ZGN - Ermenegildo Zegna Group Reports First Half 2025 Revenues of Euro928 Million With Profit at Euro48 Million and Adjusted EBIT at Euro69 Million

• Revenues ¹ of €927.7 million, -3% Year-on-Year (YoY) and -2% organic ² . The direct-to-consumer (“DTC”) channel outperformed with a +4% reported revenue growth (+6% organic)
• Profit of €47.9 million, +53% YoY compared to €31.3 million in H1 2024. Profit margin at 5.2% in H1 2025 from 3.3% in H1 2024
• Gross profit margin of 67.5%, up 110bps from 66.4% in H1 2024
• Adjusted EBIT of €68.7 million with an Adjusted EBIT Margin of 7.4% (8.4% in H1 2024). Zegna segment Adjusted EBIT margin up 150bps to 14.3%
• Net financial indebtedness of €92.1 million at June 30, 2025, substantially in line with December 31, 2024

Ermenegildo Zegna N.V. (NYSE:ZGN) (the “Company” and, together with its consolidated subsidiaries, the “Ermenegildo Zegna Group” or “the Group”) today announced Profit of €47.9 million in H1 2025 compared to €31.3 million in H1 2024. In H1 2025, Adjusted EBIT was €68.7 million compared to €80.9 million in H1 2024. ³

Ermenegildo “Gildo” Zegna, Group Chairman and CEO, said: “Our first-half 2025 results reflect the Group’s strategic decision to invest in the DTC store network and capabilities across our three brands, while continuing to support projects that fuel our long-term growth ambitions.

In this context, we are pleased with the operating results reported by the Zegna segment where stronger operating leverage and disciplined execution led to an improvement of the Adjusted EBIT margin by 150 basis points. This strong performance helped balance the impact of the strategic transformation underway at Thom Browne and Tom Ford Fashion.

With the strength of our Filiera , the authenticity of our brands, and—above all—the clarity of our vision and the talent of our team, we remain on track to achieve our 2027 targets, despite sector and currency headwinds.”

Results of Operations

Half Year 2025 Key Financial Highlights

Revenues

In H1 2025 the Group recorded revenues of €927.7 million, -3.4%YoY and -2.0% organic. DTC channel revenues outperformed (+4.2% YoY and +6.1% organic), while the streamlining of the wholesale channel across the three brands led to a decrease in revenues of the channel of 27.1% YoY and 26.5% organic.

In the first six months of 2025, the ZEGNA brand recorded revenues of €570.4 million, +0.8% YoY (+2.6% organic). Thom Browne revenues were €129.2 million, -22.5% YoY (-21.7% organic). TOM FORD FASHION recorded €152.7 million of revenues, +2.8% YoY (+3.8% organic), while Textile revenues were €67.1 million, -6.6% YoY (-6.3% organic).

Gross Profit, Operating Profit and Profit

Gross profit in H1 2025 reached €626.0 million (compared to €637.4 million in H1 2024), with a gross profit margin of 67.5% compared to 66.4% in H1 2024. This improvement was driven mainly by the channel mix, with the proportion of DTC revenues reaching 82% of branded group revenues in H1 2025, up from 76% in H1 2024.

Selling, general, and administrative (SG&A) expenses were €501.8 million (54.1% of revenues) in H1 2025, compared to €497.6 million (51.8% of revenues) in H1 2024. The higher SG&A incidence on revenues largely reflects investments in the expansion of the DTC distribution network, only partially offset by actions taken to contain discretionary costs across brands.

Marketing expenses in H1 2025 were €62.9 million with a 6.8% incidence on revenues, substantially in line with the 7.0% incidence recorded in H1 2024.

As a result, the Group reported an operating profit of €61.3 million compared to €73.1 million in H1 2024.

In the first six months of 2025, the sum of financial income, financial expenses, and foreign exchange gains and losses, were a positive €6.0 million, compared to a negative €24.8 million in H1 2024. This improvement was largely driven by the fair value remeasurement of liabilities for put options held by non-controlling interests as well as a positive foreign currency exchange impact (driven by the depreciation of the U.S. Dollar compared to the Euro).

Consequently, the Group reported a profit of €47.9 million, 53% higher compared to €31.3 million in H1 2024. H1 2025 profit margin was 5.2% compared to 3.3% in H1 2024.

Adjusted EBIT and Adjusted EBIT Margin

The table below shows the reconciliation of profit to Adjusted EBIT and the calculation of the profit margin and the Adjusted EBIT Margin in H1 2025 and 2024. Adjusted EBIT is the main performance metric used by the Group’s management at the consolidated and reporting segment level.

Analysis by Segment

In H1 2025, Adjusted EBIT for the Zegna segment was €94.4 million compared to €84.7 million in H1 2024. Adjusted EBIT for the Thom Browne segment was €4.5 million, compared to €20.2 million in H1 2024. The Tom Ford Fashion segment reported an Adjusted EBIT of negative €19.4 million, compared to negative €11.9 million in H1 2024.

Intersegment eliminations include revenues from sales of Textile and Other product lines (which are both included in the Zegna segment) to the Group’s brands.

Zegna segment

In H1 2025, the Zegna segment (which includes the ZEGNA brand, Textile and Other product lines) generated revenues of €660.3 million compared to €660.5 million in H1 2024.

Adjusted EBIT for the Zegna segment was €94.4 million in H1 2025 with an Adjusted EBIT Margin of 14.3% compared to 12.8% in H1 2024. This 150 bps Adj. EBIT margin improvement has been driven by positive operating leverage and discretionary cost control initiatives.

Thom Browne segment

In H1 2025, the Thom Browne segment generated revenues of €129.5 million compared to €166.9 million in H1 2024.

Adjusted EBIT for the Thom Browne segment was €4.5 million in H1 2025, with an Adjusted EBIT Margin of 3.5% compared to 12.1% in H1 2024. The decrease was led by a negative operating leverage resulting from the decrease in revenues in the period and higher initial costs related to the newly opened DTC stores, which have not yet reached their run-rate efficiency.

Tom Ford Fashion segment

In H1 2025, the Tom Ford Fashion segment generated revenues of €152.7 million compared to €148.5 million in H1 2024

Adjusted EBIT for the Tom Ford Fashion segment in H1 2025 was negative €19.4 million, compared to negative €11.9 million in H1 2024, primarily due to investments in the expansion of the store network and in new talents, IT and the corporate and retail structure to build the platform and support the expansion of the business.

Capital Expenditure, Trade Working Capital, Net Financial Indebtedness/(Cash Surplus) and Free Cash Flow

Capital expenditure

Capital expenditure (capex) in H1 2025 was €54.0 million compared to €60.1 million in H1 2024. H1 2025 capex was mainly related to the expansion of the DTC store network across the three brands and to a portion of the investments for the new shoe production plant in Parma (Italy).

Trade Working Capital

Trade Working Capital was €441.8 million at June 30, 2025 compared to €460.0 million at December 31, 2024. The decrease mainly resulted from a better inventory management and a reduction in receivables driven by the streamlining of the wholesale business.

Net Financial Indebtedness/(Cash Surplus)

Net Financial Indebtedness was €92.1 million at June 30, 2025, substantially in line with €94.2 million at December 31, 2024.

Free Cash Flow

In H1 2025 Free Cash Flow was negative €23.1 million compared to negative €6.6 million in H1 2024. The higher absorption in H1 2025 was primarily driven by the lower cash flow generation from operating activities.

Upcoming events

Next financial releases

• October 23, 2025: Q3 2025 Unaudited Revenues

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Conference Call

As previously announced, the Group will host a live webcast and conference call today at 8:00 a.m. ET (2:00 p.m. CET).

To access the webcast please visit our website ( https://ir.zegnagroup.com/financial-calendar/events ) .

To participate in the call, please dial:

Italy: +39 06 9450 1060
United States: +1 646 233 4753
United Kingdom: +44 20 3936 2999

Access Code: 069369

Webcast link: https://events.q4inc.com/attendee/485951116

An online archive of the broadcast will be available on the website shortly after the live call and will be available for twelve months.

About Ermenegildo Zegna Group

Founded in 1910 in Trivero, Italy, the Ermenegildo Zegna Group (NYSE:ZGN) is a global luxury company with a leading position in the high-end menswear business. Through its three complementary brands, the Group reaches a wide range of communities and market segments across the high-end fashion industry, from ZEGNA’s timeless luxury to the modern tailoring of Thom Browne, to seductive elegance with TOM FORD FASHION. The Ermenegildo Zegna Group is internationally recognized for its unique Filiera, owned and controlled by the Group, which is made up of the finest Italian textile producers fully integrated with unique luxury manufacturing capabilities, to ensure superior excellence, quality and innovation capacity. The Ermenegildo Zegna Group has more than 7,100 employees and recorded revenues of €1.95 billion in 2024.

Forward Looking Statements

This communication contains forward-looking statements that are based on beliefs and assumptions and on information currently available to the Company. In particular, statements regarding future financial performance and the Group’s expectations as to the achievement of certain targeted metrics at any future date or for any future period are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “target,” “seek”, “aspire,” “goal,” “outlook,” “guidance,” “forecast,” “prospect” or the negative or plural of these words, or other similar expressions that are predictions or indicate future events or prospects, although not all forward-looking statements contain these words. Any statements that refer to expectations, projections or other characterizations of future events or circumstances, including strategies or plans, are also forward-looking statements. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements, and, as such, undue reliance should not be placed on them. Actual results may differ materially from those expressed in forward-looking statements as a result of a variety of factors, including: the recognition, integrity and reputation of our brands; our ability to anticipate trends and to identify and respond to new and changing consumer preference; pandemics or other public health crises; international business, regulatory, social and political risks; restrictions on trade and the imposition of tariffs among countries; political instability, geopolitical tensions or conflicts and the imposition of sanctions (including armed conflicts, such as the war in Ukraine and the conflict in the Middle East, and sanctions imposed onto Russia); the occurrence of acts of terrorism or similar events, conflicts or civil unrest; existing or future disputes, proceedings or litigation; future sales of our securities in the public market; our ability to maintain compliance with applicable listing standards; volatility in our share price; our ability to implement our strategy; recent and potential future acquisitions; disruption to our manufacturing and logistics facilities, as well as our directly operated stores; risks related to the sale of our products through our direct-to-consumer channel, as well as through points of sale operated by third parties in the wholesale channel; our dependence on our local partners to sell our products in certain markets; fluctuations in the price or quality of, or disruptions in the availability of, raw materials; our ability to negotiate, maintain or renew our license or co-branding agreements with high end third party brands; tourist traffic and demand; our dependence on certain key senior personnel as well as skilled personnel; our ability to protect our intellectual property rights; any malfunction or disruption in our information technology and networks, including as a result of cybercrime; the theft or unauthorized use of personal information of our customers, employees or other parties; fluctuations in currency exchange rates or interest rates; credit risk; the high level of competition in the industry in which we operate; global economic conditions and macro events, including inflation; changes in, or failures to comply with, applicable laws and regulations, or actions taken by regulatory authorities; climate change and other environmental impacts and our ability to meet our customers’ and other stakeholders’ expectations on environment, social and governance matters; the enactment of tax reforms or other changes in tax laws and regulations; and other risks and uncertainties, including those described in our filings with the SEC.

Most of these factors are outside the Company’s control and are difficult to predict. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by the Company and its directors, officers or employees or any other person that the Company will achieve its objectives and plans in any specified time frame, or at all. The forward-looking statements in this communication represent the views of the Company as of the date of this communication. Subsequent events, factors and developments may cause that view to change, and it is not possible to assess the impact of such event, factor or development on the Company’s and the Group’s business. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company disclaims any obligation to update or revise publicly forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing the views of the Company as of any date subsequent to the date of this communication.

First Half 2025 - Group Revenues Tables

Intersegment eliminations include revenues from products that the Textile and Other product lines (included in the Zegna segment) sold to the Group’s brands.

Non-IFRS Financial Measures

The Group’s management monitors and evaluates operating and financial performance using several non-IFRS financial measures including: adjusted earnings before interest and taxes (“Adjusted EBIT”), Adjusted EBIT Margin, Net Financial Indebtedness/(Cash Surplus), Trade Working Capital, Free Cash Flow, revenues on a constant currency basis (Constant Currency) and revenues on an organic growth basis (organic or organic growth). The Group’s management believes that these non-IFRS financial measures provide useful and relevant information regarding the Group’s financial performance and financial condition, and improve the ability of management and investors to assess and compare the financial performance and financial position of the Group with those of other companies. They also provide comparable measures that facilitate management’s ability to identify operational trends, as well as make decisions regarding future spending, resource allocations and other strategic and operational decisions. While similar measures are widely used in the industry in which the Group operates, the financial measures that the Group uses may not be comparable to other similarly named measures used by other companies nor are they intended to be substitutes for measures of financial performance or financial position as prepared in accordance with IFRS Accounting Standards. A definition, explanation of relevance and a reconciliation of each non-IFRS financial measure to the most directly comparable measure calculated and presented in accordance with IFRS Accounting Standards are set out below.

Adjusted EBIT and Adjusted EBIT Margin

Adjusted EBIT is defined as profit or loss before income taxes plus financial income, financial expenses, foreign exchange gains and losses, and the result from investments accounted for using the equity method, adjusted for income and costs which are significant in nature and that management considers not reflective of underlying operating activities, including, for one or all of the periods presented and as further described below, net impairment of leased and owned stores, severance indemnities and provisions for severance expenses, legal costs for trademark dispute and transaction costs related to acquisitions.

Adjusted EBIT Margin is defined as Adjusted EBIT divided by revenues of the applicable period.

The Group’s management uses Adjusted EBIT and Adjusted EBIT Margin for internal reporting to assess performance and as part of the forecasting, budgeting and decision-making processes as they provide additional transparency regarding the Group’s underlying operating performance. The Group’s management believes these non-IFRS financial measures are useful because they exclude items that management believes are not indicative of the Group’s underlying operating performance and allow management to view operating trends, perform analytical comparisons and benchmark performance between periods and among segments. The Group’s management also believes that Adjusted EBIT and Adjusted EBIT Margin are useful for investors and analysts to better understand how management assesses the Group’s underlying operating performance on a consistent basis and to compare the Group’s performance with that of other companies. Accordingly, management believes that Adjusted EBIT and Adjusted EBIT Margin provide useful information to third party stakeholders in understanding and evaluating the Group’s operating results.

The following table presents a reconciliation of Profit to Adjusted EBIT and the calculation of the Profit Margin and the Adjusted EBIT Margin for the six months ended June 30, 2025 and 2024:

Net Financial Indebtedness/(Cash Surplus)

Net Financial Indebtedness/(Cash Surplus) is defined as the sum of financial borrowings (current and non-current) and derivative financial instrument liabilities, net of cash and cash equivalents, derivative financial instrument assets and securities (recorded within other current financial assets in the semi-annual condensed consolidated statement of financial position).

The Group’s management believes that Net Financial Indebtedness/(Cash Surplus) is useful to monitor the level of net liquidity and financial resources available to the Group. The Group’s management believes this non-IFRS financial measure aids management, investors and analysts to analyze the Group’s financial position and financial resources available, and to compare the Group’s financial position and financial resources available with that of other companies.

The following table sets forth the calculation of Net Financial Indebtedness/(Cash Surplus) at June 30, 2025 and at December 31, 2024:

Trade Working Capital

Trade Working Capital is defined as current assets less current liabilities adjusted for derivative assets and liabilities, tax receivables and liabilities, cash and cash equivalents, borrowings, lease liabilities, and certain other current assets and liabilities.

The Group’s management uses Trade Working Capital to understand and evaluate the Group’s liquidity generation/absorption. The Group’s management believes this non-IFRS financial measure is important supplemental information for investors in evaluating liquidity in that it provides insight into the availability of net current resources to fund our ongoing operations. Trade Working Capital is a measure used by management in internal evaluations of cash availability and operational performance.

The following table sets forth the calculation of Trade Working Capital at June 30, 2025 and at December 31, 2024:

Free Cash Flow

Free Cash Flow is defined as net cash flows from operating activities less payments for property, plant and equipment (net of proceeds from disposals), intangible assets, right-of-use assets and lease liabilities.

The Group’s management believes that Free Cash Flow is a useful metric for management, investors and analysts to evaluate and monitor the Group’s ability to generate cash, including in comparison to other companies. Free Cash Flow is not representative of residual cash flows available for discretionary purposes.

The following table sets forth the Free Cash Flow for the six months ended June 30, 2025, and 2024:

Revenues on a constant currency basis (Constant Currency)

In addition to presenting our revenues on a current currency basis, we also present certain revenue information on a constant currency basis (Constant Currency), which excludes the effects of foreign currency translation from our subsidiaries with functional currencies different from the Euro.

We calculate Constant Currency revenues by applying the current period average foreign currency exchange rates to translate prior period revenues of foreign subsidiaries expressed in local functional currencies different than the Euro.

We use revenues on a Constant Currency basis to analyze how our underlying revenues have changed between periods independent of the effects of foreign currency translation.

Revenues on a Constant Currency basis are not a substitute for revenues on a current currency basis or any IFRS-related measures, however we believe that revenues excluding the impact of foreign currency translation provide additional useful information to management and to investors in analyzing and evaluating our revenues and operating performance.

Revenues on an organic growth basis (organic or organic growth)

In addition to presenting our revenues on a current currency basis, we also present certain revenue information on an organic growth basis (organic or organic growth). Organic growth is calculated as the change in revenues from period to period, excluding the effects of (a) foreign exchange, (b) acquisitions and disposals and (c) changes in license agreements where the Group operates as a licensee.

In calculating organic performance, the following adjustments are made to revenues:

1. Foreign exchange – Current period average foreign currency exchange rates are used to translate prior period revenues of foreign subsidiaries expressed in local functional currencies different than the Euro.
2. Acquisitions and disposals – Revenues generated by businesses and operations acquired in the current year are excluded. Revenues generated by businesses and operations acquired in the prior year are excluded from the current year for the same period that corresponds to the pre-acquisition period in the prior year. Additionally, where a business or operation was a customer prior to an acquisition, the related pre-acquisition revenues are excluded from the current and prior periods. Revenues generated by businesses and operations disposed of in the current year or prior year are excluded from both periods as applicable.
3. Changes in license agreements where the Group operates as a licensee – Revenues generated from license agreements where the Group operates as a licensee that are new or terminated in the current year or prior year are excluded from both periods (except if the effects are already included in acquisitions and disposals). Additionally, revenues generated from license agreements where the Group operates as a licensee that experienced a structural change in the scope or perimeter in the current year or prior year are excluded from both periods, including changes to product categories, distribution channels or geographies of the underlying license agreements.

We believe the presentation of revenues on an organic basis is useful to better understand and analyze the underlying change in the Group’s revenues from period to period on a consistent perimeter and constant currency basis.

Revenues on an organic basis are not a substitute for revenues on a current currency basis or any IFRS-related measures, however we believe that revenues excluding the effects of (a) foreign exchange, (b) acquisitions and disposals and (c) changes in license agreements where the Group operates as a licensee provide additional useful information to management and to investors in analyzing and evaluating our revenues and operating performance.

The tables below show a reconciliation of reported revenue performance to Constant Currency, excluding the effects of foreign exchange, and to organic performance, which excludes also acquisitions and disposals and changes in license agreements where the Group operates as a licensee, by segment, by brand and product line, by distribution channel and by geographic area for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 (H1 2025 vs H1 2024) and for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 (Q2 2025 vs Q2 2024). Revenues on an organic growth basis for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, and for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, are equal to Constant Currency since there is no impact from acquisitions and disposals or changes in license agreements where the Group operates as a licensee.