker #3: It's not a suit; it's a Xenia. With this collection, Xenia celebrated its heritage and the ongoing pursuit of excellence and innovation embodied by what the finest wool verrucarum means.
Speaker #3: The Golden Fleece, the Xenia Suit, and the Xenia Turino Suit draw directly from our founder's personal wardrobe, recalling the days he would drive to his tailor to craft suits with a unique, defined, and unmistakable style rooted in rich heritage yet forward-looking.
Gianluca Tagliabue: The ZEGNA Torino suit draws directly from our founder's personal wardrobe, recalling the days he would drive to his Torinese tailor to craft suits with a unique, defined, and unmistakable style. Rooted in heritage yet forward-looking, the Torino style bridges the past and the future. This campaign reaffirmed ZEGNA's role in shaping contemporary style, while the collection's results confirmed the strength of the brand's vision and the robustness of its execution. Let me remind also you that on October 1, we celebrated the reopening of the fully renovated store in Dubai Mall, which now includes Il Salotto, the brand's exclusive by-appointment-only private space. A space that is truly exceptional. I invite you, whenever you pass in Dubai, to visit. I will now share a few general closing remarks. Currency fluctuations, as Paola anticipated, continue to present a headwind for the sector.
Speaker #3: The Torino style bridges the past and the future. This campaign reaffirmed Xenia's role in shaping contemporary style, while the collection results confirmed the strength of the brand's vision and the robustness of its execution.
Speaker #3: Let me remind also you that on October the 1st , we celebrated the reopening of the fully renovated store in Dubai Mall , which now includes IL , the brand's exclusive by appointment only private space , a space that is truly an exceptional .
Speaker #3: I invite you, whenever you pass through Dubai, to visit. I will now share a few general closing remarks. Currency fluctuations, as Paolo anticipated, continue to present a headwind for the sector.
Speaker #3: We have seen that in Q3 it was between 3 and 4 points, and the base of comparison in this regard will be even stronger in the fourth quarter. Here, the impact of currency might be between 4 and 5 points from organic to reported. The volatility of consumer demand remains a defining factor, particularly in certain regions.
Gianluca Tagliabue: We have seen that in Q3 it was between 3% and 4%, and the base of comparison in this regard will be even stronger in the fourth quarter where the impact of currency might be between 4% and 5% from organic to reported. The volatility of consumer demand remains a defining factor, particularly in certain regions, starting with China, which we expect to remain volatile in the coming months. As Gildo noted in the prior calls, China remains a cornerstone for the sector and for us. We see it settling into a new normal, which we expect to lead into balanced growth rates in the coming years. That's the way we put ourselves in the mindset we had towards budget, towards open Dubai.
Speaker #3: Starting with China, which we expect to remain volatile in the coming months. As Gildo noted in the prior calls, China remains a cornerstone for the sector and for us.
Speaker #3: But we see it settling into a new normal , which we expect to lead into balanced growth rates in the coming years . That's the way we put ourselves in the mindset we had towards budget , towards open to buy in this environment , we know how important it is to stay sharply focused on the key priorities we have defined for each of the three brands , and to deliver on them .
Gianluca Tagliabue: In this environment, we know how important it is to stay sharply focused on the key priorities we have defined for each of the three brands and to deliver on them. The direction is clear. The projects in our pipeline are being implemented with discipline. This gives us a solid base to remain cautiously confident as we navigate the period ahead of us. With that, let me open the Q&A session.
Speaker #3: The direction is clear. The projects in our pipeline are being implemented with discipline. This gives us a solid base to remain cautiously confident as we navigate the period ahead of us.
Speaker #3: And with that, let me open the Q&A session.
Speaker #1: Thank you . We will now begin the question and answer session . If you would like to ask a question today , please do so now by pressing star , followed by the number one on your telephone keypad .
Paola Durante: Thank you. We will now begin the question and answer session. If you would like to ask a question today, please do so now by pressing the star followed by the number one on your telephone keypad. If you change your mind or you feel like your question has already been answered, you can press star followed by two to remove yourself from the queue. Our first question today comes from Anthony Charfaggi with BNP Paribas. Please go ahead. Your line is now open.
Speaker #1: If you change your mind or feel that your question has already been answered, you can press star followed by two to remove yourself from the queue.
Speaker #1: Our first question today comes from Anthony Khafagy with BNP Paribas. Please go ahead. Your line is now open.
Speaker #4: Good morning . It's Anthony from BNP . Thank you very much for taking my question . The first one would be on on current trading and any expectation that you could share into Q4 .
[Analyst]: Good morning. It's Anthony from BNP. Thank you very much for taking my question. The first one would be on current trading and any expectation that you could share into Q4. My second one would be on China, and namely mainland China performance at ZEGNA. Could you add a bit of color on what you're seeing in terms of traffic? More importantly, if you're seeing rather the affordable part of the demand that is coming back rather than the high end, that would be my second question. My last one would be on the FX impact, not on top line, but rather on margin. What do you expect for this year or rather into next year? Do you think that it's a fair assumption to assume some kind of impact into next year? Thank you very much.
Speaker #4: My second one would be on on China and namely mainland China . Performance at at at Xenia . Could you , could you add a bit of , of color on what you are seeing in terms of , of traffic and more importantly , if you're seeing the affordable part of the demand that is that is coming back and rather than the high end , that would be my second question .
Speaker #4: And my last one would be on on the FX impact , not on top line , but rather on on margin . What do you expect for for this year ?
Speaker #4: Or rather into next year ? And do you think that it's a that it's a fair assumption to , to assume some kind of , of impact into next year ?
Speaker #4: Thank you very much .
Speaker #2: Okay . Thank you , Anthony . Thank you for the three questions . I well , I live to to Gianluca . And then if there are other comments but on current trading and on China performance .
Paola Durante: Okay. Thank you, Anthony. Thank you for the three questions. I leave to Gianluca, and then if there are other comments, but on current trading and on China performance.
Speaker #3: Hi Anthony . So the current trading so Q4 just started . So we it's early to make a final comment after just a few weeks in any event , what I can anticipate we are not seeing trends substantially different from the one of Q3 .
Gianluca Tagliabue: Hi, Anthony. The current trading, so Q4 just started. It's early to make a final comment after just a few weeks. In any event, what I can anticipate, we are not seeing trends substantially different from the one of Q3. We need to keep on executing. The performance so far has been not different, in line. We need to remember a couple of things adding into Q4. First, as I said before, and that was also your third question, is FX is steep in terms of delta between reported and organic in Q4 because if you remember, we had a USD around 103, 104. That from November through January, that was probably the strongest moment for both USD and renminbi. Last year, we had a very solid Q4 with a high single-digit organic in direct-to-consumer. Anyway, having said that, the trend is not that different so far.
Speaker #3: So we need to keep on executing; the performance so far has not been different in line. We need to remember a couple of things heading into Q4.
Speaker #3: First , as I said before , and that was also your third question is FX is steep in in terms of delta between reported and organic in Q4 , because if you remember , we had a USD around 103 , 104 and that from November through January , that was probably the strongest moment for both USD and renminbi .
Speaker #3: And we last year we had a very solid Q4 with a high single digit organic in DTC . Anyway , I think that the trend is not that different so far in terms of China giving color can give you colors by geography within GCR and some by cluster spending .
Gianluca Tagliabue: In terms of China, giving color, I can give you colors by geography within Greater China and some by cluster spending. First, we are seeing that the top of the pyramid guests are performing well also in China, both on Vellus Aureus, on the most sophisticated high-price point suits. We are seeing good traction on the top of the spending. We are not yet seeing a solid, consistent indication on traffic and more affordable spending. That is what we are seeing. From a geographic standpoint, we can report some improvement on Hong Kong in terms of trend. We see the, call it, second-tier cities performing slightly better. I'm taking out Beijing and Shanghai, the other important cities, call it Shenzhen, Chengdu, Hangzhou. Those cities are slightly performing better than the two big ones. As I said, as Paola said, the environment is volatile. That's why we want to be cautious.
Speaker #3: So first we are seeing we are seeing that the top of the pyramid guests are performing well . Also in China , both on autos on the most sophisticated , high price point suits .
Speaker #3: So we are seeing good traction on the top of the spending. We are not yet seeing solid, consistent indications on traffic and more affordable spending.
Speaker #3: And that is what we are seeing . But from a from a , a geographic standpoint , we can report some improvement on Hong Kong in terms of trend .
Speaker #3: We see the call it second tier cities in slightly better . So I'm taking out Beijing and Shanghai . The other important cities , Shanghai , Shenzhen , Chengdu , Hangzhou .
Speaker #3: Those cities are slightly performing better than the the two big ones . But again , as I said , as Paulo said , the environment is volatile .
Speaker #3: That's why we want to be cautious . And that being cautious means for us betting on open to buy for next year , betting on CapEx and opex for next year , and possibly also and that is something we already mentioned .
Gianluca Tagliabue: That being cautious means for us betting on open Dubai for next year, betting on CapEx and OpEx for next year, and possibly also, and that is something we already mentioned, we have been pruning the landscape of our network by wherever meaningful, trying to consolidate the business in fewer, better stores. This is something that started in 2025, will continue in the next couple of years.
Speaker #3: We are we have been pruning the landscape of our network by wherever meaningful , trying to consolidate the business in fewer , better stores .
Speaker #3: This is something that started in 2025, and will continue in the next couple of years.
Speaker #2: On forex impact in 2026, what we can comment on our forex.
Paola Durante: On Forex impact in 2026, we can comment on our Forex.
Speaker #3: Oh of course the the impact does exist because because we edge . But you have some still you have some mitigated impact on the bottom line this year we I think we have hedged particularly well both USD and renminbi .
Gianluca Tagliabue: Of course, the impact does exist because we hedge, but you have some still, you have some mitigated impact on the bottom line. This year, I think we have hedged particularly well, both the USD and renminbi. This is very true for a full-winter 2025. It's also true for spring 2026. Now the topic will be on how we handle prices in full-winter 2026, which will be the second part of the year. The hedging covers at this point, we are happy with the hedging we have done through spring 2026 included.
Speaker #3: This is very true for for winter 25 is also true for spring 26 . So now the topic will be on how we handle prices in fall , winter 26 , which will be the second part of the year .
Speaker #3: So the edging covers at this point we are happy with the edging. We have done through Spring 26 included.
Speaker #4: Thank you, thank you.
[Analyst]: Thank you.
Paola Durante: I don't know.
Speaker #2: Thank you . Anthony . Thank you . And the second question . Operator or set of questions ?
[Analyst]: Thank you.
Paola Durante: Thank you, Anthony. Thank you. The second question, operator, or set of questions.
Speaker #1: Thank you. Our next question comes from Adrian with Goldman Sachs. Please go ahead.
Paola Durante: Thank you. Our next question comes from Adrian De Verga with Goldman Sachs. Please go ahead.
Speaker #5: Good afternoon . Gianluca . Paula and Alice , thank you very much for for taking my questions . I would also have three if possible .
[Analyst]: Good afternoon, Gianluca, Paola, and Alice. Thank you very much for taking my questions. We also have three, if possible. The first one is if you could please provide us with a bit more information on the consumer environment across regions. You already commented on China, but if you could give us a bit more on the US and on Europe, especially around traffic, conversion rates, and appetite to spend. My second question would be about the wholesale sector and the trends you're seeing so far in the second quarter and ahead of 2026. Is the rationalization of the channel almost done, and do you expect it to be finished by the end of this year, or could we still expect some impact into next year? Maybe my last question would be on TOM FORD FASHION. Could you comment on the performance there and on the integration of the brand?
Speaker #5: So the first one is if you could please provide us with a bit more information on the consumer environment across regions . So you already commented on China , but if you could give us a bit more on the US and on Europe , especially around , you know , traffic conversion rates and appetite to spend , my second question would be about the wholesale sector and the trends you're seeing so far .
Speaker #5: You know , in the second quarter and ahead of 2026 , is the rationalization of the channel almost done ? And do you expect it to be finished by by the end of this year , or could we still expect some some impact into into next year ?
Speaker #5: And maybe my my last question would be on Tom Ford . Could you comment on on the performance there and on the the integration of the brand ?
Speaker #5: If you could provide us a bit more color around this? Thank you very much.
[Analyst]: If you could provide us, yeah, a bit more color around this. Thank you very much.
Speaker #2: Okay . Okay . So three questions . So very let's say articulated on the consumer environment . And cross-region , maybe I just comment quickly on the by cluster performance .
Paola Durante: Okay. Okay. So three questions, so very, let's say, articulated. On the consumer environment and cross-region, maybe I just comment quickly on the by-cluster performance, and I'll leave Gianluca to elaborate more on if he has comments. On wholesale, Thom Browne and TOM FORD FASHION performance, I'll leave immediately directly to Gianluca. On by regions, what we have seen in the third quarter is a continued solid growth by cluster of double-digit growth of the U.S. and the European cluster. As I commented during the call, during the first part, a slight improvement on the Greater China cluster to a mid-single-digit negative. I have to say that in the Americas, U.S. continues to remain very strong, but also Latam. This is driven by, I would say, more than by traffic.
Speaker #2: And I leave Luca to elaborate more on if he has a comment then on wholesale Tom Brown, and for performance I leave to immediately directly to Gianluca.
Speaker #2: So on by region . So what we have seen in the third quarter is a continued solid growth by cluster of double digit growth of the US and the European cluster .
Speaker #2: And as a I commented during the call , during the first part , a slight improvement on the GCR cluster to a mid-single digit negative .
Speaker #2: I have to say that in the Americas , US continue to remain very strong , but also Latam . This is driven by , I would say , more than by traffic .
Speaker #2: Of course, traffic in our store is always strong, but really due to the very strong work and good work that our people are doing.
Paola Durante: Of course, traffic in our store is always, but really by the very strong work, good work that our people are doing, and of course, the very well-acceptance of our collections and the product because everything starts from there. I have to say, I would say the same in Europe. Of course, in Europe, you have the Middle East that continues to remain very strong, but even Europe, excluding the Middle East, has done very well in the quarter.
Speaker #2: And of course the very well acceptance of our collections and the product , because everything starts from there . And I have to say , I would say the same in Europe , of course , in Europe you have the East that continues to remain very strong .
Speaker #2: But even Europe, excluding the Middle East, has done very well in the quarter.
Speaker #3: In terms of all sales , I think that most of the effort has been done in terms of selection , especially on the Tom Brown side , if I recall , what is the which are the numbers of this year ?
Gianluca Tagliabue: In terms of wholesale, I think that most of the effort has been done in terms of selection, especially on the Thom Browne side. If I recall what is, which are the numbers of this year, we don't set numbers for next year, but we start from this year having Thom Browne declining 35% and mid-teens for ZEGNA and around 10% negative on TOM FORD FASHION. This is the result of different things. The conversions that we have been doing will continue next year selectively, of course, depending, for instance, with some U.S. wholesalers, we are debating location by location. This will continue, probably to a lower extent because most of the conversions we have already done, but the conversion trend will continue as long as we will find the opportunity to do it. There is still a selection of distribution on iconic items for ZEGNA.
Speaker #3: We don't set numbers for next year , but we start from the year having Tom Brown declining 35% and mid-single digit mid-teens . Sorry , mid-teens for Zegna and around 10% negative on Tom for this is the result of different things .
Speaker #3: The conversions that we are doing will continue next year selectively. Of course, this will depend on, for instance, some U.S. sellers. We are debating this location by location.
Speaker #3: This will continue, probably to a lower extent, because most of the conversions we have already done. But the conversion trend will continue as long as we find the opportunities to do it.
Speaker #3: There is still a selection of distribution on iconic items for Xenia . We are pretty much happy with the distribution at this point of through all sales , but definitely we will continue limit as much as possible our iconic items that we we would not like to be resolved at discounts or in distribution markets that we we don't want and and Tom Ford minus ten .
Gianluca Tagliabue: We are pretty much happy with the distribution at this point through wholesale, but definitely, we will continue to limit as much as possible our iconic items that we would not like to be resold at discounts or in distribution markets that we don't want. And TOM FORD FASHION minus 10% would be overall, I think the comment for next year, I think, will continue some decline, but to a much lower intensity. That is driven by conversion, driven by the fact that we keep on selecting distribution on Thom Browne, of course, not to the level that we have seen in the last two years. I think that we will see a much more muted decline still for next year of wholesale channel.
Speaker #3: Would be . Overall , I think the comment for next year I think will continue some decline . But to a much lower intensity .
Speaker #3: That is my that that driven by conversion , driven by the fact that we keep on selecting distribution on Tom Brown . Of course not to the level that we have seen in the last two years .
Speaker #3: So, I think that we will see a much more muted decline still for next year of the wholesale channel.
Speaker #2: Okay . For fashion , the last one overall performance and comment I don't know . I don't know if there was something specific but the the performance as we said , the quarter has benefited from several factors .
Paola Durante: Okay. TOM FORD FASHION, the last one. Overall performance, any comment? I don't know, Adrian, if there was something specific. The performance, as we said, the quarter has benefited from several factors, but for sure, the good acceptance and the good reaction of our clients of the first Haider Ackermann collection for TOM FORD FASHION, that I remind you, is the one that showed in Paris in March, but touched the floor in the stores as usual a few months after. It was introduced at the end of August, and this creates, in particular in the US, but in reality, also in Europe, across all the regions, a very nice vibe. Our clients, customers, loyal, so existing customers, but also new ones, came and bought and purchased the collection. This has been for sure a positive factor.
Speaker #2: But for sure the good acceptance and the good reaction of our clients of the first I , the collection for Tom Ford , I , I remind you , is the one that showed the in Paris in March .
Speaker #2: But the floor in the stores is as usual a few months after. So it was introduced at the end of August, and this created, in particular in the U.S., but in reality also in Europe.
Speaker #2: A across all the regions , very nice vibe and so our , our clients , customers so existing class customers but also new one and came and and bought and patches the collection .
Speaker #2: So this has been for sure a a a positive factor . But the second one is the openings that we have done some nice openings so that are doing that are also providing good , good revenues , results and as , as I was saying , of course , in the past months we have invested in the platform in the people , in starting to create a CRM system .
Paola Durante: The second one is the openings that we have done, some nice openings that are doing that are also providing good revenue results. As I was saying, of course, in the past month, we have invested in the platform, in the people, in starting to create a CRM system. We are still at the beginning, but all this step by step has done some and is doing some results. Still at the beginning, as we said, Gianluca.
Speaker #2: So we are still at the beginning, but all this step by step is done. Some results are coming in, and we are seeing some progress. Still at the beginning, as we said.
Speaker #3: Just add one point: You have seen DTC in Q3 at plus 16%. We want to clarify there is a space, but there is also a substantial component which gives us comfort because we are starting to see traction on assortment.
Gianluca Tagliabue: Just to add one point, you have seen DTC in Q3 at plus 16%. We want to clearly, there is a space, but there is also a substantial comp component, which gives us comfort because we start seeing traction on assortment planning, on training of the people, the people on the field, the retail management. We see the growth of DTC is not just space. There is an important comp component. On the wholesale, linking to what we said before, the decline, for instance, there is the impact of a few conversions. I name the most important ones. Last year, in Q3 of last year, we converted SAS Women. We converted Arroz Men. We converted Puerto Banus in Spain. Some part of the new comp comes also from this conversion of wholesale locations that have been redirected into DOS, Directly Operated Store.
Speaker #3: Planning on the training of the people, the people on the field, the retail management. So we see that the growth of DTC is not just space.
Speaker #3: There is an important comp component on the wholesale, linking to what we said before the decline. For instance, there is the impact of a few conversions.
Speaker #3: I name the most important ones . Last year in Q3 of last year , we converted Saks women . We converted our men .
Speaker #3: We converted Puerto Banús in Spain, so some part of the new comp comes also from this conversion of wholesale locations that have been redirected into DOS, Directly Operated Stores.
Speaker #3: In terms of geography, we have seen across the board a solid to very strong GCR for the third quarter from a small base, as shown an interesting sequential improvement.
Gianluca Tagliabue: In terms of geography, we have seen across the board, US solid, EMEA very strong. GCR for the small DOS from a small base has shown an interesting sequential improvement. We report positive comp wholesale affected by these three important conversions and good performance in the major regions for the brand.
Speaker #3: So we are we report positive comp wholesale affected by these three important conversions and good performance in the in the in the major regions for for the brand .
Speaker #5: Yeah, that is very helpful. Thank you very much.
[Analyst]: Yeah, that is very helpful. Thank you very much.
Speaker #6: Much .
Speaker #2: Thank you, thank you. The next one, operator.
Paola Durante: Thank you. Thank you. The next one, operator.
Speaker #1: Thank you. Our next question comes from Oliver Chen with TD Cohen. Please go ahead, Oliver.
Paola Durante: Thank you. Our next question comes from Oliver Chen with TD Cowen. Please go ahead, Oliver.
Speaker #7: Hi . This is Nicholas . Sylvia on for Oliver . Thank you both for taking the time . John Luca and Paula , I know you just touched on the wholesale distribution .
[Analyst]: Hi. This is Nicole Silvia on for Oliver. Thank you both for taking the time, Gianluca and Paola. I know you just touched on the wholesale distribution. Continuing on with channel distribution, could you comment more on how ZEGNA is leveraging the direct-to-consumer network to drive growth? The second part is, you know, with FX impact, I agree that's definitely a headwind that we've seen across the sector. Could you touch more on how you're offsetting those costs and currency pressures that are posing a headwind in light of the recent tariff impacts that you mentioned? Thank you both so much.
Speaker #7: So continuing on with channel distribution , could you comment more on how Xenia is leveraging the direct to consumer network to drive growth and then a second part is with FX impact .
Speaker #7: I agree, that's definitely a headwind that we've seen across the sector. Could you touch more on how you're offsetting those costs and currency pressures that are posing a headwind in light of the recent tariff impacts that you mentioned?
Speaker #7: Thank you both so much.
Speaker #2: Sorry, we need to ask you to repeat the two questions. The reason is that we couldn't really get the line very clearly. If you could repeat either one or the other, that would be appreciated.
Paola Durante: Sorry, we need to ask you to repeat the two questions because we couldn't really get the line very clearly. If you can repeat maybe one and the other. Sorry for asking, but really, there was a lot of noise.
Speaker #2: Sorry for asking, but really, there was a lot of noise.
Speaker #7: Of course. Is this better?
[Analyst]: Of course. Is this better?
Speaker #3: Much better .
Gianluca Tagliabue: Much better.
Speaker #2: Better .
Speaker #8: Yeah .
Paola Durante: Better. Yeah.
Speaker #7: Excellent . So , hi . Starting over here , this is Nicholas Sylvia on for Oliver . Thank you both for taking the time .
[Analyst]: Excellent. Hi. This is Nicole Silvia on for Oliver. Thank you both for taking the time, Gianluca and Paola. I know you touched on wholesale. Continuing on with channel distribution, could you comment more on how ZEGNA is leveraging the direct-to-consumer network to drive growth? The second part I have here is with FX, I agree that's definitely a headwind we've seen across the sector. Could you touch more on offsetting those costs and currency pressures that are posing a headwind in light of the recent tariff impacts? Thank you both so much.
Speaker #7: Gianluca and Paola , I know you touched on wholesale , so continuing on with channel distribution , could you comment more on how Xenia is leveraging the direct to consumer network to drive growth ?
Speaker #7: And then just a second part I have here is with FX. I agree, that's definitely a headwind. We've seen it across the sector.
Speaker #7: Could you touch more on offsetting those costs and currency pressures that are posing a headwind in light of the recent tariff impacts? Thank you both so much.
Speaker #2: Okay , so the first one is in particular on Xenia DTC network . And the evolution . If I got it correctly . And the second one is regarding forex and how given the forex doing how we are offsetting the cost of higher tariff increase in the US .
Paola Durante: Okay. The first one is, in particular, on ZEGNA direct-to-consumer network and the evolution, if I got it correctly. The second one is regarding Forex and how, given the Forex, how we are offsetting the cost of higher tariff increase in the U.S. I'll leave to Gianluca.
Speaker #2: So, I live to Gianluca.
Speaker #3: We drive positive trend on the on the retail side , I think I give you some some . Some comments distinctly from boutique and outlet .
Gianluca Tagliabue: We drive a positive trend on the retail side. I think I give you some comments distinctly from boutique and outlet. I start from outlet, which is probably the easiest one. That is not a driver of growth. It's on the opposite. It's a channel that we keep shrinking as soon as we see the possibility to do it. The driver there is, of course, the sell-through of the season. Our internal KPI that we monitor carefully is sell-through at full price because ZEGNA doesn't do any bargain at this point anymore. As soon as we have a good level of inventory on end from leftovers, we reduce the outlet channels. That is a driver of non-growth within the retail environment. On the full-price boutique, yes, we have this year, the number that you have seen, it's mostly comp.
Speaker #3: So I start from outlet which is probably the easiest one . That is not a driver of growth . It's on the opposite is a is a channel that we keep shrinking , shrinking as soon as we see the possibility to do it .
Speaker #3: And the driver there is of course , the cell through of the season . Of course , we are our internal KPI that we monitor carefully is sell through at full price , because Xenia doesn't do any bargain at this point anymore .
Speaker #3: So as soon as we have a good level of inventory on hand from leftovers, we reduce the outlet channels. This is a driver of non-growth within the retail environment.
Speaker #3: On the full price boutique . Yes , we have this year the number that you have seen . It's mostly comp . The first remark .
Gianluca Tagliabue: First, to remark that the number that we have reported, it's 7.4%. It's a growth organic. It's, I would say, almost entirely comp. What is the driver behind the comp? It's conversion. We need to work, and that's the CRM machine that is behind the scenes. We cannot enjoy in this moment in some areas of our market traffic. We need to generate ourselves the traffic. The outreach is laser-focused on bringing clients in, preparing the appointment with the selection for them. This is the driver behind a good improving conversion trend. This mitigates, in terms of number of tickets, the decline coming from traffic. On the other side, the value of the tickets is increasing.
Speaker #8: That .
Speaker #3: The number that .
Speaker #8: We have .
Speaker #3: Reported , it's 7.4% . It's a growth organic , it's I would say almost entirely from and and what is the driver behind the comp .
Speaker #3: It's conversion, of course, we need to work, and that's the CRM machine that is behind the scenes. Of course, we cannot enjoy this moment.
Speaker #3: In some areas of our market traffic . So we need to generate ourselves the traffic . So the outrage is laser focused on bringing clients in , preparing the appointment with the selection for them .
Speaker #3: And this is the driver behind a good improving conversion trend . On the other side . So this mitigates in terms of number of tickets mitigates the decline coming from traffic .
Speaker #3: On the other side , the value of the tickets is increasing . Its increasing through a because we are elevating the offer in every season , whether it's value , whether it's personalization , whether it's .
Gianluca Tagliabue: It's increasing through AUR because we are elevating the offer in every season, whether it's Vellus Arum, whether it's personalization, whether it's second skin, whether it's new leather outdoor pieces that are coming out, or the enlarged collection of Conte jackets. AUR and conversion are the two numbers that are driving up the comp for this year. Space so far has not been a point. I think that we still have some opportunities in terms of space going forward. For instance, ZEGNA next year is expanding the network in the U.S., which is still, in terms of distribution, not fully exploited. We will have, at the end of the year, for instance, a location in Troy, Michigan. We will have next year San Diego. We will have Scottsdale. We will remodel Ballarat. There are still interesting opportunities in the U.S., not as much in China, as we said.
Speaker #3: Second skin , whether it's new . Leather out or pieces that are coming out or the enlarged collection of jackets . So AQR and conversion are the two numbers that are driving up the the the comp for this year .
Speaker #3: SpaceX so far has not been a point . I think that we still have some opportunities in terms of space going forward . For instance , Xenia next year is expanding the network in US , which is still in terms of distribution , it's still not fully exploited .
Speaker #3: So we will have at the end of the year , for instance , a location in Troy , Michigan , we will have next year .
Speaker #3: San Diego. We will have Scottsdale. We will remodel. So there are still interesting opportunities in the U.S. Not as much in China as we said.
Speaker #3: It's probably the other way around where we will try to consolidate. So, SpaceX might be a minor factor. Therefore, we need to help ourselves with comp, as we have done so far.
Gianluca Tagliabue: It's probably the other way around where we will try to consolidate. Space might be a minor factor. We need to help ourselves with comp, as we have done so far. That is the algorithm and the logic behind our performance on DTC. In terms of FX, how we protect ourselves, the mechanic is always we fix—the logic is always that we fix the currency for the price list months in advance. We defend that price list. That's why we have now, at this point, during—we did the selling campaign of spring 2026 in June of this year. We set the FX at that time, and now we are basically fully covered at a good currency rate.
Speaker #3: That is that is the algorithm and the logic behind our performance on DTC . in terms of effects , how we protect ourselves .
Speaker #3: But the mechanic is always 'we.' We fix. The logic is always that we fix the currency for the price list months in advance.
Speaker #3: We we defend that price list . So that's why we have now at this point during we did the selling campaign of spring 26 was in June of this year .
Speaker #3: We set the effects at that time, and now we are basically fully covered. And the good, good currency rate.
Speaker #8: Which means that we protect.
Paola Durante: Which means that we protect the selling margin.
Speaker #2: The Celine margin .
Speaker #3: Will take the margin . Then the rest is is protected because you have opex and you have you have the revenues offsetting . So of course , as I said , now we need to add into the fall winter 26 .
Gianluca Tagliabue: We protect the selling margin. The rest is self-protected because you have OpEx and you have the revenues offsetting. As I said, now we need to add into the full-winter 2026, our mindset is always to stay in a low mid-single-digit growth of prices. We need to consider if this is enough everywhere. Probably there is also the tariff component in the U.S., which might bring us a bit a touch up upwards. Definitely, these are the mechanics that we use to defend ourselves in an environment of currencies.
Speaker #3: Our mindset is always to stay in a low mid single-digit growth of prices. We need to consider if this is enough everywhere.
Speaker #3: Probably there is also the tariff component in the U.S., which might bring us a bit of a touch up upwards, but definitely these are the mechanics that we use to defend ourselves in an environment of currencies.
Speaker #8: It's nice. It's nice.
Paola Durante: Yeah, it's nice. It's nice also to underline that we did in September this year some price increase because of the tariffs, as you know. The reaction from the customers were very positive. There was no, I would say, negative reaction. Of course, everything that we do in terms of price increase has to be, you know, always an elaboration and an analysis done by the merchandising team looking at the full-price collection and protecting, you know, the important price point of every collection. This is part of the job that Gianluca Tagliabue, Gildo Zegna, and the merchandise team do every season, every collection. I don't know if we answered.
Speaker #2: Also, to underline that we did in September this year some very simple changes because of the tariff. As you know, the reaction from the customers was very positive.
Speaker #2: So the , the there was no , I would say negative reaction . Of course , everything that we , we do in terms of price increase has to be , you know , always is an elaboration and an analysis done by the merchandising team looking at the full price collection and protecting , you know , the important price point of every collection .
Speaker #2: This is part of the job that Gianluca , Gildo and the merchandise team does do every , every season , every collection . I don't know if we answered .
Speaker #7: Yes. That's very helpful. Thank you both.
[Analyst]: Yes, that's very helpful. Thank you both.
Speaker #2: Thank you . Thank you so much . Sorry for asking again . Next one . Operator .
Paola Durante: Thank you. Thank you so much. Sorry for asking again. Next one, operator.
Speaker #1: Thank you. Our next question comes from Chris Huang with UBS. Chris, please go ahead.
Paola Durante: Thank you. Our next question comes from Chris Wang with UBS. Chris, please go ahead.
Speaker #9: Hello . Hi . Thanks for taking my questions . I have three . The first one , just to follow up on the Q4 current trading commentary .
[Analyst]: Hello. Hi. Thanks for taking my questions. I have three. The first one, just to follow up on the Q4 current trading commentary. If I look at your group DTC channel performance as a whole, the improvement in Q3 pretty much was in line with what your comps would have suggested. In light of the very impressive Q4 you had last year, and Gianluca, I think your previous comments around trends so far unchanged in the fourth quarter, would it be possible that perhaps, you know, in Q4, we continue to see a high single-digit DTC growth at a group level? That's the first one. Secondly, on cluster, I just wanted to clarify a little bit here on the Chinese consumers if it's down mid-single digit or a high single digit.
Speaker #9: If I look at your Group DTC channel performance as a whole, the improvement in Q3 pretty much was in line with what your comps would have suggested.
Speaker #9: So in light of the very impressive Q4 , you had last year and I think your previous comments around trend so far unchanged in the fourth quarter , would it be possible that perhaps , you know , in Q4 , we continue to see a high single digit DTC growth at group level ?
Speaker #9: So that's the first one. Secondly, on cluster, I just wanted to clarify a little bit here on the Chinese consumers.
Speaker #9: If it's down mid single digit or high single digit and related to that . So it seems like the Chinese consumers really accelerated in Q3 when the total DTC is kind of in line .
[Analyst]: Related to that, it seems like the Chinese consumers really accelerated in Q3 when the total ZEGNA DTC is kind of in line. What other nationalities are probably moderating or normalizing a little bit if you can give some color on that? Last but not least, on H2 margins, I think on the previous call, H1 call, you commented that for the full year, you're expecting the ZEGNA segment margins to land between 13% and 14%. If I heard correctly, the 7% growth in DTC in Q3, you said, was mostly driven by comps. That is quite a good number to really see some operating levers. I'm just wondering if there's any update on the margin expectations you can give us for the ZEGNA segment for 2025. Thank you.
Speaker #9: So what other nationalities are probably moderating or normalizing a little bit . If you can give some color on that . And last but not least , on H2 margins , I think on the previous call , H1 call , you commented that for the full year , you're expecting the segment margins to land between 13 and 14% .
Speaker #9: But if I heard correctly , the 7% growth in DTC in Q3 , you said was mostly driven by comps . So that that is quite a good number to to really see some operating leverage .
Speaker #9: So, I'm just wondering if there's any update on the margin expectations you can give us for this segment for 2025? Thank you.
Speaker #2: Okay . Thank you for the three questions . So the first one is on the follow up on Q3 . And and in particular , if and this is a question that you directed rightly to Gianluca , if we can deliver on a high single digit Q4 growth for DTC , the second one is on the Chinese cluster .
Paola Durante: Okay. Chowkri, thank you for the three questions. The first one is on the follow-up on Q3, in particular, if, and this is a question that you direct rightly to Gianluca, if we can deliver on a high single-digit Q4 growth for DTC. The second one is on the Chinese cluster, and then we go after. I'll ask Gianluca to comment on the first one in the meantime.
Speaker #2: And then we go after I ask you to comment. The first one. In the meantime.
Speaker #3: So, from the Chinese cluster, the Chinese cluster has seen high single-digit negatives. Additionally, we have observed a stronger decline in the Chinese market abroad.
Gianluca Tagliabue: Start from the Chinese cluster. The Chinese cluster has seen a high single-digit negative, and we have seen a stronger decline on Chinese abroad, although smaller in terms of incidents for us. The decline has been steeper for Chinese buying outside of the Greater China region. Anyway, overall, it's been on the high single-digit environment. In terms of Q4, I don't want to comment on the expectation by channel, by brand, because then it's conceptually, we are trailing not different than what we have seen in Q3. Of course, we need to know that last year we had a solid performance. It will be more challenging. So far, I would say same trend than Q3. If you want to have an indication, I would probably stick, rather than by brand, by geography, I think that the consensus out there today is reasonable.
Speaker #3: Although smaller in terms of incidence for us, the decline is being steeper for Chinese buying outside of the Greater China region. But anyway, overall, it has been in the high single-digit environment.
Speaker #3: Yeah . In terms of Q4 , I don't want to comment on the on the expectation by channel , by brand , because then it's it's conceptually we are trailing not different than what we have seen in Q3 .
Speaker #3: Of course , we need to know that last year we had a solid performance . So it will be more challenging . But so far , so far , I would say same trend than Q3 .
Speaker #3: And if you want to have an indication, I would probably stick rather than by brand by geography. I think that the consensus out there today is reasonable.
Speaker #3: So overall, I think the consensus that is out on our website that we report for full year revenues looks like a good indication.
Gianluca Tagliabue: Overall, I think the consensus that is out on our website that we report for full-year revenues looks a good indication.
Speaker #3: .
Speaker #2: On margin for a full year, Chris was reminding that the comment we made in September was that we were expecting Xenia margin around 1,314%.
Paola Durante: On ZEGNA margin for a full year, Chris was reminding that the comment we made in September that we were expecting a ZEGNA margin around 13%, 14%. Of course, Chris, this was an indication we gave. I don't think this is the place, the moment to comment on margins, but just reminding you that the growth by comp is not something that is coming as a surprise for ZEGNA. It's something that is planned in our expectations and in our numbers. It's absolutely a nice, very important growth, but it's aligned with, or at least following, let's say, our expectations. Maybe a little bit better, but not much. I don't know if we answered, Chris. If you don't have any follow-up, we can go to the next one.
Speaker #2: Of course , Chris , this was an indication we gave . I don't think this is the the the place , the moment to comment on margins , but just reminding you that the the growth by comp is not something that is coming as a surprise for Xenia .
Speaker #2: It's something that is a planned in our expectations and in our numbers . So it's it's absolutely a nice , very important growth .
Speaker #2: But it is aligned with the, or at least the following. Let's say our expectations may be a little bit better, but not much.
Speaker #2: Okay , I don't know if we answered Chris , if you don't have any follow up , we can go to the next one .
Speaker #9: Yeah. Sounds good. Thank you.
[Analyst]: Yeah, sounds good. Thank you.
Speaker #2: Thank you .
Paola Durante: Thank you.
Speaker #1: Thank you. Our next question comes from Chiara Battistini with JP Morgan. Please go ahead.
Paola Durante: Thank you. Our next question comes from Chiara Battistini with JP Morgan. Please go ahead.
Speaker #10: Hello . Thank you very much for taking my questions . I have a couple of follow ups and maybe a curiosity , but first question on on Xenia .
[Analyst]: Hello. Thank you very much for taking my questions. I have a couple of follow-ups and maybe a curiosity. The first question on ZEGNA: if I can follow up asking about the mix, like the price/mix and volumes, and also the evolution for the ZEGNA brands, the ZEGNA brands between the recruitment of new consumers versus returning customers, what you're seeing from that point of view. The second question, a follow-up on TOM FORD FASHION. I was wondering, given all the initiatives in place, the fact that the product under the new designer is ramping up the CRM initiatives and also the ongoing store rollout, is there any reason why we should not be assuming further acceleration sequentially for TOM FORD FASHION into year-end and also into next year from a direct-to-consumer (DTC) perspective? Finally, more of a high-level question.
Speaker #10: If I can follow up, can you provide information about the mix, such as the price mix and volumes? Also, I’m interested in the evolution of the Xenia brand in terms of the recruitment of new consumers versus returning customers.
Speaker #10: What you're seeing from that point of view , the second question , follow up on Tom , for the and I wondering , given all the initiatives in place , the fact that the product under the new designer is ramping up the CRM and also the the ongoing store rollout , are there any reason why we should not be assuming a further acceleration sequentially for for the into year end ?
Speaker #10: And also into next year? From a perspective, and then finally more of a high-level question. There's been a lot of debate in the market lately about the beauty of the new fashion designers at different houses.
[Analyst]: There's been a lot of debate in the market lately about the debut of the new fashion designers at different houses, and this potentially reinvigorating and reigniting a desire for bolder fashion and more outdated fashion, potentially penalizing more understated brands. I was wondering if you could share your views about this ongoing debate that there is in the market at the moment. Thank you.
Speaker #10: And these potentially reinvigorating and reigniting desire for bolder fashion and more outdated fashion, so potentially penalizing more understated brands. So I was wondering if you could share your views about this ongoing debate that there is in the market at the moment?
Speaker #10: Thank you .
Speaker #2: Thank you . Chiara . Ciao . Okay . The price mix on the price . Price mix volume evolution for Xenia . It's there is okay .
Paola Durante: Thank you, Chiara. Ciao. Okay. On the price mix, on the price-price mix volume evolution for ZEGNA. Okay. Price mix is clearly very important. I ask Gianluca if he wants to comment more also on the returning customers. On the TOM FORD FASHION, the further acceleration, why not? Let's ask Gianluca. On the third one, sorry, Chiara, the theme and the debate is, if I understood well, but I'm not sure, how that designer becoming even more important for the brand or that there were many changes in the designer. Sorry. Alicia is looking at me and saying, "No, you don't understand anything." Sorry.
Speaker #2: Price mix is clearly very important . But I asked if he wants to to comment more . Also on the returning customers on the on for the further acceleration .
Speaker #2: Why not ? Let's let's ask Gianluca and on on on the third one . Sorry . For the theme and the debate is if I understood well , but I'm not sure how that designer are becoming even more important for the brand or that there was a many changes in the design .
Speaker #2: Sorry , I'm a literally is looking at me and say no , you don't understand anything . So sorry if you can .
Paola Durante: Ciao, Alicia too.
Speaker #10: No, I was wondering because there has been a lot of renewed enthusiasm around potential fashion trends and a reignited appetite for bolder fashion, as some of the new designers or designers that have moved.
[Analyst]: I was wondering because as there's been a lot of renewed enthusiasm around potential fashion trends and reigniting appetite for bolder fashion as some of the new designers or designers that have moved out. Yeah?
Speaker #2: House .
Speaker #10: Yeah , yeah .
Paola Durante: Thank you.
Speaker #2: Get it, get it. Thank you.
Speaker #10: Thank you .
[Analyst]: Thank you.
Speaker #3: Sorry, I start from the Xenia. I confirm that price mix is the biggest driver; mainly, comp is coming from price and mix.
Gianluca Tagliabue: I start from the ZEGNA. I confirm that price/mix is the biggest driver. Mainly, comp is coming from price and mix. Of course, there is the like-for-like price increase. As I said, the mix component of elevation of the content of the collection is the other component. Price/mix is the major driver of comp. In terms of returning, recruiting new, we are seeing good traction in new clients, especially on retaining new clients. Of course, there's always someone coming in walking. The point is whether you create stickiness. You create stickiness that you bring them in, possibly through Triple Stitch, possibly through knitwear. Little by little, some of those go away, some return. The ones that are returning are our focus, and we see good numbers over returning new clients. Especially, the objective is elevating these clients. What we are always looking at is the spending by cluster.
Speaker #3: Of course , there is the like for like price increase . And as I said , the mix component of elevation of the content of the collection is the other component .
Speaker #3: So price mix is the major driver of comp in terms of returning , recruiting , new . We are seeing a a good traction in in new clients , especially on retaining new clients .
Speaker #3: Of course , there is always someone coming in . Walking . The point is , whether you create stickiness , you create stickiness that you bring them in , possibly through triple stitch , possibly through a knitwear , and then little by little , some of those go away , some return .
Speaker #3: The ones that are returning are our focus , and we see good numbers over returning new clients . And especially the the objective is elevating this client .
Speaker #3: So, what we are always looking at is the spending by cluster. We try to identify the type of product that they buy.
Gianluca Tagliabue: We try to identify by the type of product that they buy if they have potential. We intensify our activity around them in order to bring them above the $10,000, above the $25,000 threshold, and finally, above the $50,000 threshold. That is our ZEGNA friend territory. Of course, the numbers, we are growing very well on the clusters above $25,000. On the lower spending, we see good traction of returning new, especially people that are coming in, maybe coming back to buy a second pair of Triple Stitch or starting to buy a more broad total look. I think it's a healthy proposition of clients staying, clients entering, and staying with us for a longer time.
Speaker #3: If they are potential. And we intensify our activity around them in order to bring them above the 10,000, above the 25,000 threshold, and finally above the 50,000 threshold.
Speaker #3: That is our Xenia friend territory. So, of course, the numbers we are growing very well on the clusters above 25,000 on the lower spending.
Speaker #3: We see a good traction of returning . New , especially people that are coming in , maybe coming back to buy a second pair of triple stitch or buying starting to buy a more broader total look .
Speaker #3: So I think it's a healthy proposition of clients staying, clients entering, and staying with us for a longer time.
Speaker #2: Tom , for the fashion and the Q4 why not further acceleration ? Okay , I asked you to answer , but I just , you know , remind you two things .
Paola Durante: On TOM FORD FASHION and the Q4, why not further acceleration? Okay. I asked Gianluca to answer, but I just remind you two things. One, of course, there is always a sort of wow effect when you have a new collection. This is something that we want to continue to keep. The first time, normally, it's a little bit more sound or strong. This is normal. It happens like this. The second one is also for TOM FORD FASHION. The Q4 last year was a little bit more dense in terms of performance. There is also for TOM FORD FASHION a basal comparison effect. I leave Gianluca if any further comments also on what we are doing on TOM FORD FASHION.
Speaker #2: One , of course , there is always a sort of wow effect when you have a new collection . And this is something that we want to continue to keep it .
Speaker #2: But the first time , normally it's a little bit more sound or a stronger . This is normal . It happens like this .
Speaker #2: But the second one is also for Tom Ford. The Q4 last year was a little bit more dense in terms of performance.
Speaker #2: So there is also also for Tom Ford fashion , a , a base of comparison effect . And I leave Gianluca if any further comments also on what we are doing on Tom Ford , the fashion .
Speaker #3: I think that the solid double-digit growth, like we did in Q3, is something that we are happy with, especially because it's partially generated by.
Gianluca Tagliabue: I think that the solid double-digit growth, like we did in Q3, is something that we are happy with, especially because it's partially generated by comp.
Speaker #3: Com . Yeah . I think that . That , that run rate , I think it's something that we , we are definitely pleased with what we are doing is , is in injecting into the , the machine of Tom Tom Ford some of the lessons learned .
Paola Durante: Yeah, very good point.
Gianluca Tagliabue: I think that run rate, I think it's something that we are definitely pleased with. What we are doing is injecting into the machine of TOM FORD FASHION some of the lessons learned we have done with ZEGNA. For instance, we are injecting more and more CRM logic and approach. I think that the team is with the logic of TOM FORD FASHION, but trying to intensify the drops of product in order to create the reason why they call the clients back. I think that in TOM FORD FASHION, as I called out on ZEGNA, we see the opportunity to increase the presence in the successful U.S. market. Next year, TOM FORD FASHION will open stores in the U.S. We are also, I think we mentioned last time, working on a store in Paris. There are different arrows for TOM FORD FASHION distribution.
Speaker #3: We have done with Xenia . For instance , we are injecting more and more CRM logic and approach . I think that the team is with with the logic of Tom Ford , but trying to intensify the drops of product in order to create the reason why they call the clients back .
Speaker #3: I think that in Tom Ford , as we as I called out on Xenia , we have we see the opportunity to increase the presence in the successful US market .
Speaker #3: So, next year, Tom Ford will open stores in the U.S. We are also, I think we mentioned last time, we are working on storing Paris.
Speaker #3: So, there are different arrows for Tom Ford distribution in terms of assortment. The collection team is working hard on the women's side.
Gianluca Tagliabue: In terms of assortment, the collection, the team is working hard on the women's side. That is the biggest opportunity, both on the daywear as well as on shoes and handbags. Those are the areas of opportunity. The distribution, as I said, notably on the Western world. There is, I think, some mechanics in terms of merchandising, in terms of CRM that we are injecting, cross-fertilizing across the different brands.
Speaker #3: That is the biggest opportunity both both on the daywear as well as on . Shoes and handbags . So those are the areas of opportunity , the distribution , as I said , notably on the Western world , and there is , I think , some mechanics in terms of merchandising , in terms of CRM , that we are injecting cross-fertilizing among the across the different brands .
Speaker #3: .
Speaker #2: On the third question, I started giving my view, but of course this would be better off if Gedo would have been here.
Paola Durante: On the third question, Chiara, I start giving my view, but of course, this would be better off if Gildo would have been here. Next time, you can ask him as well. Of course, Gianluca will also give his own view. This is a debate that we are. In terms of, yeah, fashion, I know people like to talk about quiet luxury, but fashion, and I think the reality is that innovation is what clients and what the clients want. Innovation has to be coherent with the brand's DNA. ZEGNA is an innovative brand. We innovate in terms of garments. We innovate in terms of style. As also our Creative Director explains, and actually, there was an interview yesterday on a newspaper, the innovation comes always taking in consideration what was presented the season before.
Speaker #2: But the next time you can ask him as well . And of course , I will also give you his own view . This is a debate that we are in terms of .
Speaker #2: Yeah , fashion . Well , I know people like to talk about luxury , but fashion and and I think the reality is that innovation is what clients and what the clients want .
Speaker #2: Innovation has to be coherent with the brand's DNA . So Xenia is an innovative brand . We innovate in terms of garments . We innovate in terms of size , but as also our creative director explains .
Speaker #2: And actually, there was an interview yesterday in a newspaper. The Innovation Council always takes into consideration what was presented the season before.
Speaker #2: So it's not changing everything, but it has to grow within the DNA and within, you know, the legacy of the brand.
Paola Durante: It's not changing everything, but it has to grow within the DNA and within the legacy of the brand. By doing this, you create a stronger brand, but also something new for the clients. I don't think there is, you know, clients don't want to buy always the same things. I don't think so, but they want to buy something that is resonant, that has a meaning behind, that has something that goes just is not only a nice garment, but it means something because of the quality, because of how it's made, because of the values of the brands. This is what I think is true today as much as in the past, maybe not always, but in many periods of the history of the sector.
Speaker #2: And by doing this , you create a stronger brand . But also something new for the clients . So I don't think there is , you know , clients don't want to buy always the same things .
Speaker #2: I don't think so . But they want to buy something that is reasonable , that has a meaning behind , that has something that goes just is not only a nice garment , but it means something because of the quality , because of how it's made , because of the values of the brands .
Speaker #2: And this is what I think is true today . As much as in the past . Maybe not always , but in , in , in many periods of , of of the history of the sector .
Speaker #2: This is my view . But sorry . Okay . I cannot talk for an our CEO here and I , I actually would be very happy to have him to have the same question presented to him in in February for the full year results .
Paola Durante: This is my view, but sorry, I cannot talk for our CEO here, and I actually would be very happy to have him or to have the same question presented to him in February for the full-year results. I don't know if Gianluca has.
Speaker #2: I don't know if Gianluca.
Speaker #3: I think .
Speaker #2: Well , okay . Thank you . Chiara . I don't know if there are questions . Gracia . I don't know if there .
Gianluca Tagliabue: Nothing to add.
Paola Durante: Okay. Thank you, Chiara. I don't know if there are any other questions.
Gianluca Tagliabue: Thank you.
Paola Durante: I don't know if there is.
Speaker #1: Is our next question , our next question comes from Daria . Natalia with Bank of America . Please go ahead .
Paola Durante: Our next question comes from Daria Nasledzieva with Bank of America. Please go ahead.
Speaker #11: Hi . Hi , everyone . This is Daria from Bank of America . And thank you for taking my questions . I have two quick ones actually , is there any way you could help us quantify the impact of Hydra's new collection on the acceleration this quarter , given you said that there is the initial wow effect that exists , and how should we be thinking about the pace of product rollout for next year as percentage of revenues for the brand and my next one , could you please comment on your thoughts about full year Ebit consensus as well ?
[Analyst]: Hi, everyone. This is Daria from Bank of America, and thank you for taking my questions. I have two quick ones, actually. Is there any way you could help us quantify the impact of Haider's new collection on the acceleration this quarter, given you said that there is the initial wow effect that exists? How should we be thinking about the pace of product rollout for next year as % of revenues for the brand? My next one, could you please comment on your thoughts about full-year EBIT consensus as well, like you normally do? I know you commented on revenues, but what about profitability? Thank you.
Speaker #11: Like you normally do ? I know you commented on revenues , but what about profitability ? Thank you . .
Speaker #12: Thanks .
Speaker #2: Okay , ciao . Yes , thank you for the quick . The two follow ups . So in terms of quantification of either in the acceleration of compensation , I would I mean , I live to give you some qualitative , but and I think it's something that we , we will repeat what we said .
Paola Durante: Okay. Ciao Dasha. Thank you for the quick two follow-ups. In terms of quantification of either in the acceleration of TOM FORD FASHION, I would leave Gianluca to give you some qualitative, and I think it's something that we will repeat what we said. I don't think there is a, not a way, but clearly, yes, there is a wow effect. Haider is designing the collection of also the next one. Plus, it's not only there. As we were saying, it's a, let's say, a work together with having better people in stores, having better instruments in terms of CRM, having a better collection, not only the Haider one, but also the one that is, we call it pre, but is not the show one.
Speaker #2: But no I , I don't think there is a not not a way but clearly yes , there is a word fact , but there is a designing , you know , the collection of also the next one and , and plus is not only there is a as as we were saying is a , let's say a work together with having better people in stores , having better instruments in terms of CRM , having better collection , not only the either one , but also , you know , the , the , the one that is , we call it three , but is not the show one .
Speaker #2: So it's it's having better merchandise in store . So , you know , being better in , in buying for the store . So it's and also the , the , the marketing and the visibility effect that the collection designed by us as , as as created .
Paola Durante: It's having better merchandise in store, being better in buying for the store, and also the marketing and the visibility effect that the collection designed by Haider has created. It's a mix of.
Speaker #2: So it's a mix of , of of everything . But I leave to comment a little bit more .
Paola Durante: Everything, yeah. I leave Gianluca to comment a little bit more.
Speaker #3: Staff to identify what is the the specific driver coming from the either collection . Let's remember that is is part was mostly on the winter side that came through the quarter .
Paola Durante: It's tough to identify what is the specific driver coming from either collection. Let's remember that this part was mostly on the winter side that came through the quarter, not at the beginning of the quarter. There has definitely been a part, this part was also the collection that was before the drop of the show collection that came, I think it was around.
Speaker #3: So not at the beginning of the quarter . So there has been definitely part was either part was also the collection that was before the drop of the show collection that came .
Speaker #3: I think it was around .
Speaker #2: It was the June , June , July , July . Yeah .
Paola Durante: It was the June, July, yeah.
Speaker #3: I fell in the fall, but the collection.
Paola Durante: June, July, the fall, but the collection of.
Speaker #2: Of . the either no , either the of both . Yes yes yes sure .
Paola Durante: Oh, yes.
Paola Durante: Either.
Paola Durante: No, end of August. Yes, end of August, yes, sure.
Speaker #3: Of course there is part of the quarter has been impacted by the specific fashion show collection , part was before . So I think it has it has had an effect in terms of curiosity to visit the show , visit the collection of the show .
Paola Durante: Of course, there is part of the quarter that has been impacted by the specific fashion show collection. Part was before. I think it has had an effect in terms of curiosity to visit the show, visit the collection of the show, but it's not only that one, that thing. In terms of consensus, I would reiterate what I said on revenues. I think that the consensus on full year for EBIT looks pretty reasonable. Of course, having always the line of thinking that we still have a couple of months, which for us are still very important. Therefore, it's subject to the performance of the coming two months. We think today that the consensus out there on revenues and EBIT looks pretty reasonable.
Speaker #3: But it's not only that one . That thing in terms of consensus , I would reiterate what I've said on revenues . I think that the consensus on full year for Ebit looks pretty reasonable .
Speaker #3: Of course , having always the , the , the line of thinking that we still have a couple of months , which for us are still very important and therefore it's subject to the performance of the coming two months .
Speaker #3: But we think today that the consensus out there on revenues and Ebit looks pretty reasonable .
Speaker #12: Thank you . And if .
Paola Durante: Thank you. If it's okay, Dasha, we ask if there are other questions. Otherwise.
Speaker #2: If it's okay , Dasha , we ask if there are other questions .
Speaker #13: Otherwise, no, no, no, I.
Gianluca Tagliabue: I think that's good. Can you just comment on the percentage of revenues of new products for TOM FORD FASHION throughout the next year?
Speaker #11: I think that's good. Can you just comment on the percentage of revenues from new products for Tom Ford throughout the next year?
Speaker #2: There are . Yes . So okay , the the drop or the let's say the , the , delivery of Tom Ford , the collections .
Paola Durante: Yes. Okay. The drop or the, let's say, the delivery of TOM FORD FASHION collections. There is a.
Speaker #2: But there is .
Speaker #3: We will have I think on November , November 2nd part of November , the first injection of spring and then the second will be in January .
Paola Durante: We will have, I think, on.
Paola Durante: November.
Paola Durante: November, second part of November, a first injection of spring. The second will be in January. The next will be, I don't remember the specific date, but will be around mid-November, should be the first drop of spring hitting the floors.
Speaker #3: So the next will be , I don't remember the specific date , but will be around mid November . Should be the the first drop of spring is in the floors .
Speaker #2: Yeah . Remember that the first drop is always the no show collection . We call it . But in any case , apart from that is the most important part .
Paola Durante: Yeah. Remember that the first drop is always the non-show collection. We call it pre, but in any case, apart from that, it is the most important part in any case because the collection show for everybody, for any fashion brand, then represents a smaller part, not as small, but a smaller part of the collection for the whole season.
Speaker #2: In any case because the collection show for everybody , for any fashion brand , then represents it's part not as small , but as smaller part of of the collection for the whole season .
Speaker #2: Thank you . And the one that will start . Okay . Thank you . Dasha . If there is the last one , I think because I know there is also another company reporting in Altoona .
Gianluca Tagliabue: Thank you.
Paola Durante: Thank you, Dasha. If there is the last one, I think, because I know there is also another company reporting in half an hour, we might give you the time to prepare if anything. If there are questions, we're very happy to answer.
Speaker #2: So we might give you the time to prepare . If anything . But if there are questions , we're very happy to answer .
Speaker #1: Thank you. We have one final question, which comes from Bhumi Kanabar with Jefferies. Please go ahead.
[Analyst]: Thank you. We have one final question, which comes from Boomi Kanabar with Jefferies. Please go ahead.
Speaker #14: Hi , John Luca , it's Bhumi , just two questions from me , if I may . So number one , could you add a little bit of color on what you're seeing in APAC ?
[Analyst]: Hi. John, Nicole, Paul, and Jay, it's Boomi. Just two questions from me, if I may. Number one, could you add a little bit of color on what you're seeing in APAC ex-China, given the very slight sequential decline there versus H1? I think every other region was an improvement. I know you mentioned Korea and Singapore, but any other regions to call out that didn't go as well? Number two, you mentioned you're happy with EBIT consensus for the year, but I just wanted to ask on gross margin. It seems that given the share of DTC revenues in the nine months, there's a little bit of upside there. If you could comment on that. Thank you.
Speaker #14: Ex-china given the very slight sequential decline there versus H1 , I think every other region was an improvement . I know you mentioned Korea and Singapore , but any other regions to call out that weren't as didn't go as well and then number two , you mentioned you're happy with Ebit consensus for the year , but I just wanted to ask on gross margin , it seems that given the share of DTC revenues in the nine months , there's a little bit of upside there .
Speaker #14: If you could comment on that . Thank you .
Speaker #2: Okay . Gianluca Tagliabue for the color of Napa and DTC and and Ebit consensus . Oh , sorry . Gross margin . Consensus .
Paola Durante: Okay. Leave Gianluca to Boomi for the color on APAC as ex-GPT, ex-GPC, and gross margin consensus, not EBIT.
Speaker #2: Not even .
Speaker #3: On on alpha . I , I would call out of course Singapore is doing well but for them and also we have a new store of Tom Ford that is picking up after the opening .
Paola Durante: On APAC, I would call out, of course, Singapore is doing well, both for ZEGNA and also we have a new store of TOM FORD FASHION that is picking up after the opening. I think we are seeing good momentum there in Singapore overall. In terms of Japan, I would say that we still see softness, especially on Japanese residents buying in Japan, which is the majority for us. We still see some softness. In Korea, we have seen some slight sequential improvement compared to the second quarter. Macau, we are not seeing good momentum. As I said before, Hong Kong, yes. Hong Kong, both traffic and also top line. China, I think I commented already before. I don't have any other major. Australia is not so important for us. In terms of what was the second question?
Speaker #3: So I think we are seeing good momentum there in Singapore overall in terms of Japan , I , I would say that we see a still see softness , especially on Japanese residents buying in Japan , which is the majority for us .
Speaker #3: So we still see some softness in Korea . We have seen some slight sequential improvement compared to to the second quarter . Macau .
Speaker #3: Macau . We are not seeing good momentum . As I said before . On Kong . Yes , Hong Kong , both traffic and also top line and China .
Speaker #3: I think I commented already before so I don't have any other major . Australia is not not not so important for us in terms of what was the second question was .
Speaker #2: The gross margin consensus . So she said that I understand you , you are okay with Ebit consensus . Are you okay ? Also with gross margin consensus , which is that around 67 , 67% .
Paola Durante: The gross margin consensus. She said that I understand you are okay with EBIT consensus. Are you okay also with the gross margin consensus, which is at around 67%?
Speaker #3: I think so , yeah , we are I think that overall the consensus directionally meaningful from what we say , I think if you say we have an upside , I'm happy to hear .
Paola Durante: I think so. Yeah, we are. I think that overall, the consensus directionally is meaningful from what we say. I think if you say we have an upside and make it to year, we will see at the end of the year if you are right. For the time being, I would stick to the consensus.
Speaker #3: We will see at the end of the year . If you are right and for the time being , I would stick to the consensus .
Speaker #15: Perfect .
[Analyst]: Perfect. Great. Thank you.
Speaker #14: Great .
Speaker #2: Thank you. Thank you, Bobby. I don't know if you have any comments; otherwise, I'll leave it to the operator.
Paola Durante: Thank you, Boomi. I don't know if you have any. Otherwise, I leave to the operator.
Speaker #1: Thank you . We have no further questions and so , Paula , back to you .
[Analyst]: Thank you. We have no further questions. Paola, I will hand back to you.
Speaker #2: Okay . So thank you so much for all your questions . We are here at your disposal for any follow up that you have , and we will rejoin together on February 2nd for the full year 2025 .
Paola Durante: Okay. As usual, thank you so much for all your questions. We are here at your disposal for any follow-up that you have. We will rejoin together on February 2, 2025, for the full year 2025 preliminary revenues. Thank you so much for the time you spent with us and speak to you soon. Ciao.
Speaker #2: Preliminary revenues . Thank you so much for the time you spend with us and speak to you soon . Ciao .
[Analyst]: Thank you, everyone, for joining us today. This concludes our call, and you may now disconnect your lines.