ZGN Reports H1 2025 Profit Up 53%

Ermenegildo Zegna N.V. (ZGN.US) announced its first-half 2025 results, with profit reaching €47.9 million, marking a significant 53% increase compared to €31.3 million in H1 2024. Revenues for H1 2025 were €927.7 million, a 3.4% year-over-year decrease. The company's profit margin improved to 5.2% from 3.3% in the prior year period.

Strong Zegna Segment Performance

The Zegna segment demonstrated robust performance in H1 2025, with Adjusted EBIT reaching €94.4 million, an 11.4% increase from €84.7 million in H1 2024. The Adjusted EBIT Margin for this segment improved by 150 basis points to 14.3%, primarily driven by positive operating leverage and disciplined cost control initiatives.

Strategic Investments Impacting Other Segments

While the Zegna segment thrived, the Thom Browne and Tom Ford Fashion segments experienced challenges due to strategic transformations and investments. Thom Browne's Adjusted EBIT decreased by 77.8% to €4.5 million, impacted by lower revenues and higher initial costs for newly opened DTC stores. Similarly, Tom Ford Fashion reported a negative Adjusted EBIT of €19.4 million, a decline from negative €11.9 million in H1 2024, attributed to investments in store network expansion, new talent, and IT infrastructure.

Direct-to-Consumer Channel Outperforms

The direct-to-consumer (DTC) channel was a key driver of positive performance, with revenues growing 4.2% year-over-year and 6.1% organically. This channel now accounts for 82% of branded group revenues, up from 76% in H1 2024, indicating a successful shift in distribution strategy. Conversely, the streamlining of the wholesale channel led to a 27.1% decrease in its revenues.

Management Outlook and Financial Stability

Group Chairman and CEO, Ermenegildo “Gildo” Zegna, affirmed the company's commitment to long-term growth, stating that results reflect strategic investments in the DTC network and capabilities across all three brands. Despite sector and currency headwinds, the Group remains on track to achieve its 2027 targets, supported by its Filiera, brand authenticity, and clear vision. Net financial indebtedness remained substantially in line with year-end 2024 at €92.1 million, reflecting stable financial health.