Ermenegildo Zegna N.V. Ordinary Shares

Hello everyone and thank you for standing by. The Managerial Dozania Group Q3 2025 Revenues Call will be beginning in just a few minutes time. We thank you for your patience and we will begin shortly. Good afternoon, good morning, everyone. Thank you for joining the Amena Gildo Xenia Group Q3 2025 Revenues Call. Please note that today's material and presentation are available under the xeniagroup.com website. Joining us today, the Xenia Group Senior Management Team, including Gianluca Tagliabue, Group CFO and COO, and Paola Durante, Chief of External Relations. Before we begin, we need to point out that the team will make certain forward-looking statements during the call. the group actual results may be materially different from those expressed or implied by these forward-looking statements. Also, these statements are subject to a number of risks and uncertainties, including those described in our SEC filings. 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.

Thank you, thank you operator and good morning also from myself and good afternoon to everybody. Welcome to our group. Q3 and nine months 2025 revenues call. As usual, for Q1 and Q3 revenues, today's call is led by Gianluca Tagliabue and myself. Alice Poggioli is absolutely here with us. Our CEO, Mr. Gildo, will attend the February call on full year 2025 revenue. Let's then move to page seven of the presentation. where we comment revenue trends. You know that to comment revenue trends, we want to focus on organic performance, which excludes foreign exchange impacts, and therefore it is better to reflect the underlying business dynamics. This approach actually is particularly relevant this year, given the sharp appreciation of the euro against the key currencies, such as the US dollar and the Chinese renminbi, among the others. And I have to say even more in this quarter and the next one. In Q3 2025, our group reported €398 million in revenues, up 4% organic, with a sequential acceleration of the DTC channel, which was up 9% in the quarter, with, I have to say, remarkable results across the three brands. Nine months revenues were €1.3 billion. Let's then move to page 8 and let's go directly to comment on the performance by brand. In Q3, Zegna Brand recorded revenues of 249 million euro with a 6% growth. This performance was led by a solid performance in the DTC channel, particularly in EMEA and Americas. Tom Brown revenues of 48 million euros in Q3. The brand, although remaining slightly negative in the quarter, showed a sequential improvement in both channels. Anthem for Fashion, which reported 66 million euros in revenues, was up 4% organic, which was driven by the DTC channel, also supported by the good reception of the Fall-Winter 25 show collection. Last, Textile was flat in the quarter, while other revenues that you know are today a marginal part of our business and relates to the finished product ready-to-wear garments that we produce for third party brands reported a 12% growth. Moving now to page 9 and commenting the by geographic area revenues. Starting from EMEA, represented in the first nine months, 36% of the group total revenue. It's the first region of our group. Revenues in the quarter were up 3%, thanks to a very solid performance in the DTC channel, particularly at Zegna Tonfo Fashion, which was partially obsessed by the negative contribution of the wholesale. America's second region, contributing to 29% of the nine-month revenue, recorded in the quarter a 13% growth, driven by the solid DTC performance across the three brands. And with the US as the market, which is also the largest market, leading the performance. But let me say that also LATAM, even if still a relatively small contributor to the region, continued to show robust double-digit growth. Commenting on cluster, I know that this is a question you normally ask after. Considering Zegna brand US customers cluster continue to grow sound double digit. So the Zegna US customers were growing both domestically and abroad. Moving to the Greater China region, which in the first nine months accounted for 23% of total revenues. In the quarter, revenues were down 7%, showing a sequential improvement across the three brands, with Tom Brown leading the trends. Finally, on the rest of APAC, 12% of nine-month revenues, the quarter showed a 3% growth driven by strong performances recorded in Singapore, of course, of a smaller basis, but nice Performance and some improvements in mainly in Korea. Page 10. I won't really go much in details because as as you know, I prefer to comment. We prefer to comment on the bright brand by channel performance. Only two numbers I would like to highlight. The first one is the 9% DTC growth in the quarter and the second one that DTC in the first nine months accounted at the group level for 82% of our revenues. So let's then move to page 11, Xenia, commenting on Xenia. third quarter xenia dpc revenues grew seven percent um equal to 87 percent of the brand's nine months revenues this seven percent growth in the quarter was led by america a a solid double digit growth in emea and americas the greater china region revenues trend remained negative but showed some signs of improvement compared to the second quarter You know, so thanks to a easier or slightly easier base of comparison in in this quarter. The performance in the region remains volatile. I have to say remains volatile and still difficult to read, but commenting on the cluster. The the the cluster improved in the quarter sequentially, and was a negative high single digit compared to the double digit we reported, you remember, previously. In Zegna, in the third quarter, closed a fourth store, and these were mainly actually in GCR. Briefly on the wholesale performance for Zegna, revenues were down 3% or 11% in the nine months. I ask you, in particular for the wholesale performance, to consider or to look more into the year-to-date, in this case the nine-month performance, which better reflects the underlying business. Sometimes quarterly performance can be affected by different timing of deliveries. In particular for Zegna also for the drop strategy that as you know can cause different deliveries to our wholesale customers. For year end we confirm the indication for Zegna of an wholesale down in the mid teens because as we commented already, Several times we are increasing control in the distribution of iconic products, and we also did some conversion of wholesale point of sales in retail concessions. OK, now page 12 Tom Brown. Tom Brown BTC revenues were up 10% in the third quarter, showing a sequential acceleration which was driven by the American region, because of the new openings, as well as this some sequential improvement in GCR and rest of APAC. Thom Browne opened four doors in the quarter, including an important concession at Selfridges Women in London and Kyoto Isetan. The wholesale, in line with expectation, was down 37% in the quarter and 50% in the first nine months. Let's then move to Tom Ford Fashion. I would say, I can say last but not least, page 13. Tom Ford Fashion reported in the third quarter a 16% growth in the DTC channels, which has been driven by the successful reception of the Fall-Winter 25 collection in stores across all regions and also by some new store openings. Of course, Also, the work that has been done in this month in terms of people and training and talent in stores is also bearing some results. But we know that we are just at the beginning of the journey to strengthen the brand in the fashion business, in particularly in the DTC important channel. The path ahead of us is clear, is defined. we need to follow it step by step and we just start doing the first step into it. That said, we are absolutely encouraged by the client's positive feedback on the collection. Tom Ford Fashion didn't open any store in the quarter and the wholesale was down 19%, 10% in the first nine months. Again, some timing differences we confirm here by year end and wholesale performance negative in the region of 10%. I finished my comment showing on page 14 the nice facade of the very beautiful Zegna store in the Miami Design District. Miami, you know, is a vibrant city, not only in the US, and in December Zegna will host an event during the Art Basel Miami. As you know, art has always been part of Zegna identity and legacy since our founder, Ermenegildo Zegna. Early this year, we signed a multi-year partnership with Art Basel, which offers a global platform to celebrate art that resonates with Zegna customers and Zegna values. So in early December we will have this nice event with our customers in Miami. And on page 15, moving to page 15, you find just our store network. No comments to be made here. You just need to see the numbers, I think. And before leaving the floor to Gianluca, on page 16, we have published the financial calendar for 2026. You can find it here in our press release and also on our website. Please mark your agenda for next year. And with this, I now hand over to Gianluca for some final remarks before your Q&A.

Thank you, Paola. So before adding to the Q&A session, I would like to share a few final remarks. let me begin by highlighting the exceptional fashion shows presented by both tom ford fashion and tom brown in paris in this october both received enthusiastic recognition from the press and from our clients reflecting continued progress along the past set for this brand talking about tom ford fashion in particular as paula noted the first eider ackerman collection for winter 25 arrived in the store at end of August and was well received and contributed to our quarterly results. Of course, these are early signs and while we are pleased to see such a positive start, we are aware that the journey to fully unlock Tom Ford fashion potential is still ahead of us and that it might not be a straight line. We must continue anyway building this momentum. On Thom Browne, let me highlight the recent events also held to celebrate the opening of the Ginza store in Tokyo. The brand hosted a series of curated experiences from a screening of the Thom Browne documentary presented by GQ Japan to a cocktail party, an intimate dinner with celebrities and friends of the brand, and the presence of Thom himself. These moments reflect the brand's emotional connection with its audience. We'll see more of this unfolding on Thom Browne's social media channels in the coming weeks. Finally, turning to Zegna, we have already touched on the success of Drop 2, which saw an activation on September 1st and was launched alongside the campaign It's Not a Suit, It's a Zegna. With this collection, Zegna celebrated its heritage and the ongoing pursuit of excellence and innovation embodied by bellozare, the finest wool. Bellozare means golden fleece. The Zegna Torino suit draws directly from our founder's personal wardrobe, recalling the days he would drive to his Torinese tailor to craft suits with a unique, defined, and unmistakable style. Rooted in heritage, yet forward-looking, the Torino style bridges the past and the future. This campaign reaffirmed Zegna's role in shaping contemporary style, while the collection's results confirmed the strength of the brand's vision and the robustness of its execution. Let me remind also you that on October the 1st, we celebrated the reopening of the fully renovated store in Dubai Mall, which now includes Il Salotto, the brand's exclusive by appointment only private space. a space that is truly and exceptional. I invite you whenever you pass in Dubai to visit. I will now share a few general closing remarks. Currency fluctuations, as Paul anticipated, continue to present a headwind for the sector. We have seen that in Q3 it was between three and four points. And the base of comparison in this regard will be even stronger in the fourth quarter when the impact of currency might be between four and five from organic to reported. The volatility of consumer demand remains a defining factor, particularly in certain regions, starting with China, which we expect to remain volatile in the coming months. As Gildo noted in the prior calls, China remains a corner store for the sector and for us. But we see it settling into a new normal, which we expect to lead into balanced growth rates in the coming years. That's the way we put ourselves, the mindset we had towards budget, towards open to buy. In this environment, we know how important it is to stay sharply focused on the key priorities we have defined for each of the three brands and to deliver on them. The direction is clear. The projects in our pipeline are being implemented with discipline. This gives us a solid base to remain cautiously confident as we navigate the period ahead of us. And with that, let me open the Q&A session.

Thank you. We will now begin the question and answer session. If you would like to ask a question today, please do so now by pressing start followed by the number one on your telephone keypad. If you change your mind or you feel like your question has already been answered, you can press start followed by two to remove yourself from the key. Our first question today comes from Anthony Charfagy with BMP Paribas. Please go ahead, your line is now open.

Good morning, it's Anthony from BNP. Thank you very much for taking my question. The first one would be on current trading and any expectation that you could share into Q4. My second one would be on China, namely mainland China performance at Xenia. Could you add a bit of color on what you're seeing? in terms of traffic, and more importantly, if you're seeing the affordable part of the demand that is coming back rather than the high end. That would be my second question. And my last one would be on the FX impact, not on top line, but rather on margin. what do you expect for this year or rather into next year? And do you think that it's a fair assumption to assume some kind of impact into next year? Thank you very much.

Okay. Thank you, Anthony. Thank you for the three questions. Well, I leave to Gianluca and then if there are other comments on current trading and on China performance.

Hi Anthony, so the current rating so Q4 just started so we it's early to make a final comment after just a few weeks in any event. What I can anticipate we are not seeing trends substantially different from the one of Q3, so we need to. to keep on executing. The performance so far has been not different in line. We need to remember a couple of things adding into Q4. First, as I said before, and that was also your third question, is effects is steep in terms of delta between reported and organic in Q4, because if you remember, we had a USD around 103, 104, and that from November through January, that was Probably the strongest moment for both USD and remain big and we last year we had a very solid Q4 with high single digit organic in DTC. Anyway, having said that, the trend is not that different so far in terms of China giving color can give you colors by geography within GCR and some by cluster spending. So first we are seeing. We are seeing that the top of the pyramid guests are performing well also in China, both on the most sophisticated and high price point suits. So we are seeing good traction on the top of the spending. We are not yet seeing solid, consistent, indication on traffic and more affordable spending. That is what we are seeing. From a geographic standpoint, we can report some improvement on Hong Kong in terms of trend. We see the call it second tier cities and performing slightly better. So I'm taking out Beijing and Shanghai, the other important cities, Kodi Cheng, Shenzhen, Chengdu, Anzhou. Those cities are slightly performing better than the two big ones. But again, as I said, as Paula said, the environment is volatile. That's why we want to be cautious and that being cautious means for us betting on open to buy for next year, betting on CAPEX and OPEX for next year and possibly also And that is something we already mentioned. We have been pruning the landscape of our network by, wherever meaningful, trying to consolidate the business in fewer better stores. This is something that started in 25, will continue in the next couple of years.

On Forex Impact in 2026, while we can comment on our Forex

Of course, the impact does exist because we edge, but you have some mitigated impact on the bottom line. This year, I think we have edged particularly well, both at USD and Renminbi this is very true for fall winter 25 is also true for spring 26. So now the topic will be on how we handle prices in fall winter 26 which will be the second part of the year. So the edging covers at this point we are happy with the edging we have done through spring 26 included.

Thank you. I don't know. Thank you. Thank you, Anthony. Thank you. The second question, operator, or set of questions. Thank you.

Thank you. Our next question comes from Adrian Diverga with Goldman Sachs. Please go ahead.

Good afternoon, Gianluca, Paola, and Alice. Thank you very much for taking my questions. I would also have three, if possible. So the first one is if you could please provide us with a bit more information on the consumer environment across regions. So you already commented on China, but if you could give us a bit more on the US and on Europe, especially around traffic, conversion rates, and appetite to spend. My second question would be about the wholesale sector and the trends you're seeing so far in the second quarter and ahead of 2026. Is the rationalization of the channel almost done? And do you expect it to be finished by the end of this year? Or could we still expect some impact into next year? And maybe my last question would be on Tom Ford. Could you comment on the performance there and on the integration of the brand, if you could provide us a bit more color around this? Thank you very much.

OK. OK, so three questions are very, let's say, articulated on the consumer environment and cross region. Maybe I just comment quickly on the by cluster performance and then leave Gianluca to elaborate more on if he has comment then on all sale from Brown and for performance I leave to immediately directly to Gianluca. So on by region, so what we have seen in the third quarter is a continued solid growth by cluster of double digit growth of the US and the European cluster. And as I commented during the call during the first part is like improvement on the GCR cluster to a mid single digit negative. I have to say that in the Americas, US continue to remain very strong, but also LATAM. This is driven by, I would say more than by traffic. Of course, traffic in our store is always, but really by the very strong work, good work that our people are doing. And of course, the very well acceptance of our collections and the product, because everything starts from there. And I have to say, I would say the same in Europe. Of course, in Europe, you have Middle East that continues to remain very strong, but even Europe, excluding Middle East, has done very well in the quarter.

In terms of wholesale, I think that most of the effort has been done in terms of selection. especially on the Tom Brown side. If I recall what is, which are the numbers of this year, we don't set numbers for next year, but we start from this year having Tom Brown declining 35% and mid single digit, mid teens, sorry, mid teens for Zegna and around 10% negative on Tom Forrest. This is the result of different things. The conversions that will continue next year selectively, of course, depending from, for instance, with some US wholesalers, we are debating location by location. This will continue probably to a lower extent because most of the conversions we have already done, but the conversion trend will continue as long as we will find the opportunity to do it. There is still a selection of distribution on iconic items for Zegna. and we are pretty much happy with the distribution at this point of through wholesale but definitely we will continue uh limit as much as possible our iconic items that we we would not like to be resolved at discounts or in distribution markets that we we don't want and and tom ford minus 10 Will be overall. I think the comment for next year I think will continue some decline, but we're much lower intensity. That is my wish that that driven by conversion driven by the fact that we keep on selecting distribution on Tom Brown. Of course not to the level that we have seen in the last two years, so I think that we will see a much more muted decline still for next year. Of wholesale channel.

OK, don't fall fashion the last one overall performance. Any comment? I don't know. I don't know if there was something specific about the performance. As we said, the quarter has benefited from several factors, but for sure the good acceptance and good reaction of our clients. of the first Heidegger-Ackermann collection for Tom Ford that I remind you is the one that showed in Paris in March, but touched the floor in the stores, as usual, a few months after. So it was introduced at the end of August, and this created, in particular in the US, but in reality also in Europe across all the regions, uh very nice vibe and um uh so our our uh clients are customers uh loyal so existing class uh customer also new one um and uh came and and and both and patches the the collection so this has been for sure a positive factor, but the second one is the openings that we have done, some nice openings that are also providing good revenues results. And as I was saying, of course, in the past months we have invested in the platform, in the people, in starting to create a CRM system. So we are still at the beginning, but all this step by step has done some and is doing some results. still at the beginning as we said.

Just at one point you have seen DPC in Q3 at plus 16%. We want to clearly there is a space, but there is also substantial component which gives us comfort because we start seeing traction on assortment planning on on training of the people, the people on the field, the return management. So we see the growth of DTC is not just space. There is an important component. On the wholesale, linking to what we said before, the decline, for instance, there is the impact of a few conversions. I named the most important ones last year. In Q3 of last year, we converted sacks, women, Uh, we converted adults men. We converted Puerto Banos in Spain, so some some part of the new pump comes also from this conversion of wholesale locations that have been. Uh, re redirected into. Uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, It may have very strong GCR for those from a small base as shown an interesting sequential improvement. So we report positive comp wholesale affected by these three important conversions and good performance in the major regions for the brand.

Yeah, that is very helpful.

Thank you very much. Thank you. Thank you. The next one operator.

Thank you. Our next question comes from Oliver Chen with TD Cohen. Please go ahead, Oliver.

Hi, this is Nicholas Sylvia on for Oliver. Thank you both for taking the time, Gianluca and Paola. I know you just touched on the wholesale distribution. So continuing on with channel distribution, could you comment more on how Zenni is leveraging the direct consumer network to drive growth? And then a second part is, you know, with FX impact, I agree that's definitely a headwind that we've seen across the sector. Could you touch more on how you're offsetting those costs and currency pressures that are posing a headwind in light of the recent tariff impacts that you mentioned? Thank you both so much.

Sorry. We need to ask you to repeat the two questions because we couldn't really get the line very clearly. If you can repeat maybe one and the other. Sorry for asking, but really there was a lot of noise.

Of course. Is this better?

Much better. Much better, yeah.

Excellent. So, hi. Starting over here, this is Nicholas Sylveon for Oliver. Thank you both for taking the time, Gianluca and Paola. I know you touched on wholesale, so continuing on with channel distribution, could you comment more on how Zend is leveraging the direct-to-consumer network to drive growth? And then just the second part I have here is with FX, I agree that's definitely a headwind we've seen across the sector. Could you touch more on offsetting those costs and currency pressures that are posing a headwind in light of the recent tariff impacts? Thank you both so much.

okay so um the first one is uh in particular on xenia dtc network and the evolution if i got it correctly and the second one is uh um regarding forex and how given the forest doing how we are offsetting the cost of our tariffs uh increasing the us um so um i'll leave to gianluca we drive a positive trend on the on the retail side i think i give you some

some uh some comments distinctively from boutique and outlet so i start from outlet which is probably the easiest one that is not a driver of growth it's on the opposite is a is a channel that we keep shrink shrinking as soon as we see the possibility to do it and the driver there is of course the sell-through of the season of course we are Our internal KPI that we monitor carefully sell through at full price because then it doesn't do any bargain at this point anymore. So as soon as we have good level of inventory on end from leftovers, we reduce the outlet channels. So that is. A driver of non growth within within the retail environment on the full price boutique. Yes, we have this year. The number that you have seen It's mostly comp. First, to remark, the number that we have reported, it's 7.4%. It's a growth organic. It's, I would say, almost entirely comp. And what is the driver behind the comp? It's conversion. Of course, we need to work, and that's the CRM machine that is behind the scenes. course, we cannot enjoy in this moment in some areas of our market traffic. So we need to generate ourselves the traffic. So the outreach is laser focused on bringing clients in, preparing the appointment with the selection for them. And this is the driver behind a good improving conversion trend. On the other side, so this mitigates in terms of number of tickets, mitigates the decline coming from traffic. On the other side, the value of the tickets is increasing. It's increasing through AUR because we are elevating the offer in every season, whether it's values, whether it's the personalization, whether it's second skin. whether it's new leather outerwear pieces that are coming out or the enlarged collection of Conte jackets. So AUR and conversion are the two numbers that are driving up the comp this year. Space so far has not been a point. I think that we still have some opportunities in terms of space going forward. For instance, Zegna next year is expanding the network in U.S., which is still, in terms of distribution, still not fully exploited. So we will have at the end of the year, for instance, a location in Troy, Michigan. We will have next year San Diego. We will have Scottsdale. We will remodel Ballard. So there are still interesting opportunities in U.S., Not as much in China as we said. It's probably the other way around. Where we will try to consolidate so. Space we might be a minor factor, so we need to help ourselves with comp as we have done so far. That is, that is the algorithm and the logic behind our performance on DTC. In terms of effects, uh how we protect ourselves but the mechanic is always uh we we fix the the logic is always that we fix the currency for the price list months in advance we we defend that price list so that's why we have now at this point during we did the selling campaign of spring 26 was in june of this year we set the FX at that time, and now we are basically fully covered at the good currency rate.

Which means that we protect the Selene margin.

We protect the Selene margin. Then the rest is self-protected because you have OPEX and you have the revenues offsetting. Of course, as I said, now we need to add into the full winter 26. Our mind mindset is always to stay in a low. Made single digit. Growth of prices. We need to consider if this is enough everywhere. Probably there is also the tariff component in US which might bring us a bit touch up upwards. But definitely these are. These are the mechanics that we use to defend ourselves in an Currencies.

Yeah, it's nice. It's nice also to underline that we did in September this year, sometimes increasingly because of the tariff. I do, as you know, and the reaction from the customers were very positive, so the there was no other say negative reaction. Of course, everything that we we do in terms of. Pricing fees has to be, you know, always is an elaboration and an analysis done by the merchandising team looking at the full price collection and protecting, you know, the important price point of every collection. This is part of the job that Gianluca Gildo and the merchandise team does do every season, every collection. I don't know if we answered them.

Yes, that's very helpful. Thank you both.

Thank you. Thank you so much. Sorry for asking again. Next one, operator. Thank you.

Our next question comes from Chris Wang with UBS. Chris, please go ahead.

Hello. Hi. Thanks for taking my questions. I have three. The first one, just to follow up on the Q4 current trading commentary, If I look at your group DTC channel performance as a whole, the improvement in Q3 pretty much was in line with what your comps would have suggested. So in light of the very impressive Q4 you had last year, and Gianluca, I think your previous comments around trends so far and change in the fourth quarter, would it be possible that perhaps in Q4 we continue to see a high single-digit PPC growth at a group level? So that's the first one. Secondly, on cluster, I just wanted to clarify a little bit here on the Chinese consumers, if it's down mid single-digit or a high single-digit. And related to that, so it seems like the Chinese consumers really accelerated in Q3 when the total ZAN DTC is kind of in line. So what other nationalities are probably moderating or normalizing a little bit, if you can give some color on that. And last but not least, H2 margins. I think on the previous call, H1 call, you commented that for the full year, you're expecting the ZAN segment margins to land between 13% and 14%. But if I heard correctly, the 7% growth in DDC in Q3 you said was mostly driven by comps. So that is quite a good number to really see some operating leverage. So I'm just wondering if there's any update on the margin expectations you can give us for the Zangai segment for 2025. Thank you.

OK, Chalky, so thank you for the three questions. So the first one is on the follow up on Q3 and and in particularly if and this is a question that you direct the right little John Lucas. If we can deliver on a high single digit Q4 growth for DTC. The second one is on the Chinese cluster and then. we go after. I'll ask Gianluca to comment the first one in the meantime.

From the Chinese cluster, the Chinese cluster has seen a high single digit negative, and we have seen more stronger decline on Chinese abroad, although smaller in terms of incidence for us. The decline is being steeper for Chinese buying outside of greater China region. But anyway, on overall has been on the I single digit environment in terms of Q4. I don't want to comment on the. On the expectation by channel by brand because it's then it's it's conceptually we are trailing. Not different than what we have seen in Q3. Of course we need to know that Last year we had a solid performance, so it will be more challenging, but so far so far I would say same trend than Q3. And if you want to add an indication, I would probably stick. Other than by brand by geography, I think that the consensus out there today is reasonable, so overall. I think the consensus that is out on the our website that we report for full year revenues looks. A good a good indication.

On Xenia margin for full year, Chris was reminding that the comment we made in September that we were expecting Xenia margin around 13-14%. Of course, Chris, this was an indication we gave. I don't think this is the place at the moment to comment on margins, but just reminding you that the growth by POMP is not something that is coming as a surprise. For Xenia, it's something that is planned in our expectations and in our numbers. So it's absolutely a nice, very important growth, but it's aligned with the Or at least the following, let's say our expectations. Maybe a little bit better, but. How much? OK, I don't know if we answered this. If you don't have any follow up, we can go to the next one.

Yeah, sounds good, thank you.

Thank you. Thank you. Our next question comes from Chiara Battistini with JP Morgan.

Please go ahead. Hello, thank you very much for taking my questions. I have a couple of follow-ups and maybe a curiosity, but first question on Xenia. If I can follow up asking about the price mix and volumes and also the evolution for the Xenia brand between the recruitment of new consumers versus returning customers, what you're seeing from that point of view. The second question follows up on Tom Ford, and I was wondering, given all the initiatives in place, the fact that the product under the new designer is ramping up the CRM and also the ongoing store rollout, is there any reason why we should not be assuming further acceleration sequentially for Tom Ford into year end and also into next year from a DTC perspective? And then finally, more of a high level question. There's been a lot of debate in the market lately about the debut of the new fashion designers at different houses and this potentially reinvigorating and reigniting desire for bolder fashion and more outstated fashion. So potentially penalizing more understated brands. So I was wondering if you could share your views about this ongoing debate that there is in the market at the moment. Thank you.

Thank you Chiara Chow. OK, I'm in the price mixer on the price price mix volume evolution for Xenia. It's there is OK. Try to make this very very important. But I I I asked her look if he wants to to comment more also on the returning customers. On the top for the further acceleration, why not? Let's let's ask Jen Luca. And on the third one, sorry, Chiara, the theme and the debate is, if I understood well, but I'm not sure, that designers are becoming even more important for the brand or that there was many changes in the design? I'm sorry, Alicia is looking at me and saying, no, you don't understand anything.

So, sorry. Ciao, Alicia and Tucci.

No, I was wondering, because there's been a lot of renewed enthusiasm around potential fashion trends and the reigniting appetite for bolder fashion as some of the new designers or designers have moved out. Yeah?

Yeah, get it, get it. Thank you.

Thank you. I start from Zaini. I confirm that price mix is the biggest driver. Mainly comp is coming from price and mix. Of course there is the like for like price increase. And as I said, the mixed component of elevation of the content of the collection is the other component. So price makes is the major driver of calm in terms of returning recruiting new. We are seeing a. A good traction in in new clients, especially on retaining new clients. Of course there is always someone coming in walking. The point is whether you create stickiness. You create a stickiness that you bring them in, possibly through triple stitch, possibly through a knitwear, and then little by little, some of those go away, some return. The ones that are returning are our focus, and we see good numbers over returning new clients, and especially the objective is elevating this client. So what we are always looking at is, spending by cluster. We we try to identify by the type of product that they buy if they have potential and we intensify our activity around them in order to bring them above the 10,000 above the 25,000 threshold and finally above the 50,000 threshold. That is our denier friend territory. So we of course the numbers. We are growing very well on the clusters above 25,000 on the lower spending. We see a good traction of returning new specially people that are coming in, maybe coming back to buy a second pair of triple stitch or buying starting to buy a more broader. Total look, so I think it's a. It's a healthy proposition of. A client staying, client entering and staying with us for a longer time.

On Tom Ford fashion and the Q4, why not further acceleration? OK, I asked Gianluca to answer, but I just, you know, remind you two things. One, of course there is always a sort of wow effect when you have a new collection and this is something that we want to continue to keep it, but the first time normally it's a little bit more sound or stronger. This is normal. It happens like this. But the second one is also for Tom Ford. The Q4 last year was a little bit more dense in terms of performance. So that is also for Tom Ford's fashion.

a a a base of comparison effect and uh i leave john luca if uh any further comments also on what we are doing on top for the fashion i think that the solid double digit growth like we did in q3 is something that we are happy with especially because it's partially generated by com yeah i think that that that run rate i think it's something that we we are definitely pleased with What we are doing is injecting into the machine of Tom Ford some of the lessons learned we have done with Zegna. For instance, we are injecting more and more CRM logic and approach. I think that the team is with the logic of Tom Ford, but trying to intensify the drops of product In order to create the reason why they call the clients back. I think that in Tom Ford as we as I called out on Xenia we have we see the opportunity to increase their presence in the successful US market. So next year Tom Ford will open stores in US. We are also, I think we mentioned last time, we are working on a store in Paris. So there are different arrows for Tom Ford distribution. In terms of assortment, the collection, the team is working hard on the women's side. That is the biggest opportunity, both on the day wear as well as on shoes and handbags. So those are the areas of opportunity, the distribution, as I said, notably on the Western world. And there is, I think, some mechanics in terms of merchandising, in terms of CRM that we are injecting cross-fertilizing across the different brands.

On the third question, Chiara, I started giving my review, but of course this would be better off if Gildo would have been here, but the next time you can ask him as well. And of course Gianluca will also give his own view. This is a debate that we are in terms of fashion. Well, I know people like to talk about quite luxury fashion and And I think the reality is that innovation is what clients and what the clients want. Innovation has to be coherent with the brand's DNA. So Zegna is an innovative brand. We innovate in terms of garments, we innovate in terms of style, but as also our creative director explains, and actually there was an interview yesterday on a newspaper, The Innovation Council always taking in consideration what was presented. the season before. So it's not changing everything, but it has to grow within the DNA and within, you know, the legacy of the brand. And by doing this, you create a stronger brand, but also something new for the clients. So I don't think there is, you know, clients don't want to buy always the same things. I don't think so, but they want to buy something that is reasonable, that has a meaning behind that, that has something that goes just is not only an environment, but it means something because of the quality because of how it's made because of the values of the brands. And this is what I think is true today as much as in the past, maybe not always, but in in many Period of of of the history of the sector. This is my view, but sorry. OK, I cannot talk for our CEO here and I I actually would be very happy to have him out web. The same question I presented to him in in February for the full year results. I don't know if Gianluca is. I think.

OK, thank you Chiara. I don't know if there are any questions.

Thank you. Our next question comes from with Bank of America. Please go ahead.

Hi. Hi, everyone. This is from Bank of America. And thank you for taking my questions. I have two quick ones, actually. Is there any way you could help us quantify the impact of Haider's new collection on the acceleration this quarter, given you said that there is the initial wow effect that exists? And how should we be thinking about the piece of product rollout for next year as percentage of revenues for the brand? And my next one, could you please comment on your thoughts about full year EBIT consensus as well like you normally do? I know you commented on revenues, but what about profitability? Thank you.

OK, so thank you for the quick the two follow up. So in terms of quantification of either in the acceleration of Tom for fashion, I would, I mean, I'll leave Gianluca to give you some qualitative, but, and I think it's something that we will repeat what we said, but no, I don't think there is a, not a way, but clearly, yes, there is a one effect, but Haider is designing, you know, the collection, also the next one, and plus it's not only, there is, as we were saying, is a a let's say a work together with having better people in stores having better instruments in terms of CRM having a better collection not only the either one but also you know the the the one that is we we call it tre but is not the show one so it's it's having better merchandise in store so you know being better in in buying for the store so it's and also the the the marketing and the visibility effect that um the collection designed by either as as um as created so it's a mix of of of everything um but i leave john luther to comment a little bit more stuff to identify what is the the specific driver coming from the either collection let's remember that east

his part was mostly on the winter side that came through the quarter so not at the beginning of the quarter so there has been definitely part was either part was also the collection that was before the drop of the show collection that came i think it was around uh it was the june june july july to divide the fold, but the collection of either.

No, I never had the whole.

Yes, yes, yes, sure. Of course there is part of the quarter has been impacted by the specific fashion show collection. Part was before, so I think it has. It has had an effect in terms of curiosity to visit the show. Visit the collection of the show, but it's not only that one that thing. In terms of consensus, I would reiterate what I said on revenues. I think that the consensus on full year for EBIT looks pretty reasonable. Of course, I mean, always the line of thinking that we still have a couple of months, which for us are still very important. and therefore it's subject to the performance of the coming two months. But we think today that the consensus out there on revenues and EBIT looks pretty reasonable.

Thank you. And if it's OK, Dasha, we Asked if there are other questions, otherwise no, no, I think I think that's good.

And can you just comment on percentage of revenues of new product for Tom Ford throughout the next year?

Oh yes, so OK, the the the drop or the let's say the the delivery of Tom Ford collections.

There is a we will have I think on. November 2nd part of November 1st injection of spring. And then the second will be in January, so the next will be. I don't remember the specific date, but will be around mid November should be the. The first drop of spring 8 in the floor.

Yeah, remember that the first drop is always the no show collection. We call it play, but in any case apart from that is the most important part. In any case, because the collection show for everybody for any fashion brand then represents. It is more like not as small, but a smaller part of of the collection for the whole season. Thank you and the one that will come OK. Thank you, Dasha. If there is the last one, I think, because I know there is also another company reporting in Altenauer, so we might give you the time to prepare, if anything. But if there are questions, we're very happy to answer.

Thank you. We have one final question, which comes from Bumi Kanabar with Jefferies. Please go ahead.

Hi, Gianluca, Tal, and Che. It's Bumi. Just two questions from me, if I may. So number one, could you add a little bit of colour on what you're seeing in APAC-X China, given the very slight sequential decline there versus H1? I think every other region was an improvement. I know you mentioned Korea and Singapore, but any other regions to call out that didn't go as well? And then number two, you mentioned you're happy with EBIT consensus for the year, but I just wanted to ask on gross margin. It seems that given the share of DTC revenues in the nine months, There's a little bit of upside there. If you could comment on that, thank you.

OK, um, leave your look at our bully and for the color of my pocket XGPT as XGPT and. And a bit consensus. Oh, I'm sorry, gross margin consensus, not even on.

On aspect I I would. Call out, of course, Singapore is doing well, both for Zen and also we have a new store of Tom Ford that is picking up after the opening. So I think we are seeing good momentum there in Singapore overall. In terms of Japan, I would say that we still see softness, especially on Japanese residents. buying in Japan, which is the majority for us. So we still see some softness. In Korea, we have seen some slight sequential improvement compared to the second quarter. Macau, we are not seeing good momentum. As I said before, Hong Kong, yes. Hong Kong, both traffic and also top line. And China, I think I commented already before, so I mean, I don't have any other major. Australia is. No, no, no, not so important for us. In terms of what was the second question, was the gross margin consensus.

So she said that I understand you. You are OK with the bit consensus. Are you OK also with the gross margin consensus, which is that?

around 67 you know 67 i think so yeah we are i think that overall the consensus directionally meaningful from what we say i think if you say we have an upside an ip2 year we will see at the end of the year if you are right and for the time being i would stick to the consensus perfect great thank you thank you bonnie

I don't know if you have any, otherwise I'll leave to the operator.

Thank you. We have no further questions and so Paola, I'll hand back to you.

OK, so as usual, thank you so much for all your questions. We are here at your disposal for any follow up that you have and we will rejoin together on February 2nd for the full year 2025 preliminary revenues. Thank you so much for the time you spend with us and speak to you soon. Ciao.

Thank you everyone for joining us today. This concludes our call and you may now disconnect your lines.