Q1 2026 Ermenegildo Zegna NV Earnings Call

April 30, 2026

Operator 2: Zegna Group Q1 2026 revenues call. Please note that today's material and presentation are available under the zegnagroup.com website. Before we begin, we need to point out that the team will make certain forward-looking statements during the call. The Group actual results may be materially different from those expressed or implied by these forward-looking statements. Also, these statements are subject to a number of risks and uncertainties, including those described in our SEC filings. Please refer to the forward-looking statements cautionary statement included at page 2 of today's presentation. I'll now hand over to Paola Durante, Chief of External Relations and Sustainability.

Operator: Zegna Group Q1 2026 revenues call. Please note that today's material and presentation are available under the zegnagroup.com website. Before we begin, we need to point out that the team will make certain forward-looking statements during the call. The Group actual results may be materially different from those expressed or implied by these forward-looking statements. Also, these statements are subject to a number of risks and uncertainties, including those described in our SEC filings. Please refer to the forward-looking statements cautionary statement included at page two of today's presentation. I'll now hand over to Paola Durante, Chief of External Relations and Sustainability.

Speaker #1: The Group’s actual results may be materially different from those expressed or implied by this forward-looking statement. Also, these statements are subject to a number of risks and uncertainties, including those described in our SSC 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, Chief External Relations and Sustainability.

Speaker #1: Thank you. Thank you, Operator. And good morning, good afternoon, everyone. Welcome to our first quarter 2026 revenue call. Today, I'm joined by our Group CEO, Gianluca Tagliabue, who will lead our call shortly.

Paola Durante: Thank you. Thank you, operator, and good morning, good afternoon, everyone. Welcome to our Q1 2026 revenue call. Today, I'm joined by our Group CEO, Gianluca Tagliabue, who will lead our call shortly. I will begin with a brief comment on our Q1 revenues before handing the floor to Gianluca. Let's therefore move directly to page 7 of the presentation. As always, you know, I will comment on organic revenue trend because, you know, they better reflect the underlying business dynamics excluding foreign exchange impacts. In Q1 2026, the group reported EUR 470 million in revenues, which is up 7%, marking a sequential acceleration compared to the previous quarter.

Paola Durante: Thank you. Thank you, operator, and good morning, good afternoon, everyone. Welcome to our Q1 2026 revenue call. Today, I'm joined by our Group CEO, Gianluca Tagliabue, who will lead our call shortly. I will begin with a brief comment on our Q1 revenues before handing the floor to Gianluca. Let's therefore move directly to page seven of the presentation. As always, you know, I will comment on organic revenue trend because, you know, they better reflect the underlying business dynamics excluding foreign exchange impacts. In Q1 2026, the group reported EUR 470 million in revenues, which is up 7%, marking a sequential acceleration compared to the previous quarter.

Speaker #1: I will begin with a brief comment on our Q1 revenues before handing the floor to Gianluca. Let's therefore move directly to page seven of the presentation.

Speaker #1: As always, you know, I will comment on revenue on organic revenue trend because they better reflect the underlying business dynamics, excluding foreign exchange impacts.

Speaker #1: So Q1 20 in Q1 2026, the group reported 470 million in revenues, which is up 7%, marking a sequential acceleration compared to the previous quarter.

Speaker #1: The performance was boosted by the DTC channel, which was up 14% group level, with remarkable results across the three brands: all the three brands.

Paola Durante: The performance was boosted by the DTC channel, which was up 14% at group level, with remarkable results across the three brands, all the three brands. Growth was positive in all regions, led by Americas with a nice 17% growth and a positive G-GCR, Great China Region, at +5%. Let's turn to page 8, where I will focus on the performance by brand. Zegna recorded in the quarter EUR 310 million, up 11% in sequential improvement compared to Q4 last year. This improvement has been driven by a solid DTC performance, which was solid across all regions.

Speaker #1: Gross was positive in no regions, led by Americas, with a nice 77% growth, and a positive GCR, Great China Region, at plus 5%. So let's turn to page eight, where I will focus on the performance by brand.

Speaker #1: Zegna recorded in the quarter €310 million, up 11%, in sequential improvement compared to Q4 last year. And this improvement has been driven by a solid DTC performance, which was solid across all regions.

Speaker #1: Tom Brown, 58 million euro revenues in Q1, reported a 3% decline which is a combination of a strong DTC performance which was up double digit, which has been offset by the contraction in the wholesale channel.

Paola Durante: Thom Browne, EUR 58 million revenues in Q1, reported a 3% decline, which is a combination of a strong DTC performance, which was up double-digit, which has been offsetted by the contraction in the wholesale channel. TOM FORD FASHION, EUR 68 million in revenues, plus 55% organic, also in this case, boosted by DTC. Very quick on the textile, performance was plus 3%, which re-reflect an ongoing soft demand in the sector. I will not focus on other revenues that, you know, are an increasing marginal business, so quarter-on-quarter percentage are not meaningful. Directly on page 9, I will look at the revenues by geographic area. EMEA first. EMEA in the quarter represented 33% of our group revenues, up 1% with DTC solidly up across, sorry, all brands.

Speaker #1: Tom Ford Fashion, 68 million euro in revenues, plus 5% organic also in this case, boosted by DTC. Very quick on the textile, performance was plus 3%, which reflects an ongoing soft demand in the sector.

Speaker #1: I will not focus on other revenues that you know are an increasing marginal business, so quarter-on-quarter percentage are not meaningful. Directly on page nine, I will look at the revenues by geographic area.

Speaker #1: AMEA first. AMEA in the quarter represented 33% of our group revenues, up 1%, with DTC solidly up across all brands. And this strong DTC performance has been counterbalanced by the decline in wholesale.

Paola Durante: This strong DTC performance has been counterbalanced by the decline in wholesale. The Americas, in the quarter, represented 29% of group revenues and recorded, as I already mentioned, a 17% growth in acceleration, boosted by double-digit growth across all the three brands. Greater China region, 26% of group revenues in the quarter and reported a +5% increase with a positive contribution from DTC at all brands. Finally, rest of APAC, which you know for us is a smaller region, 12% of group revenues, has reported 8% growth, driven by particularly Korea and Japan that has been solidly positive across all the three brands. Page 10, not much comments here, just a couple of numbers, if I may.

Speaker #1: The Americas, in the quarter, represented 29% of group revenues, and recorded, as I already mentioned, a 17% growth in acceleration boosted by double-digit growth across all the three brands.

Speaker #1: Greater China Region, 26% of group revenues in the quarter, and reported a positive plus 5% increase, with a positive contribution from DTC at all brands.

Speaker #1: Finally, rest of APAC, which for us is a smaller region—12% of Group revenues—has reported 8% growth, driven by particularly Korea and Japan that have been solidly positive across all the three brands.

Speaker #1: Page 10, not much comments here, just a couple of numbers. If I may, the first one is which I would like to underline. The first one is the DTC channel performance in the first quarter, plus 14% group level.

Paola Durante: The first one is, which I would like to underline, the DTC channel performance in Q1, plus 14% at group level, and the fact that DTC now accounts for 85% of our group branded revenue. As you know, branded revenues exclude the textile and other revenues, which are by nature B2B businesses. Wholesale performance continues to reflect our decision to improve the quality of the network and to protect our icons. Let's now move to Zegna brand, page 11. In Q1 2026, Zegna DTC revenues, which accounted for 88% of brand revenues, sequentially accelerated compared to the previous quarter and posted a 14% organic growth. This performance was led by continued strong double-digit growth in the Americas and in EMEA. EMEA in particular with strong contribution of both tourists and locals.

Speaker #1: And the fact that DTC now accounts for 85% of our group branded revenue. As you know, branded revenues exclude the textile and other revenues, which are by nature B2B businesses.

Speaker #1: Wholesale performance continues to reflect the decision—our decision—to improve the quality of the network and to protect our icons. So, let's now move to the Zegna brand.

Speaker #1: Page 11. In the first quarter of 2026, Zegna DTC revenues, which accounted for 88% of brand revenues, sequentially accelerated compared to the previous quarter and posted a 14% organic growth.

Speaker #1: This performance was led by continued strong double-digit growth in the Americas and in EMEA, EMEA in particular with strong contribution of both tourist and locals.

Speaker #1: Rest of APAC and Greater China Region improved sequentially, with the Chinese cluster turning positive in the quarter. At the end of March, the brand reduced its network by three directly operated stores.

Paola Durante: Rest of APAC and Greater China region improved sequentially with the Chinese cluster that has turned positive in the quarter. At the end of March, the brand reduced its net tool by 3 direct operating stores. Looking at wholesale, the Zegna revenues were down 5%. The performance is a reflection of the decision to reduce the brand exposure to this channel to protect exclusivity and iconicity. Thom Browne, page 12. In Q1 of this year, Thom Browne reported a 20% DTC growth in acceleration also thanks to the successful launch in March of a limited edition of sneakers in collaboration with ASICS. This launch boosted revenues worldwide and drove both existing and new customers to the stores. It has been an important driver of the brand's Q1 performance, DTC performance, but not the only one.

Speaker #1: Looking at wholesale, the Zegna revenues were down 5%. The performance is a reflection of the decision to reduce the brand’s exposure to this channel to protect exclusivity and iconicity.

Speaker #1: Tom Brown, page 12. In the first quarter, of this year, Tom Brown reported a 20% DTC growth in acceleration also thanks to the successful launch in March of a limited edition of sneakers, in collaboration with Asics.

Speaker #1: This launch boosted revenues worldwide and drove both existing and new customers to the stores. It has been an important driver of the brand's Q1 performance, DTC performance, but not the only one.

Speaker #1: In terms of store network, in the quarter, Tom Brown opened two doors. On the wholesale, as you see, the wholesale channel reported a 59% decline, which is a continuous reflection of the decision to tighten control over distribution and enhance the quality of the channel.

Paola Durante: In terms of store network, in the quarter, Thom Browne opened 2 DOS. The wholesale, as you see, the wholesale channel reported a 59% decline, which is a continuous reflection of the decision to tighten control over distribution and enhance the quality of the channel. This performance, though, has been also partially impacted by a different timing in deliveries, with some shifts from Q1 to Q2 2026 versus last year. Therefore, Q1 trend should not be taken as a proxy for full year. As already anticipated in our previous call, we expect that Thom Browne wholesale in 2026 will be down double digit, but less than what we have seen in Q1 this year. TOM FORD FASHION, let's move to page 13.

Speaker #1: This performance, though, has been also partially impacted by a different timing in deliveries, with some shifts from Q1 to Q2 2026 versus last year.

Speaker #1: Therefore, first quarter trend should not be taken as a proxy for full year as already anticipated in our previous call. We expect that Tom Brown wholesale in 2026 will be down double digit, but less than what we have seen in the first quarter.

Speaker #1: This year, Tom Ford Fashion—let's move to page 13. Tom Ford Fashion recorded a plus 9% growth in DTC, which has been driven by a consistent performance across all regions, in particular in the Americas.

Paola Durante: TOM FORD FASHION recorded a +9% growth in DTC, which has been driven by a consistent growth, a consistent performance across all regions, in particular in the Americas, that, you know, is the most important market for the brand, also benefiting from the success of the new spring collection. This good brand, very good brand momentum has also been further supported by the show in Paris, that, you remember, was a successful show in March this year. During the quarter, TOM FORD FASHION opened 2 DOS, so direct operating stores. Wholesale declined 3%, just a normal reflection of our decision to focus on the DTC channel. Page 14, you can see, you can find a summary of the group store network, not much to add.

Speaker #1: That you know is the most important market for the brand. Also benefiting from the success of the new spring collection. This good brand very good brand momentum has also further has been further supported by the show in Paris that you remember was a successful show in March this year.

Speaker #1: During the quarter, Tom Ford Fashion opened two doors, direct operating stores. Wholesale declined 3%, just a normal reflection of our decision to focus on the DTC channel.

Speaker #1: Page 14, you can see you can find a summary of the group store network. So, not much to add. But before leaving the floor to Gianluca, let me today take a moment to highlight our main 2025 sustainability achievements.

Paola Durante: Before leaving the floor to Gianluca, let me today take a moment to highlight our main 2025 sustainability achievements. Full details of that and on our sustainability report that you can find on our website. In 2025, we reached some important goals in sustainability. I'm not going to rank all, but let's say I would like to highlight four of them. The first one is that at group level, 42% of top priority raw material has been sourced from traceable and lower impact sources. This is a very good results, I would say, and actually we aim in 2026 to reach to grow further this percentage to 50%.

Speaker #1: Full details of that and on our sustainability report, you can find on our website. In 2025, we reached some important goals. In sustainability, I'm not going to rank all.

Speaker #1: But let's say I would like to highlight four of them. The first one is that, at group level, 42% of top priority raw material has been sourced from traceable and lower impact sources.

Speaker #1: This is a very good result. I would say. And actually, we aim in 2026 to reach to grow further this percentage to 50%. We also reached last year the gender equality certification for the Italian entities of Zegna brand.

Paola Durante: We also reached, last year, the gender equality certification for the Italian entities of Zegna brand, and also we have been included in the A-list recognition in the CDP Climate. Last but very important, let me mention also a project that goes beyond sustainability, but it does embrace our legacy and unique know-how. In 2025, our internal academy, we call it the Accademia dei Maestri, trained more than 50 maestri, craftspeople, with distinctive expertise, and we prepare them to pass their knowledge on to future generations. Very important project, which is really part of our legacy and of our included in our values. With this, I hand over to Gianluca for his final remarks.

Speaker #1: And also, we have been included in the A-list commission in the CDP Climate. Last but very important, let me mention also a project that goes beyond sustainability, but it does embrace our legacy and unique know-how.

Speaker #1: In 2025, our internal academy, we call it the Accademia dei Maestri, trained more than 50 maestri, craft people that has a distinctive expertise and we prepared them to pass their knowledge on to future generations.

Speaker #1: Very important project, which is really part of our legacy and is included in our values. And with this, I hand over to Gianluca for his final remarks.

Speaker #2: Thank you, Paola. Before we move to the Q&A, I would like to share a few final remarks. Let me begin with a brief update on the main recent projects and events across our three brands.

Gianluca Tagliabue: Thank you, Paola. Before we move to the Q&A, I would like to share a few final remarks. Let me begin with a brief update on the main recent projects and events across our three brands. I would like to start today with Thom Browne and comment on the recent Thom Browne ASICS launch. As Paola already mentioned, in early March, the brand introduced a three-color limited edition sneaker, which resonated strongly among both existing and new clients. This was a relevant contributor to the DTC growth in the quarter. This successful launch reflects not only a strong creative project, but also a solid go-to-market execution. Now, we aim to leverage this momentum. The launch has helped recruiting new clients. Our goal is to make them, or at least a portion of them, Thom Browne repeat clients.

Speaker #2: I would like to start today with Tom Brown, and comment on the recent Tom Brown ASICS launch. As Paola already mentioned, in early March the brand introduced a three-color limited edition sneaker.

Speaker #2: This resonated strongly among both existing and new clients, and this was a relevant contributor to the DTC growth in the quarter. This successful launch reflects not only a strong creative project, but also a solid go-to-market execution.

Speaker #2: Now, we aim to leverage this momentum, and the launch has helped recruit new clients. Our goal is to make them, or at least a portion of them, Thom Browne repeat clients.

Speaker #2: We see jersey and knitwear as the expected second purchase items in the journey to make them loyal customers of the brand. We will soon launch a high summer capsule with a focus on colorful knitwear, jersey, shirts, a project that will promote a retail-first and merchandising-driven approach to support Tom Brown DTC revenues.

Gianluca Tagliabue: We see jersey and knitwear as the expected second purchase items in the journey to make them loyal customers of the brand. We will soon launch a high summer capsule with a focus on colorful knitwear, jersey, shirts, a project that will promote a retail first and merchandising-driven approach to support Thom Browne DTC revenues. As Paola mentioned, while wholesale performance in Q1 is not indicative of the full year trend, we continue to streamline this channel in order to improve its quality and further focus on Thom Browne DTC. Moving now to Zegna brand. The brand vision is clearly defined, and the team continues to double down on it with strong coherence.

Speaker #2: On the other hand, as Paola mentioned, while wholesale performance in Q1 is not indicative of the full-year trend, we continue to streamline this channel in order to improve its quality and further focus on Thom Browne DTC.

Speaker #2: Moving now to Zegna brand, the brand vision is clearly defined, and the team continues to double down on it with strong coherence.

Speaker #2: At the end of March, during Art Basel Hong Kong, a flagship event within Art Basel, of which Zegna is a global sponsor, the brand successfully hosted a founder suite in the city.

Gianluca Tagliabue: At the end of March, during Art Basel in Hong Kong, a flagship event within Art Basel, of which Zegna is a global sponsor, the brand successfully hosted a Villa Zegna in the city. Founder Suites are smaller scale villas, Zegna villas, built on the same concept, intimate, by invitation only spaces, where our most important guests, the ZEGNA FRIENDS, are immersed in the Zegna legacy through highly personalized experiences. This includes special collections that are exclusive to the event and not available in the regular stores. Guests learn about Zegna's legacy and history in a physical space when the brand international community naturally comes together. Building on this same philosophy of immersive and highly curated brand experiences, Zegna engagement journey will continue in the months ahead.

Speaker #2: Founder Suites are small-scale villas, Zegna Villas, built on the same concept. Intimate, by-invitation-only spaces, where our most important guests—the friends of the brand—are immersed in the Zegna legacy through highly personalized experiences.

Speaker #2: This includes special collections that are exclusive to the event and not available in the regular stores. Guests learn about Zegna's legacy and history in a physical space when the brand international community naturally comes together.

Speaker #2: Building on this same philosophy of immersive and highly curated brand experiences, Zegna engagement journey will continue in the months ahead in June. The brand will further scale this approach in the US, hosting summer 27 fashion show in Los Angeles, alongside the Villa Zegna experience.

Gianluca Tagliabue: In June, the brand will further scale this approach in the US, hosting Summer 27 fashion show in LA, alongside the Villa Zegna experience. The decision to locate the next fashion show and villa in LA reflects both the growing relevance of the US market for Zegna brand and the city's role as a global center of cultural influence. Finally, on TOM FORD FASHION, we already commented during the last call on the success of the most recent fashion show, which further confirmed Haider Ackermann's ability to interpret the Tom Ford codes for fashion and its DNA in a way that is at once unique, contemporary, and deeply personal. Under his creative direction, the brand has defined its path and articulated a clear bridge between its past and its future.

Speaker #2: The decision to locate the next fashion show and villa in Los Angeles reflects both the growing relevance of the US market for Zegna brand and the city's role as a global center of cultural influence.

Speaker #2: Finally, on Tom Ford Fashion, we already commented during the last call on the success of the most recent and rich fashion show, which further confirmed Heider Ackermann's ability to interpret the Tom Ford codes for fashion and its DNA in a way that is at once unique, contemporary, and deeply personal.

Speaker #2: Under his creative direction, the brand has defined its path and articulated a clear bridge between its past and its future. We are now working to translate this momentum and brand energy into in-store revenue generation.

Gianluca Tagliabue: We are now working to translate this momentum and brand energy into in-store revenue generation. The positive Q1 results in DTC confirm that we are moving in the right direction, but we are fully aware that there is still work to be done and that we have to work to further build on this progress. The brand has opened, in Q1, 2 stores in Mexico, entering a market we see as offering a strong potential. Early feedbacks have been encouraging from these stores. Before concluding, let me add some comments on the situation in the Middle East and on current trading. As you know, the group operates 16 DOS in the Middle East region, alongside a limited number of franchisee store. All our stores are open and operational, and our teams continue to work with dedication and a strong sense of engagement in an environment that is obviously complex.

Speaker #2: The positive Q1 results in DTC confirm that we are moving in the right direction. But we are fully aware that there is still work to be done and that we have to work to further build on this progress.

Speaker #2: The brand has opened in Q1 two stores in Mexico, entering a market we see as offering strong potential. Early feedback has been encouraging from these stores.

Speaker #2: Before concluding, let me add some comments on the situation in the Middle East and on current trading. As you know, the group operates 16 dos in the Middle East region, alongside a limited number of franchisee stores.

Speaker #2: All our stores are open and operational, and our teams continue to work with dedication and a strong sense of engagement in an environment that is obviously complex.

Speaker #2: Over the past weeks, we have implemented immediate actions to contain inventory levels and adjust discretionary costs. Thanks to our people's connection with clients and the strength of our brands, in particular the Zegna brand, the revenue decline in the region, although down double-digit, is more contained than the decrease in average mall traffic.

Gianluca Tagliabue: Over the past weeks, we have implemented immediate actions to contain inventory levels and adjust discretional costs. Thanks to our people's connection with clients and the strength of our brands, in particular the Zegna brand, the revenue decline in the region, although down double-digit, is more contained than the decrease in average malls traffic. Considering Middle Eastern cluster, so the resident overall, which includes Middle East clients spending locally and spending abroad, since the beginning of the conflict, the impact is even more limited, being substantially flat to last year. This demonstrates the relevance of the strategy we have implemented over the years in the region with investments that laid the foundation for this relative resilience. While the current situation requires close monitoring, our long-term conviction in the region remains unchanged.

Speaker #2: Considering Middle Eastern cluster, so the residents overall, which includes Middle East clients spending locally and spending abroad, since the beginning of the conflict, the impact is even more limited, being substantially flat to last year.

Speaker #2: This demonstrates the relevance of the strategy we have implemented over the years in the region, with investments that laid the foundation for this relative resilience.

Speaker #2: While the current situation requires close monitoring, our long-term conviction in the region remains unchanged. Middle East continues to be a key market for the luxury goods sector, and the strategic area of focus for our group, to which we remain committed.

Gianluca Tagliabue: Middle East continues to be a key market for the luxury goods sector and a strategic area of focus for our group, to which we remain committed. On current trading, first of all, it is important to underline that we are only one month into Q2, so any indication is by definition partial. Looking at DTC performance for Zegna, we are seeing trends broadly in line with Q1, excluding the Middle East. In the Middle East, April continues to show a double-digit negative trend, but at a lower rate than what we hear from the market and the competition. On Thom Browne, we are very pleased that the ASICS collaboration is now almost sold out across the regions. As expected, the revenue trend therefore will normalize in Q2 by adjusting the ASICS effect.

Speaker #2: On current trading, first of all, it is important to underline that we are only one month into Q2. So any indication is by definition partial.

Speaker #2: Looking at DTC performance for the Zegna brand, we are seeing trends broadly in line with Q1, excluding the Middle East. In the Middle East, April continues to show a double-digit negative trend, but at a lower rate than what we hear from the market and the competition.

Speaker #2: On Tom Brown, we are very pleased that the ASICS collaboration is now almost sold out across the regions. As expected, the revenue trend therefore will normalize in Q2 by adjusting the ASICS effect.

Speaker #2: While we continue to see positive signs, we are also mindful that we need to further build and strengthen this momentum in the coming months, also leveraging on the new clients that the collaboration brought to the brand.

Gianluca Tagliabue: While we continue to see positive signs, we are also mindful that we need to further build and strengthen this momentum in the coming months, also leverage on the new clients that the collaboration brought to the brand. On TOM FORD FASHION, I would say that spring/summer collection has been well-received. April continues to confirm this good trend. These early months of the year reflect the outcome of a vision and the long-term strategy defined in the last years and executed with discipline. We are aware that important work lies ahead. We remain fully engaged in delivering on our commitments, knowing that the overall context remains challenging. With that, we open to the Q&A session.

Speaker #2: On Tom Ford Fashion, I would say that the spring-summer collection has been well received. And April continues to confirm this good trend. These early months of the year reflect the outcome of a vision and the long-term strategy defined in the last years.

Speaker #2: And executed with discipline. We are aware that important work lies ahead, and we remain fully engaged in delivering on our commitments, knowing that the overall context remains challenging.

Speaker #2: With that, we open to the Q&A session.

Speaker #1: Thank you, Gianluca. And operator, can you please open the Q&A?

Paola Durante: Thank you, Gianluca Tagliabue. Operator, can you please open the Q&A?

Speaker #3: We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand.

Operator 2: We will now begin the question and answer session. Please stand by while we compile the Q&A roster. Your first question comes from the line of Christine Huang with UBS. Your line is now open. Please go ahead.

Operator: We will now begin the question and answer session. Please stand by while we compile the Q&A roster. Your first question comes from the line of Christine Huang with UBS. Your line is now open. Please go ahead.

Speaker #3: To withdraw your question, press star one again. Please stand by while we compile the Q&A roster. Your first question comes from the line of Chris Huang with UBS.

Speaker #3: Your line is now open. Please go ahead.

Speaker #4: Hi, thanks for taking my question. It's Chris from UBS. First of all, congrats on the very strong results. I'll stick to two questions.

Christine Huang: Hi, thanks for taking my question. It's Christine Huang from UBS. First of all, congrats on the very strong results. I will stick to two questions. The first one, just wanted to come back on the Chinese consumer comment you made on the Zegna brand. I think Paola Durante, you mentioned that it was back to positive territory in Q1, which was very impressive. Could you maybe kind of elaborate a little bit more on what you have been doing in the region? You know, following that positive start of the year in Q1, would you expect this positive momentum to continue throughout the rest of the year? That's my first one. Secondly, can we just talk a little bit about Thom Browne?

Chris Huang: Hi, thanks for taking my question. It's Christine Huang from UBS. First of all, congrats on the very strong results. I will stick to two questions. The first one, just wanted to come back on the Chinese consumer comment you made on the Zegna brand. I think Paola Durante, you mentioned that it was back to positive territory in Q1, which was very impressive. Could you maybe kind of elaborate a little bit more on what you have been doing in the region? You know, following that positive start of the year in Q1, would you expect this positive momentum to continue throughout the rest of the year? That's my first one. Secondly, can we just talk a little bit about Thom Browne?

Speaker #4: The first one, I just wanted to come back on the Chinese consumer comment. You made on the Zegna brand. I think Paola, you mentioned that it was back to positive territory, in Q1, which was very impressive.

Speaker #4: So, could you maybe kind of elaborate a little bit more on what you have been doing in the region? And following that positive start of the year in Q1, would you expect this positive momentum to continue throughout the rest of the year?

Speaker #4: So that's my first one. Secondly, can we just talk a little bit about Tom Brown? I think obviously Q1 was a very strong quarter, boosted by the ASICS much of incremental revenue that collaboration brought to the brand in Q1?

Christine Huang: I think obviously Q1 was a very strong quarter boosted by the ASICS collaboration. Are you able to quantify how much of incremental revenues that collaboration brought to the brand in Q1? Also, if you could very helpfully break down the like-for-like versus space component. I mean, if we look simply at the number of stores, probably like-for-like is in the range of low to mid-teens, if that's correct. What does that mean for the H1 margins? Thank you very much.

Chris Huang: I think obviously Q1 was a very strong quarter boosted by the ASICS collaboration. Are you able to quantify how much of incremental revenues that collaboration brought to the brand in Q1? Also, if you could very helpfully break down the like-for-like versus space component. I mean, if we look simply at the number of stores, probably like-for-like is in the range of low to mid-teens, if that's correct. What does that mean for the H1 margins? Thank you very much.

Speaker #4: And also, if you could very helpfully break down the like-for-like versus space component, I mean, if we look simply at the number of stores, probably like-for-like is in the range of low to mid-teens, if that's correct.

Speaker #4: And what does that mean for the H1 margins? Thank you very much.

Speaker #1: Thank you, Chris. OK, I'll ask Gianluca to comment on the Chinese market and on Tom Brown.

Paola Durante: Thank you, Chris. Okay. I'll ask Gianluca Tagliabue to comment on the Chinese market and on Thom Browne.

Speaker #3: So, hi, Chris. So yeah, you’re right. Talking about cluster and market for its needs, it’s very similar, knowing that most of the demand is local.

Gianluca Tagliabue: Hi, Chris. Yeah, you're right. The talking about cluster and market for its.

Paola Durante: Yeah

Gianluca Tagliabue: ... Chinese, it's very similar knowing that most of the demand is local. Chinese cluster for Zegna, yes, did turn positive in the quarter. We see this as a positive indication. When you look at the full year, we stay cautious because we see this not as a steady, every week same performance. We see some volatility in the results, so we cannot yet say we are entirely into stable growth momentum. That's why we reaffirm that we are still looking in the planning, probably in a cautiously way, still looking at Greater China more as a flat environment on a comp basis. We are seeing within China big momentum in Hong Kong, and we will also take advantage of this momentum with an important opening along the year with Harbour City in Zegna.

Paola Durante: Yeah

Speaker #3: So Chinese cluster for Zegna, yes, did turn positive in the quarter. So we see this positive indication. When you look at the full year, we stay cautious because we see this not as a steady every week same performance.

Speaker #3: So we see some volatility in the result. So we cannot yet say we are entirely into a stable growth momentum. That's why we reaffirm that we are still looking in the planning probably in a cautiously way still looking at greater China, more as flat environment on a comp basis.

Speaker #3: We are seeing within China big momentum in Hong Kong. And we will also take advantage of this momentum with an important opening along the year with Harbor City in Zegna.

Gianluca Tagliabue: Less of a strong momentum in mainland China. We see the tier 1 cities holding much better than the tier 2 cities. This is in actual the environment of what we see in China. I think that what has been said in the last sessions with me, with Gildo Zegna in several moments, we have been executing in China on the same ground. We were later. I think finally we see some signs of traction. ASICS. You asked on ASICS. ASICS is not the only driver of the +20% growth in DTC. It is an important contributor, but definitely it is a big contributor also the rest. It is not that taking away ASICS we go to zero. It is an important contributor, but substantial growth comes from non-ASICS.

Speaker #3: Less of a strong momentum in mainland China still. We see the tier one cities holding much better than the second-tier cities. So this is in actual the environment of what we see in China.

Speaker #3: Of course, I think that what has been said in the last sessions with me, with Gildo, in several moments, we have been executing in China on the same ground.

Speaker #3: We were later, I think, at finally we see some signs of traction.

Speaker #1: Yes.

Speaker #3: ASICS, you asked on ASICS. ASICS is not the only driver of the plus 20% growth in DTC. It is an important contributor, but definitely it's a big contributor also the rest.

Speaker #3: So, it's not that, taking away ASICS, we go to zero. It's an important contributor, but substantial growth comes from non-ASICS. In terms of space and comp, when you say low to mid, I think you are not making the proper calculation.

Gianluca Tagliabue: In terms of space and comp, when you say low to mid, I think you are not making properly right calculation. In terms of comp, Zegna and Tom Ford are the vast majority is comp. The vast majority is comp. On Thom Browne, there is probably an equivalent component of comp and space. Yeah.

Speaker #3: So, in terms of comp, Zegna and Tom Ford—the vast majority is comp. The vast majority is comp. On Thom Browne, there is probably an equivalent component of comp and space.

Speaker #1: Yeah. Thank you. Second?

Paola Durante: Thank you. Second?

Speaker #3: Your next question comes from the line of Natasha Bonit with Morgan Stanley. Your line is now open. Please go ahead.

Operator 2: Your next question comes from the line of Natasha Bonnet with Morgan Stanley. Your line is now open. Please go ahead.

Operator: Your next question comes from the line of Natasha Bonnet with Morgan Stanley. Your line is now open. Please go ahead.

Speaker #5: Hi, this is Natasha Bonit from Morgan Stanley. Thank you for taking my questions, Paola and Gianluca. I have two. Just first of all, can you remind us on the contribution from pricing this year?

Natasha Bonnet: Hi, this is Natasha Bonnet from Morgan Stanley. Thank you for taking my questions, Paola and Gianluca. I have two. Just first of all, can you remind us on the contribution from pricing this year? I believe it's mid-single digits. Then maybe if you could break down how volume and mix and pricing have trended in Q1. Then my second question on the Zegna brand specifically, what are you seeing in terms of new versus existing clients in Q1, especially in the US, and anything to call out in terms of performance by product categories? Thank you.

Speaker #5: I believe it's mid-single digits. And then maybe, if you could break down how volume and mix and pricing have trended in Q1. And then my second question on the Zegna brands specifically: what are you seeing in terms of new versus existing clients in Q1, especially in the US?

Speaker #5: And anything to call out in terms of performance by product categories? Thank you.

Speaker #1: Thank you, Natasha. Sorry, the second question was just to clarify the contribution by category. But the first part of the question on Zegna was on—

Paola Durante: Thank you, Natasha. Sorry, the second question, just to clarify, okay, the contribution by category, but the first part of the question on Zegna was on?

Operator 2: New clients and.

Gianluca Tagliabue: New clients and.

Speaker #4: New clients and.

Speaker #5: Yes, new versus existing clients.

Natasha Bonnet: Yes, new versus existing clients.

Speaker #1: New versus existing, sorry. I didn't get that. OK, price, price mix, volume. I'll leave a.

Paola Durante: New versus existing. Sorry, I didn't get that. Okay. price mix, volume.

Speaker #3: So by brand, and then I will dip down on Zegna. Zegna debate driver is definitely AUR, with the low-mid, as you said, price component.

Gianluca Tagliabue: By brand, and then I will deep dive on Zegna. Zegna, the big driver is definitely AUR with a low mid, as you said, price component. There is a bigger component on mix. Big component on mix, whether it's elevated luxury leisure wear or the component of Triple Stitch notebooks. There is definitely a mix component that is elevating the AUR. On Thom Browne and Tom Ford, the AUR is less of a topic. It's also volume, the driver. In terms of new existing, we are seeing an increased number of new coming into the Zegna brand. I think the brand momentum, whether it's one product or another, the brand overarching momentum is attracting new clients to the brand.

Speaker #3: So there is a bigger component on mix, a big component on mix—whether it's elevated luxury leisurewear or the component of Triple Stitch, notebooks, or—but there is definitely a mix component that is elevating the AUR.

Speaker #3: On Thom Browne and Tom Ford, the AUR is less of a topic. It's also volume, the driver. In terms of new versus existing, we are seeing an increased number of new coming into the Zegna brand.

Speaker #3: I think that all the— I think the brand momentum, whether it's one product or another, the brand's overarching momentum is attracting new clients to the brand.

Speaker #1: Across all regions, you're actually.

Paola Durante: Across all regions, actually.

Speaker #3: Across all regions. So I think we are seeing more new. And what we are working a lot on is also the retention of new. For instance, I'm making an example because we always think of new through the triple stitch.

Gianluca Tagliabue: Regions. I think we are seeing more new and what we are working a lot is also the retention of new. For instance, I make you an example because we always think of new through the Triple Stitch. It is not only that. We launched in Q1 the collection of fragrances. That is also another entry door to the brand, the Essenze.

Speaker #3: It's not only that. We launched in Q1 the collection of fragrances. That is also another entry door to the brand. The memory.

Speaker #1: Sort of.

Paola Durante: Sure.

Gianluca Tagliabue: Which is, of course, is a brand that well resonate, product story that well resonate in the brand because it talks about the story of the brand. We are opening new doors to come into the brand and the Essenze, that is the fragrance collection, is a perfect example of that.

Speaker #3: Which is, of course, a brand that well resonates—a product story that well resonates in the brand because it talks about the story of the brand.

Speaker #3: So we are opening new doors to come into the brand. And Memoria, that is the fragrance collection, is a perfect example.

Speaker #1: And in terms of price, price mix, also su misura and all the personalized collections also through the Villa Zegna and the suites, are also an important contributor.

Paola Durante: In terms of, price mix, also Su Misura and all the personalized collections also through the Villa Zegna and the suites are also an important contributor.

Speaker #3: Yeah. Su misura is definitely growing a lot. We have always mentioned this. So the Zegna spaces, whether are the suites, which are temporary locations, that we do outside of the stores for a week where we present our unique collection, whether it's a villa, which is the pinnacle of that temporary location, we present collections that are unique can be bought on ready-to-wear, typically are bought on a make-to-measure basis.

Gianluca Tagliabue: Yeah. Su Misura is definitely growing a lot. We have always mentioned this. The Zegna spaces, whether are the suites, which are temporary location that we do outside of the stores for a week, where we present our unique collection, whether it's a villa, which is the pinnacle of that temporary location, we present collections that are unique, can be bought on ready-to-wear, typically are bought on a make-to-measure basis, but they carry an intrinsic higher price. That is a big driver and unique differentiating factors of the brand. We are working to make the make-to-measure also a bigger component of business also on Tom Ford and Thom Browne. Of course, starting from a lower base, but for instance, we launched new collection of Su Misura make-to-measure on Tom Ford in the recent months.

Speaker #3: But they carry an intrinsically higher price, so that is a big driver. And unique differentiating factors of the brand—we are working to make the made-to-measure also a bigger component of business, also on Tom Ford and Thom Browne.

Speaker #3: Of course, starting from a lower base, but for instance, we launched a new collection of su misura, made-to-measure, on Tom Ford in the recent months.

Speaker #3: We opened to women's tailoring. We have opened leather outerwear on su misura on Tom Ford. So that business of su misura, which intrinsically carries a new, higher AUR, is definitely a driver.

Gianluca Tagliabue: We opened to women tailoring. We opened leather outerwear on Su Misura on Tom Ford. That business of Su Misura, which intrinsically carries a new, a new, higher AUR, is definitely a driver. Going back to the last point, which is on new versus existing, I talked about Zegna. I think it's important also to remark on Thom Browne ASICS, which has been an important driver to engage with new customers or re-engage with customers that used to buy at Thom Browne. We, this has been an important hook. When we talk about Thom Browne in Q1, driven also by ASICS, the numbers, but definitely this is a legacy for the remaining quarter.

Speaker #3: Going back to the last point, which is on new versus existing, I talked about Zegna. I think it's important also to remark on Thom Browne, ASICS, which has been an important driver to engage with new customers or re-engage with customers that used to buy at Thom Browne.

Speaker #3: And this has been an important hook. So when we talk about Thom Browne in the first quarter, driven also by ASICS, the numbers, but definitely this is a legacy for the remaining quarter.

Speaker #3: We need to work as a team to make sure that the new clients also prospect, because we basically sold out the product. So, there is someone that didn't find the product.

Gianluca Tagliabue: We need to work as a team to make sure that the new clients also prospect because we basically sold out the product. Say there is someone that didn't find the product, we can engage them, bringing them back and use this as a driver, as a way to bring them back into the Thom Browne brand.

Speaker #3: We can engage them, bringing them back. And use this as a driver, as a way to bring them back into the Tom Brown brand.

Speaker #1: Thank you. Next question, please.

Paola Durante: Thank you. Next question, please.

Speaker #3: Your next question comes from the line of Boomi Carnival, which I freeze. Your line is now open. Please go ahead.

Operator 2: Your next question comes from the line of Bhoomi Karanbaugh with Jefferies. Your line is now open. Please go ahead.

Operator: Your next question comes from the line of Bhoomi Karanbaugh with Jefferies. Your line is now open. Please go ahead.

Paola Durante: Bhoomi?

Speaker #1: Boomi.

Speaker #4: Can I just confirm that when you include the Middle Eastern cluster, it was flat versus last year, but then when you're talking to locals, it's double-digit down?

Bhoomi Karanbaugh: Can I just confirm that when you include the Middle East cluster, it was flat versus last year, but then when you're talking to locals, double-digit down? Second one.

Bhumi Kanabar: Can I just confirm that when you include the Middle East cluster, it was flat versus last year, but then when you're talking to locals, double-digit down? Second one.

Speaker #4: And the second.

Speaker #1: Sorry, I didn't catch the beginning of your statement. Could you please repeat it?

Paola Durante: Sorry, Bhoomi, it was difficult to hear the beginning of, start talking. Can you repeat?

Speaker #4: Yes, sorry. So just a clarification for the first question. Can you just confirm what the Middle Eastern cluster did year-on-year when you're including tourists and locals?

Bhoomi Karanbaugh: Yes, sorry. Just a clarification for the first question. Can you just confirm what the Middle Eastern cluster did year on year when you're including tourists and locals? The second one, can you just talk about how much Su Misura now is as a % of Zegna branded sales versus as a % of Tom Ford and Thom Browne sales, and where you hope that will get?

Bhumi Kanabar: Yes, sorry. Just a clarification for the first question. Can you just confirm what the Middle Eastern cluster did year on year when you're including tourists and locals? The second one, can you just talk about how much Su Misura now is as a % of Zegna branded sales versus as a % of Tom Ford and Thom Browne sales, and where you hope that will get?

Speaker #4: The second one—can you just talk about how much Su Misura is now as a percent of Zegna-branded sales versus as a percent of Tom Ford and Thom Browne sales?

Speaker #4: And where you hope that will get, and then just.

Speaker #1: Boomi, unfortunately, it's very difficult to hear you. And I'm sorry, but.

Paola Durante: Bhoomi, unfortunately, it is very difficult to hear you, and I am sorry, but.

Speaker #3: Robert.

Gianluca Tagliabue: Roberta-

Paola Durante: The first-

Speaker #1: The first.

Gianluca Tagliabue: If I rephrase, I think she was asking more clarity about the Middle East cluster.

Speaker #3: If I rephrase, I think she was asking more clarity about the Middle Eastern cluster.

Gianluca Tagliabue: If I rephrase, I think she was asking more clarity about the Middle East cluster.

Speaker #1: Yeah, the cluster of Middle East, the first one.

Paola Durante: Yeah, the cluster on Middle East, the first one.

Speaker #3: And then personalization in each brand, I think.

Gianluca Tagliabue: Personalization in each brand, I think.

Speaker #1: Gianluca is a much better in understanding.

Paola Durante: Gianluca is much better in understanding.

Speaker #3: Thank you. Ask about the incidence of personalization in the different brands. Am I right?

Gianluca Tagliabue: You asked about the incidence of personalization in the different brands. Am I right?

Bhoomi Karanbaugh: Yes. Yes.

Speaker #4: Yes, yes.

Bhumi Kanabar: Yes. Yes.

Speaker #3: OK.

Gianluca Tagliabue: Okay, good.

Speaker #1: Good. OK, Middle East cluster. The clarification that we commented.

Paola Durante: Good. Okay, Middle East cluster on, okay, the clarification that we comment, yeah.

Speaker #3: Yeah, we said that the Middle East cluster—so all the residents in Middle East from the date of the conflict—have been flat. Not year to date, sorry, but from the date of the conflict.

Gianluca Tagliabue: We said that the Middle East cluster, so all the residents in Middle East year to date, starting, Not year to date, sorry, from the date of the conflict have been flat.

Speaker #1: Yeah, year to date is positive, clearly, because.

Paola Durante: Yeah. Year to date is positive, clearly, of course.

Speaker #3: Year to date is positive because January, February was very positive. So this is what we said before. And this implies, basically, that they have purchased less locally and have purchased more abroad.

Gianluca Tagliabue: Year to date is positive because January and February was very positive. This is what we said before, this implies basically that they have purchased less locally and they've purchased more abroad. This abroad is partially going mostly to Europe.

Speaker #3: And this abroad is partially going mostly to Europe. This is a natural—what we see on the Middle East residents.

Paola Durante: Mm-hmm

Gianluca Tagliabue: what we see on the, on the Middle East residents.

Speaker #1: Personalization, we don't really provide details by brand. But you know that we say that in terms of su misura for Zegna brand, it is around 10%—growing, but around that level.

Paola Durante: Personalization, we don't really provide details by brand, but you know that we say that, in terms of Su Misura for Zegna brand is around 10% growing, but around that level, and this is the number that we can report.

Speaker #1: And this is the number that we can report.

Speaker #3: And on the other two brands, it is minimal so far. But as we said before, we are working to.

Gianluca Tagliabue: On the other two brands is minimal so far, but as we said before, we are working to increase-

Speaker #1: Tom Ford can be.

Paola Durante: Also, or.

Speaker #3: Increase the collection to increase the capacity of the network to sell su misura. So that is an untapped potential for the two brands.

Gianluca Tagliabue: Increase the collection to increase the capacity of the network to sell Su Misura. That is an untapped potential for the two brands.

Speaker #4: Great. Thank you very much.

Bhoomi Karanbaugh: Great. Thank you very much.

Bhumi Kanabar: Great. Thank you very much.

Speaker #1: Thank you, Boomi. Sorry for not understanding immediately. Next one.

Paola Durante: Thank you, Bhoomi. Sorry for not understanding immediately. Next one.

Speaker #3: Your next question comes from the line of Chiara Battistini with JP Morgan. Your line is now open. Please go ahead.

Operator 2: Your next question comes from the line of Chiara Battistini with J.P. Morgan. Your line is now open. Please go ahead.

Operator: Your next question comes from the line of Chiara Battistini with J.P. Morgan. Your line is now open. Please go ahead.

Speaker #4: Thank you very much. Thank you for taking my questions. I have a couple. Please. First one on the performance anemia, a group level. I was wondering, I know you mentioned wholesale drug and DTCL performance.

Chiara Battistini: Thank you very much. Thank you for taking my questions. I have a couple, please. First one on the performance in EMEA at group level. I was wondering, I know you mentioned wholesale drug and DTC outperformance. I was wondering if you could give us a bit better color in terms of quantifying how much DTC was actually up in the quarter in EMEA, and possibly what was the EMEA performance excluding the Middle East in Q1. That's the first question.

Speaker #4: I was wondering if you could give us a bit better color in terms of quantifying how much DTC was actually up in the quarter anemia and possibly what was the anemia performance excluding the Middle East in Q1.

Speaker #4: That's the first question. And second question, and I know this is a current trading update, but I was wondering—not even with a specific indication—but really, how should we be thinking about the operating leverage that, I guess, the Zegna brand should be seeing tracking on the mid-teens growth, in terms of how much margins we should be extrapolating, margin expansion we should be extrapolating versus the level of reinvestment.

Chiara Battistini: Second question, I know this is a current trading update, but I was wondering on not even with a specific indication, but really how should we be thinking about the operating leverage that I guess the Zegna brand should be seeing tracking on meeting growth in terms of how much margins we should be extrapolating, margin expansion we should be extrapolating versus the level of reinvestment. Any indication on how to think about margin progression in H1 given the strong performance would be very helpful. Thank you very much.

Speaker #4: So any indication on how to think about margin progression in H1 given the strong performance would be very helpful. Thank you very much.

Paola Durante: In terms of your first question, Chiara, what has been EMEA performance excluding wholesale, I would say that has been very solid, double-digit for all the 3 brands. In terms of Middle East, in the quarter, EMEA excluding Middle East is basically not much different.

Speaker #1: In terms of your first question, Chiara, what has been Anima performance excluding wholesale? I would say there has been very solid double-digit growth for all the three brands.

Speaker #1: And in terms of Middle East, in the quarter, anemia excluding Middle East is basically not much different.

Speaker #3: Let's give you this. So if you see that our overall group at 7.4, you exclude Middle East from this year and next year, it goes up slightly.

Gianluca Tagliabue: Let's give you this. If you see that our overall group at 7.4, you exclude Middle East from this year and next year, it goes up slightly, but not even 1 point.

Speaker #3: But not even 1 point.

Speaker #1: On the operating leverage, given Zegna performance, I think the question was on Zegna for the rest of the year. I leave it to Gianluca.

Paola Durante: On the operating leverage, given Zegna performance, I think the question was, on Zegna for the rest of the year. I leave to Gianluca.

Speaker #3: I think that so far, let's not enter into revising the outlooks. We confirm what we see out there in terms of consensus, which is floating between 185, 190.

Gianluca Tagliabue: I think that so far, let's not enter into revised outlooks. We confirm what we see out there in terms of consensus, which is floating between 185 and 190 million EUR for adjusted EBIT. Let's remember, that's the reason why we sat there, saying that we have a margin in percentage which is moving sideways to last year, excluding the hit by Saks. Because we have two factors. We're investing heavily in IT, in one group, in creating the backbone across the brands of same system, same processes. This is a moment of investment for the group. Second, we have a currency headwind. We have seen in Q1 5 points. We don't expect 5 points for the year. It will be somewhere close to 2 points. We have anyway headwinds on currency.

Speaker #3: Of the million euro for adjusted EBIT. Let's remember that's the reason why we sat there saying that we have a margin in percentage, which is moving sideways to last year, excluding the hit by Saks.

Speaker #3: Because we have two factors. We're investing heavily in IT, in one group, in creating the backbone across the brands of same system, same processes.

Speaker #3: So this is a moment of investment for the group. And second, we have currency headwind. We have seen in Q1 five points. We don't expect five points for the year.

Speaker #3: It will be somewhere close to two points. So we have, anyway, headwinds on currency. We don't want to push the price lever too much.

Gianluca Tagliabue: We don't want to push the price lever too much, and therefore part of that will impact the bottom line. Therefore, that's the reason why we are cautious in saying that we will enjoy too much of a operating leverage. We want to continue growing at our pace, setting the ground for long-term foundation. Of course, IT is one of those. Not stretching too much the price lever is another thing.

Speaker #3: And therefore, part of that will impact the bottom line. And therefore, that's the reason why we are cautious in saying that we will enjoy too much of an operating leverage.

Speaker #3: We want to continue growing at our pace. Setting the ground for long-term foundation. And of course, IT is one of those. And not stretching too much the price lever.

Speaker #3: It's another thing.

Speaker #1: Thank you.

Paola Durante: Thank you.

Speaker #4: That's great. Thank you.

Chiara Battistini: That's great. Thank you.

Speaker #1: Thank you, Chiara. Next.

Paola Durante: Thank you, Chiara. Next.

Speaker #3: Your next question comes from the line of Maria Nata with Bernstein. Your line is now open. Please go ahead.

Operator 2: Your next question comes from the line of Maria Meita with Bernstein. Your line is now open. Please go ahead.

Operator: Your next question comes from the line of Maria Meita with Bernstein. Your line is now open. Please go ahead.

Speaker #4: Hello, and thank you for taking my questions. I have three. First, at Tom Ford, what is the split between womenswear and menswear today?

Maria Meita: Hello, thank you for taking my questions. I have three. First, at Tom Ford, what is the split between womenswear and menswear today? On womenswear specifically, I know that Haider Ackermann has been focused on ready-to-wear specifically in his first collections, but I was wondering if he's now working on that iconic leather goods sort of model, the next bag that will be popular at Tom Ford. Finally, it's a longer-term question, but today, how confident are you in your 2027 guidance? Because consensus from what I see is below on both top line and bottom line. What levers do you sort of plan to achieve the results in your guidance? Thank you.

Speaker #4: And then on women's wear specifically, I know that Heider Ackermann has been focused on ready-to-wear specifically in his first collections. But I was wondering if he's now working on that iconic leather goods sort of model the next bag that will be popular at Tom Ford.

Speaker #4: And then finally, it's a longer-term question. But today, how confident are you in your 2027 guidance? Because consensus, from what I see, is below on both top line and bottom line.

Speaker #4: And what levers do you plan to achieve the results in your guidance? Thank you.

Speaker #1: Thank you, Maria. So I'll leave to Gianluca on the split men's and women's Tom Ford, 70-30. So this is 70-30 men's and women. But on the leather goods and our plan on Tom Ford fashion, I ask Gianluca to comment more.

Paola Durante: Thank you, Maria. I'll leave to Gianluca on the split mens and womens Tom Ford, the 70/30. This is 70/30 mens/womens, but on the leather goods and our plan on TOM FORD FASHION, I ask Gianluca to comment more. It's part of the journey, as Maria said. We started for ready-to-wear, and we are also going to reinforce the leather goods part.

Speaker #1: It's part of the journey, as Maria said. We started already to wear. And we are also going to reinforce the leather goods part.

Speaker #3: I think we are definitely ahead on the leather wear rather than leather goods. I think that we are seeing good momentum on leather wear mostly in men, but also some good results on the women's side.

Gianluca Tagliabue: I think we are definitely ahead on the leatherwear rather than leather goods. I think that, we are seeing good momentum on leatherwear, mostly men, but also some good results on the women's side. Definitely, that is one of the driver of the growth. Another one is knitwear, which is becoming more and more important for the brand. Of course, there are the iconic parts, which is the units, tuxedo, and so on and so forth. We recognize that we are still looking for iconic pieces on the women bags. On shoes, we are seeing some good results. I think that we are still working hard on the bag. Definitely is one key work stream for the group in the months to come.

Speaker #3: Definitely, that is one of the drivers of the growth. Another one is knitwear, which is becoming more and more important for the brand. Of course, then there are the iconic parts, which are the units, tuxedo, and so on and so forth.

Speaker #3: We recognize that we are still looking for iconic pieces on the women's bags. On shoes, we are seeing some good results. I think that we are still working hard on the bag.

Speaker #3: Definitely, it is one key workstream for the group in the months to come. And that is, if you look at it from the other side, still in top potential.

Gianluca Tagliabue: That is if you look it from the other side, still an untapped potential. We see the opportunity to find a good platform there and make an offer that is Tom Ford in the DNA. That is what all the team from design to merchandising is working. When we feel we have all the stars aligned, the amplification of the message and marketing will come.

Speaker #3: We see the opportunity to find a good platform there. And make an offer that is Tom Ford in the DNA. So that is what all the team from design to merchandising is working when we feel we have all the stars aligned, then the amplification of the message and marketing will come.

Speaker #1: But I would say a very important of the work that has been done on the brand overall, this is really the starting point.

Paola Durante: I would say very important to the work that has been done on the brand. Overall, this is really the starting point.

Speaker #3: On ready-to-wear, I think we are seeing that it is the driver of the growth so far.

Gianluca Tagliabue: On ready-to-wear, I think we are seeing that is the driver of the growth so far.

Speaker #1: 2027 guidance. How confident we are that.

Paola Durante: 2027 guidance, how confident we are that.

Gianluca Tagliabue: We confirm that the targets that we have stated and we declared, they are valid on and we said on the lower part of range. I remember we put a range of revenues and then EBIT. We're still comfortable on that lower part. Of course, why we said lower part, because from when we set the guidance, which was 1 year ago, March 2025, the currencies have taken definitely a swing, and therefore it would not be realistic to take more than the lower part of the guidance. We are still focused on delivering on that lower part of the range. Of course, there is, we are still with a big question mark of what will be the outcome in the next months of Middle East.

Speaker #3: We confirm that the targets that we have stated and we declared are valid, and we said on the lower part of the range.

Speaker #3: I remember we put a range of revenues and a range in EBIT. So we are still comfortable on that lower part. Of course, why we said lower part?

Speaker #3: Because, from when we set the guidance—which was one year ago, March of '25—the currencies have definitely taken a swing. And therefore, it would not be realistic to take more than the lower part of the guidance.

Speaker #3: But we are still focused on delivering on that lower part of the range. Of course, then there is—we are still with a big question mark of what will be the outcome in the next months of the Middle East.

Speaker #3: But we are still seeing that lower range as our goal for.

Gianluca Tagliabue: We are still seeing that lower range as our goal for this.

Speaker #1: OK. Next.

Paola Durante: Okay. Next.

Speaker #3: Your next question comes from the line of Chris Gow with CLSA. Your line is now open. Please go ahead.

Operator 2: Your next question comes from the line of Chris Gao with CLSA. Your line is now open. Please go ahead.

Operator: Your next question comes from the line of Chris Gao with CLSA. Your line is now open. Please go ahead.

Chris Gao: Hi, thank you for taking my question. This is Chris Gao from CLSA. Right. Firstly, it's still about a follow-up about the current trading. Just want to be more precise. How do we see the Q2 today trends compare with March exit rate? This is the first thing, and also if you have more clarity on the DTC and the Zegna co-brands could be highly appreciated. Also on the GP margin trends for the H1. How should we think of this? Definitely, we believe you have strong support from your outstanding DTC sales growth, right? While industry-wise, there are still headwinds from foreign exchange and the input cost volatility from geopolitical tensions.

Speaker #5: Hi. Thank you for taking my question. This is Chris Gow from CLSA. Right. So firstly, it's still about a follow-up about the current trading so just want to be more precise.

Speaker #5: So, how do we see the March exit rate? And this is the first thing. And also, if you have more clarity on the D2C and the Zegna core brand, this would be highly appreciated.

Speaker #5: Also, on the GP margin trends for the first half, how should we think of this? Definitely, we believe you have strong support from your outstanding D2C sales growth, right?

Speaker #5: So, while industry-wise there are still headwinds from foreign exchange and input cost volatility due to geopolitical tensions, how should we think about the first half GP margin trends?

Rachel Smith: How should we think of, you know, the H1 GP margin trends? I understand this was a revenue call, but just any, you know, preliminary color could be highly appreciated. My second question is about the new customer creative contribution comment that management made just now. We're very happy to see there are more new customers contributing to the growth. Just want to confirm, one, if it is also the case among the Chinese cluster and, also among these new client acquisitions, do you see these new clients are more from ZEGNA FRIENDS, are more into the DOERS or more are categorized as Aspirational customers? Just want to understand the profile of these newly acquired customers. Thank you very much.

Chris Gao: How should we think of, you know, the H1 GP margin trends? I understand this was a revenue call, but just any, you know, preliminary color could be highly appreciated. My second question is about the new customer creative contribution comment that management made just now. We're very happy to see there are more new customers contributing to the growth. Just want to confirm, one, if it is also the case among the Chinese cluster and, also among these new client acquisitions, do you see these new clients are more from ZEGNA FRIENDS, are more into the DOERS or more are categorized as Aspirational customers? Just want to understand the profile of these newly acquired customers. Thank you very much.

Speaker #5: I understand this was a revenue call, but just any preliminary color could be highly appreciated. And my second question is about the new customer accretive contribution comment that management made just now.

Speaker #5: So we're very happy to see there are more new customers contributing to the growth. So I just want to confirm, one, if it is also the case among the Chinese cluster, and also among these new client acquisitions, do you see these new clients are more from Zegna France or more into the doers or more are categorized as aspirational customers?

Speaker #5: So I just want to understand the profile of these newly acquired customers. Thank you very much.

Speaker #1: Thank you, Chris. Yes, you said three questions. I think there are a little bit more than that. But let's start with the current trend and the exit rate.

Paola Durante: Thank you, Chris. Yes, you said three questions. I think there is a bit more than that, but let's start with the current trend and exit rate. A few comments in particular on the DTC and Zegna, and I asked Gianluca Tagliabue to provide some colors.

Speaker #1: A few comments in particular on the D2C and Zegna, and I asked Gianluca to provide some color.

Speaker #3: Hi, Chris. So, to give you some color on how we enter into Q2—so, on D2C, we finished Q1 with a plus 14. We said that, excluding Middle East, of course, where the performance is negative compared to last year, D2C overall is trending in line with Q1.

Gianluca Tagliabue: Hi, Chris. Give you some color on where are we entering Q2. On DTC, we finished Q1 with a +14%. We said that excluding Middle East, of course, where the performance is negative compared to last year, DTC overall is trending in line with Q1. We don't see major difference. The performance in Middle East is double digit down, substantially less than what we hear. It's the -50% that is out in the market in terms of traffic. We are experiencing a double-digit decline, much more muted than what we hear out there at a -50. Well, there will be a difference, as we said before, the decline of Thom Browne wholesale in Q1 is not to be replicated in Q2.

Speaker #3: So we don't see a major difference. The performance in the Middle East is double-digit down, but substantially less than what we hear. It's the minus 50% that is out in the market in terms of traffic.

Speaker #3: So, we are experiencing a double-digit decline, but much more muted than what we hear out there at a minus 50. There will be a difference. As we said before, the decline of Thom Browne wholesale in Q1 is not to be replicated in Q2.

Speaker #3: We have said that it will be the overall year full year growth will be much less than that in the range of between 20 and 30.

Gianluca Tagliabue: We have said that will be the overall year, full year growth will be much less than that in the range of between 20% and 30%.

Speaker #1: And D2C Tom Brown also.

Paola Durante: DTC Thom Browne also.

Speaker #3: And D2C Tom Brown will be adjusted for the partial growth contribution coming from ASICs. What was the other? On margin, I think not today.

Gianluca Tagliabue: DTC Thom Browne will be adjusted for the partial growth contribution coming from ASICS. What was the other? On margin, I think not today, we are not talking about H1 or H2 margin because today we want to focus on revenues. In terms of new customers and DOERS. We continue experiences a growth on ZEGNA FRIENDS and DOERS, thanks to the personalization, the elevation of the offer. As I said before, we are seeing more and more new clients coming in from the different doors that I mentioned before, also in China. Before, I didn't mention another entry door is also the 232, that is the new platform of shoes that we put on the side of the Triple Stitch.

Speaker #3: We are not talking about first half or second half margin because today we want to focus on revenues. In terms of new customers and doers, we are seeing growth everywhere.

Speaker #3: We continue experiencing a growth on France and doers thanks to the personalization and the elevation of the offer. As I said before, we are seeing more and more new clients coming in from the different doors that I mentioned before, also in China.

Speaker #3: Before, I didn't mention another entry door is also the 232—that is the new platform of shoes that we put on the side of the triple stage.

Speaker #3: So, we don't have one arrow; we have multiple weapons to bring new clients into the brand. So, I think we see a stable and healthy pattern of growth across the different clusters.

Gianluca Tagliabue: We don't have one arrow only. We have multiple weapons to bring new clients into the brand. I think we see a stable and healthy pattern of growth across the different clusters. We are not banking only on new, we are not banking only on ZEGNA FRIENDS.

Speaker #3: We are not banking only on new. We are not banking only on Zegna France.

Speaker #1: Maybe the only thing that you already mentioned previously is the fact that, in the first half, the impact from currency will be higher than in the second part.

Paola Durante: Maybe the only thing that you already mentioned previously is the fact that in H1, the impact from currency will be higher than in the second part.

Speaker #1: So yeah.

Gianluca Tagliabue: Yeah, we had 5 points in the Q1. I think, hopefully, at this point, the headwind will stabilize. We expect on the full year, probably close to 2 points on the year.

Speaker #3: We had five points in the first quarter, I think, hopefully we will at this point, we will the headwind will stabilize. We expect on the full year probably close to two points on the year.

Speaker #1: Thank you. Thank you, Chris. Next, your next question comes from the line of Adrian Duzaga with Goldman Sachs. Your line is now open. Please go ahead.

Chris Gao: Thank you.

Paola Durante: Thank you, Chris. Next.

Operator 2: Your next question comes from the line of Adrien Duverger with Goldman Sachs. Your line is now open. Please go ahead.

Operator: Your next question comes from the line of Adrien Duverger with Goldman Sachs. Your line is now open. Please go ahead.

Speaker #6: Hey, good afternoon, Gianluca and Paola. Thank you very much for taking my questions. I know you've commented on the consumer environment across regions, but could you please provide a bit more color on the performance by cluster?

Adrien Duverger: Hey, good afternoon, Gianluca Tagliabue and Paola. Thank you very much for taking my questions. I know you've commented on the consumer environment across regions, but could you please provide a bit more color on the performance by cluster?

Speaker #6: My second question would be on the wholesale channel. What are the trends that you're seeing so far in the first half of '26? How is the confidence across your partners?

Adrien Duverger: My second question would be on the wholesale channel. What are the trends that you're seeing so far in H1 2026? How is the confidence across your partners, and what are you seeing with the order books? The last question is just a quick follow-up on your comments on margins. You've reiterated your guidance for margin to be sideways, ex Saks, for the full year. Could you help us frame the phasing for investments between H1 and H2, please? Thank you very much.

Speaker #6: And what are you seeing with the order books? And then the last question is just a quick follow-up on your comments on margins. So you've reiterated your guidance for margin to be sideways ex tax for the full year.

Speaker #6: Could you help us frame the phasing for investments between the first half and the second half, please? Thank you very much.

Speaker #1: Thank you, Adrian. So first, on performance by cluster, hi Adrian.

Paola Durante: Thank you, Adrien. First on performance by cluster.

Gianluca Tagliabue: Hi, Adrien. Cluster, North Americans continued very solid on a double-digit basis. We keep on seeing good momentum. Walking away from the cluster for a moment since we are talking there, we are banking on this by keep on expanding the network there. We are opening Scottsdale and San Diego with Zegna and taking aside Zegna for a moment, we are investing also on Tom Ford, it's Bal Harbour, it's San Diego, and it's Costa Mesa, Southern California. Cluster for Zegna, good, market important, and we continue investing in that market. As I said before, the Chinese cluster turned positive in the quarter. In terms of European are solid double-digit growth.

Speaker #3: So, cluster, North Americans continued very solid on a double-digit basis. So we keep on seeing good momentum. And walking away from the cluster for a moment, since we are talking there, we are banking on this by keep on expanding the network there.

Speaker #3: We are opening Scottsdale and San Diego with Zegna, and taking aside Zegna for a moment, we are investing also in Tom Ford. It's Ballarbor.

Speaker #3: It's San Diego. And it's Costa Mesa, Southern California. So cluster for Zegna good. Market important. And we continue investing in that market. As I said before, the Chinese cluster turned positive in the quarter.

Speaker #3: In terms of European are solid double down growth.

Speaker #1: And double-down growth? Double-digit. Double down.

Paola Durante: Double up.

Gianluca Tagliabue: Double down growth.

Paola Durante: Double digit.

Gianluca Tagliabue: Double digit.

Speaker #3: Double-digit growth. European, cluster, and what we see again—moving away from the cluster a moment—is something that probably is positive for the brand in Europe as a market, not as a cluster.

Paola Durante: Double down.

Paola Durante: Double-digit growth, European cluster. What we see, again, moving away from the cluster a moment, something that probably is positive for the brand in Euro as a market, not as a cluster. We are seeing good growth of locals and also foreigners, which probably I've seen some mixed reports elsewhere. We are seeing also good momentum coming from foreigners in Europe. As I said before, the Middle East cluster was positive, double digit in Q1. Of course, becoming flat from March, beginning March onwards. This is the answer on the cluster.

Gianluca Tagliabue: Double-digit growth, European cluster. What we see, again, moving away from the cluster a moment, something that probably is positive for the brand in Euro as a market, not as a cluster. We are seeing good growth of locals and also foreigners, which probably I've seen some mixed reports elsewhere. We are seeing also good momentum coming from foreigners in Europe. As I said before, the Middle East cluster was positive, double digit in Q1. Of course, becoming flat from March, beginning March onwards. This is the answer on the cluster.

Speaker #3: We are seeing good growth of locals and also foreigners, which probably, I've seen some mixed reports elsewhere. We are seeing also good momentum coming from foreigners in Europe.

Speaker #3: As I said before, the Middle East cluster was positive, double-digit in Q1. Of course, it became flat from March, beginning March onwards. This is the answer on the cluster.

Paola Durante: On the-

Speaker #3: On wholesale, I think it's a strategic self-inflicted limitation we are putting on ourselves. We could definitely open the gate for more and more revenues. On wholesale, we expect still the business to go down.

Gianluca Tagliabue: On wholesale, I think it's a strategic self-inflicted limitations we are putting ourselves. We could definitely open the gate for more and more revenues. We are on wholesale, we expect still the business to go down. As I said before, Thom Browne will not be -58, will be halfway there. What has been the performance of Zegna and Tom Ford, it will still be Tom Ford, probably single-digit negative in the year, and we expect Zegna to be around low double digit in the year for wholesale. It's not a question of order book, it's a question of strategic decision to contain the distribution on some products. We could easily open the gate to have more than the business we are doing on wholesale.

Speaker #3: As I said before, Thom Browne will not be minus 58; it will be halfway there. What has been the performance of the Zegna brand? And Tom Ford—it will still be Tom Ford, probably single digit negative in the year.

Speaker #3: And we expect Zegna to be around low double digit in the year for wholesale. It's not a question of order book. It's a question of strategic decision to contain the distribution on some products.

Speaker #3: We could easily open the gate to have more than the business we are doing on wholesale. In terms of margin, as I said, it's sideways.

Gianluca Tagliabue: In terms of margin, as I said, it's sideways, as we stay there for the time being. We don't provide more details than that today. As I said before, I think that the consensus that is out there is realistic. Of course, with a big question mark about the volatility on Middle East. I think that in the consensus it is baked somehow some disruption from Middle East.

Speaker #3: As we stay there for the time being, so we don't provide more details than that today. I'm, as I said before, I think that the consensus that is out there is realistic.

Speaker #3: Of course, with the big question mark about the volatility in the Middle East. But I think that, in the consensus, it is somehow baked in—some disruption from the Middle East.

Speaker #1: Thank you.

Paola Durante: Thank you.

Speaker #6: Thank you very much.

Adrien Duverger: Thank you very much.

Speaker #1: And ciao, Adrian. Thank you so much. Okay, next. Your next question comes from the line of Anthony Chachafi with BNP. Your line is now open.

Adrien Duverger: Ciao, Adrien. Thank you so much. Okay, next.

Paola Durante: Ciao, Adrien. Thank you so much. Okay, next.

Operator 2: Your next question comes from the line of Anthony Charchafji with BNP. Your line is now open. Please go ahead.

Operator: Your next question comes from the line of Anthony Charchafji with BNP. Your line is now open. Please go ahead.

Speaker #1: Please go ahead.

Speaker #6: Yes, good morning. Thank you for taking my question. It's Anthony Chachafi from BNP. On China, the momentum is improving. And at Zegna, it's a market that is more skewed to tailoring, but also your shoe business is still and was still very resilient last year.

Anthony Charchafji: Yes, good morning. Thank you for taking my question. It's Anthony Charchafji from BNP. On China, the momentum is improving and at Zegna. It's a market that is more skewed to tailoring, but also your shoe business is still and was still very resilient last year. Would you be able to share what category outperformed between tailoring, shoes, and outer wear? Also by clientele, it's also a market skew to top spender, ZEGNA FRIENDS. Did the growth with this top cluster improve and is catching up with the American and European ZEGNA FRIENDS growth? My second question is on the store closure in China for Zegna.

Speaker #6: Would you be able to share what category outperformed between tailoring, shoes, and outerwear? And also by clientele, it's also a market skewed to top spender Zegna friends.

Speaker #6: Did the growth with this top cluster improve? And is it catching up with the American and European Zegna friend growth? My second question is on the store closure in China for Zegna.

Speaker #6: Given that you are planning to close 10 stores in 2026, I'm curious to know if the first closures are seeing a positive effect in the remaining store nearby.

Anthony Charchafji: Given that you are planning to close 10 stores in 2026, I'm curious to know if the first closures are seeing positive effect in the remaining store nearby. So basically a neutral impact on top line. My third question would be on Zegna DTC between price mix and volume. In the recent year, the growth have been driven massively by price and mix with rather subdued volume. I'm just curious to know if you have a date in mind or a year in mind where you expect volume to kick in at some point. My last question is on Zegna wholesale. You decided last year to decrease the quantity of iconic product to your partners, such as the Conte, the Triple Stitch, and the Hubert luxury collection.

Speaker #6: So basically a neutral impact on top line. My third question would be on Zegna DTC, between price mix and volume. In the recent year, the growth has been driven massively by price and mix, with rather subdued volume.

Speaker #6: I'm just curious to know if you have a date in mind, or a year in mind, where you expect volume to kick in at some point.

Speaker #6: And my last question is on Zegna wholesale. You decided last year to decrease the quantity of iconic products to your partners. Such as the Conté, the Triple Stitch, and the Huber luxury collection.

Anthony Charchafji: Given that you guided the Zegna wholesale down low double digit, is there any shift to have in mind from a wholesale to a retail store, basically your retail performance being a bit boosted by a shift to your iconic product?

Speaker #6: Given that you guided Zegna wholesale down low double digit, is there any shift to have in mind from wholesale to retail store—basically your retail performance being a bit boosted by a shift to your iconic product?

Speaker #6: Thank you.

Gianluca Tagliabue: Thanks.

Anthony Charchafji: Thank you.

Speaker #1: Hi, Anthony. So let's start from China. China is not definitely a skewed-to-tailoring market, so it's not that we are banking on tailoring, and it's not tailoring that's the driver.

Gianluca Tagliabue: Hi, Anthony. Let's start from China. China is not definitely a skewed to tailoring market. It's not that we are banking on tailoring and it's not tailoring the driver. I think that the category there that are driving the growth are luxury leisure, all the different categories of luxury leisure. Shoes. Shoes is definitely both on the Triple Stitch, on the 232. The personalization, we have had a very good, partially taken in Q1, partially will be seen in Q2, good campaign of make to measure. I think it's not tailoring the driver of the stabilization of or plus 5 actually of GCR. It's, it's all the rest.

Speaker #1: I think that the category there that are driving the growth are luxury leisurewear—all the different categories of luxury leisurewear. Shoes—shoes is definitely both on the Triple Stitch, on the 232.

Speaker #1: The personalization, we have had a very good partially taken in Q1, partially will be seen in Q2. Good campaign of make to measure. So I think it's not a tailoring the driver of the stabilization of or plus five actually.

Speaker #1: Of GCR. It's on the opposite. It's all the rest. In terms of cluster, I think there the comment I made before about the balanced growth across cluster is the same for GCR.

Paola Durante: So client-

Gianluca Tagliabue: In terms of cluster, I think the comment I made before about the balanced growth across cluster is the same for GCR. We are seeing good momentum for new clients, as I said before, on the different entry door that are Triple Stitch, 232 fragrances, and we are seeing good results also on the loyal big-spending clients. I think that what is true for the brand as a whole is also holding true for Zegna in China. In terms of price mix, of course, we said price low single-digit. AUR driven by mix are drivers. On Zegna, probably, also the number of ticket is up.

Speaker #1: We are seeing good momentum for new clients. As I said before, on the different entry doors—that are Triple Stitch, 232, fragrances—and we are seeing good results also on the loyal, big-spending clients.

Speaker #1: So, I think that what is true for the brand as a whole is also all being true for Zegna in China. In terms of price mix, of course, we said price low single digit.

Speaker #1: AUR, driven by mix, are drivers. On Zegna, probably also the number of tickets is up.

Speaker #5: Yeah, absolutely.

Paola Durante: Yeah, absolutely.

Speaker #1: Also, the number of tickets is up—definitely in some areas with some softness in traffic. But the execution, and especially the conversion, is driving growth also in the number of tickets.

Gianluca Tagliabue: The number of ticket is up, definitely in some areas with some softness in traffic, but the execution and especially the conversion is driving a growth also in the number of tickets. As it refers to Zegna wholesale, yes, it's a decision to contain the distribution of iconic items, the ones that you mentioned. Of course, we are taking advantage of some step back in also distribution in our doors, whether it's existing doors or opening doors. In US, for instance, some new openings that we have, as I mentioned before, I mentioned before Scottsdale could be a door that is also taking advantage of some business that today is not in our DTC network.

Speaker #1: As it refers to Zegna wholesale, yes, it's a decision to contain the distribution of iconic items, the ones that you mentioned. Of course, we are taking advantage of some step back in wholesale distribution in our doors.

Speaker #1: Whether it's existing doors or opening doors. In the US, for instance, some new openings that we have, as I mentioned before, I mentioned before Scott that could be a door that is also taking advantage of some business that today is not in our DTC network.

Gianluca Tagliabue: Of course, we all know that there are some clients, especially in US, that have been going through difficulties, and we paid the consequences last year. On our credit, definitely we're very careful in feeding that business in a very solid way. Therefore, there is a very deliberate decision to focus and channel business that was in wholesale into our stores. In any single location, whether it's Scottsdale, whether it will be in Florida next year, whether it will be San Diego. There are definitely locations where we are opening, and we don't have retail stores where we want to catalyze the business that today is held somewhere else.

Speaker #1: Of course, we all know that there are some clients, especially in the US, that have been going through difficulties. And we paid the consequences last year on our credit.

Speaker #1: Definitely, we're very careful in feeding that business in a very solid way. And therefore, there is a very deliberate decision to focus and channel business that was in wholesale into our stores.

Speaker #1: So in any single location, whether it's Scottsdale, whether it will be in Florida next year, whether it will be San Diego. So there are definitely locations where we are opening.

Speaker #1: And we don't have retail stores where we want to catalyze the business that today is held somewhere else.

Speaker #5: Yes, there was a question on the positive impact from closures in China. Of course, that is definitely our everyday goal for the store. Anytime we close a location, we have a retention plan.

Paola Durante: Yes. There was a question on the positive impact from closures in China, of course.

Gianluca Tagliabue: That is definitely our everyday goal for the store anytime we close a location to have a retention plan. Yes. I think that so far, you cannot retain 100% of the business because it would be illogical. We have realistic goals of retention in any door we close, and we are holding to that plan.

Speaker #5: Yes, so I think that so far you cannot retain 100% of the business because it would be illogical. We have realistic goals of retention in any door we close.

Speaker #5: And we are holding to that plan.

Paola Durante: Great. Maybe just a follow-up on the first one on the ZEGNA FRIENDS or the clusters. Something we didn't mention is that the ZEGNA FRIENDS for Zegna are growing double digits also this quarter. It's true that we have also new and clients, but also our existing clients, both DOERS and ZEGNA FRIENDS are doing very well. Very well. Next.

Speaker #1: And some of the doors were. Maybe just a follow-up on the first one on the Zegna friends or the clusters. Something we didn't mention.

Speaker #1: Is that the Zegna friends for Zegna are growing double digit. Also this quarter. So it's true that we have also new and clients, but also our existing clients, both doors and Zegna friends, are doing very well, very, very well.

Speaker #1: Next.

Speaker #3: Thank you.

Anthony Charchafji: Thank you.

Speaker #1: Thank you. Thank you, Anthony.

Paola Durante: Thank you. Thank you, Anthony.

Speaker #2: Your next question comes from your line of Alice Chance with TD Cowen. Your line is now open. Please go ahead.

Operator 2: Your next question comes from the line of Oliver Chen with TD Cowen. Your line is now open. Please go ahead.

Operator: Your next question comes from the line of Oliver Chen with TD Cowen. Your line is now open. Please go ahead.

Speaker #3: Hi, Paola and Gianluca. The Zegna brand has been impressive. Which regions or geographies drove outperformance just at the core Zegna brand? And then as we think about China, and China tourism overall, how has China tourism been relative to your expectations?

Oliver Chen: Hi, Paola and Gianluca. The Zegna brand has been impressive. Which regions or geographies drove outperformance just at the core Zegna brand? As we think about China tourism overall, how has China tourism been relative to your expectations? Third question, on the Middle East, you've done better than peers, based on strategies you've undertaken. What have those strategies been in terms of lesser, you know, traffic issues relative to competition? Thank you.

Speaker #3: And third question on the Middle East: you've done better than peers based on strategies you've undertaken. What have those strategies been in terms of lesser traffic issues relative to competition?

Speaker #3: Thank you.

Speaker #1: Thank you, Oliver. OK, on the Zegna brand, which regions drove the sequential acceleration in performance?

Paola Durante: Thank you, Oliver. Okay, on the Zegna brand, what regions is has drove the sequential acceleration, the performance?

Speaker #5: Well, hi, Oliver. We never talk about I was there last week. So Latin America, Mexico is booming. Brazil is booming. Percentage terms. So it's definitely not the biggest market.

Gianluca Tagliabue: Hi, Oliver. We never talk about. I was there last week. Latin America, Mexico is booming. Brazil is booming, in percentage terms. It's definitely not the biggest market, but we always talk about America, and we need to also point out, of course, US, but also.

Speaker #5: But we always talk about America. And we need to also point out, of course, US, but also Mexico and Latin America are doing extremely well.

Paola Durante: North America.

Gianluca Tagliabue: ... Mexico and Latin America are doing extremely well. As I said before, Europe, continental Europe, it's doing particularly well for us, both locals and foreigners. Until end of February, Middle East was booming. Japan and Korea, which we always mentioned, it's not, it's not our forte per se, but we are seeing good traction on Japan and Korea across the three brands. Therefore, also driven by Chinese tourists. We are not seeing a lot of Chinese back on the west side in Europe. The driver of success in Europe for non-locals is Middle Eastern, is South Americans, is North Americans.

Speaker #5: As I said before, Europe. Continental Europe, it's doing particularly well for us. Both locals and foreigners. Until end of February, Middle East was booming.

Speaker #5: So I think and Japan and Korea, which we always mentioned, it's not our forte per se. But we are seeing good traction on Japan and Korea, across the three brands.

Speaker #5: Therefore, also driven by Chinese tourists. We are not seeing a lot of Chinese back on the West side, in Europe. So the driver of success in Europe for non-locals is Middle Eastern, is South Americans, is North Americans.

Paola Durante: North America.

Gianluca Tagliabue: In Milan, in London, in Paris, in Madrid. Madrid is becoming a very important city for us. We are opening a new flagship in Madrid in H2 of the year, which is becoming a very important destination for South America, which is a very fertile ground for the brand. I think this answers to your first question. The third, I forgot it.

Speaker #5: In the Milan, in London, in Paris, in Madrid. Madrid is becoming a very important city for us. We are opening a new flagship in Madrid in the second half of the year, which is becoming a very important destination for South American, which is a very fertile ground for the brand.

Speaker #5: So I think this answers your first question. As for the third, I forgot it.

Speaker #1: The Middle East. What has drove our better performance versus competition? What we have done? Of course, it's a success that has started years ago.

Paola Durante: The Middle East, what has drove our better performance versus competition, what we have done, what, of course, is a success that has started years ago, the relations that we have with our customers.

Speaker #1: The relations that we have with our customers?

Speaker #5: I think it's about resilience. Of the I think that our brand we always said we are marathon runners. We are not sprinters. We might not grow so fast, but we run steadily.

Gianluca Tagliabue: I think it's about resilience. I think that our brand. We always said we are marathon runners. We are not sprinters. We might not grow so fast, but we run steadily. I think that our intimacy, the relationship that our teams have with the customers, the fact that they know their lifestyle, the fact. We are not transactional, and therefore, I think that this keeps the business more resilient and steady in the good and bad days. I think we are reaping the effects of very long-term re-relationship with clients, the strategy that we have built. I think this is the reaction of having, also in difficult times, a good resilience and the fact that probably being a client, a brand of destination, these clients also visit us elsewhere.

Speaker #5: I think that our intimacy, the relationship that our teams have with the customers, the fact that they know their lifestyle, we are not transactional.

Speaker #5: And therefore, I think that this keeps the business more resilient and steady in the good and bad days. I think we are reaping the effects of very long-term relationship with clients, the strategy that we have built.

Speaker #5: So I think this is the reaction of having also in difficult times a good resilience. And the fact that probably being a client a brand of destination these clients also visit us elsewhere.

Speaker #5: So maybe they don't visit us in the Middle East. They visit us elsewhere.

Gianluca Tagliabue: maybe they don't visit us in Middle East, they visit us elsewhere.

Speaker #1: Thank you questions?

Paola Durante: Thank you.

Gianluca Tagliabue: Okay.

Paola Durante: Are there more questions?

Speaker #2: There are no further questions at this time.

Operator 2: There are no further questions at this time.

Operator: There are no further questions at this time.

Speaker #1: OK. OK, hello everyone. Alicia speaking. Thank you for attending today's call. I would like to remind you that our next release and conference call will take place on July 23rd.

Paola Durante: Okay.

Operator 2: You're-

Operator: You're-

Paola Durante: Ali-

Operator 2: Yeah.

Operator: Yeah.

Paola Durante: Ranj to Alice.

Alice Poggioli: Okay. Hello, everyone. Alice speaking. Thank you for attending today's call. I would like to remind you that our next release and conference call will take place on 23 July for H1 preliminary revenues. The silent period will begin on 1 July. If you need any other further clarification, please do not hesitate to contact us. Have a nice rest of the day. Ciao.

Speaker #1: For H1 preliminary revenues. The silent period will begin on July 1st. But if you need any other further clarification, please do not hesitate to contact us.

Speaker #1: Have a nice rest of the day. Ciao.

Speaker #4: And then I hopefully a long weekend. I don't know who will have a weekend tomorrow. Thank you to also from myself.

Paola Durante: A nice hopefully long weekend. I don't know who will have a weekend tomorrow. Thank you also from myself.

Speaker #3: And myself. Ciao.

Gianluca Tagliabue: myself. Ciao.

Speaker #1: Ciao.

Paola Durante: Ciao.

Alice Poggioli: Ciao.

Paola Durante: Ciao.

Alice Poggioli: Ciao.

Speaker #4: Ciao.

Speaker #2: This concludes today's call. Thank you for attending. You may now disconnect.

Operator 2: This concludes today's call. Thank you for attending. You may now disconnect.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

Operator 3: This event has now concluded. Thank you for joining Ermenegildo Zegna Group Q1 2026 Revenues. The line will disconnect automatically.

Q1 2026 Ermenegildo Zegna NV Earnings Call

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