Ermenegildo Zegna N.V. Ordinary Shares

Good afternoon, good morning, everyone. Thank you for joining the Hermenegildo Zenger Group first quarter 2026 revenues call. Please note that today's material and presentation are available under the zengergroup.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.

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. 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 revenue, on organic revenue trend, because, you know, they better reflect the underlying business dynamics, excluding foreign exchange impacts. So, in Q1 2026, the group reported 417 million in revenues, which is up 7%, marking a sequential acceleration compared to the previous quarter. 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 GCR, Great China Region, at plus 5%. So let's turn to page 8, where I will focus on the performance by brand. 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. 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. Tom for 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. I will not focus on other revenues that you know are an increase in marginal business, so quarter-on-quarter percentages 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 all brands. And 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 positive plus 5% increase with a positive contribution from DTC at all brands. 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 has been solidly positive across all the three brands. 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. 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 BTB, please. All sale 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 Zegna brand, 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 fostered 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. Rest of APAC in 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 network by three direct operating stores. Looking at the wholesale, the Xenia 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. Tom Brown, page 12. In the first quarter 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, BTC performance, but not the only one. 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 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, first quarter trend should not be taken as a proxy for full year. As already anticipated in our previous call, we expect that Conbrano's sale in 2026 will be down a double digit, but less than what we have seen in the first quarter this year. Time for fashion. Let's move to page 13. Tom Hoare Fashion recorded a plus 9% growth in DTC, which has been driven by a consistent growth, a consistent performance across all regions, in particular in the Americas, that 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 two DOS, direct operating stores. Wholesale declined 3%, just a normal reflection of our decision to focus on the DTC channel. On page 14 you can find a summary of the GroupStorm network, so not much to add. But before leaving the floor to Gianluca, let me take a moment to highlight our main 2025 sustainability achievements. Full details on 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, but let's say I would like to highlight four of them. The first one is that at the group level, 42% of top priority raw material has been sourced from traceable and lower impact sources. 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. 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, trains more than 50 maestri, craft people who have distinctive expertise, and we prepare them to pass their knowledge on to future generations. Very important project, which is really important part of our legacy and included in our values. And with this, I hand over to Gianluca for his final remarks.

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 Paolo already mentioned, in early March, the brand introduced a three-color limited edition sneaker, which 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. Now, we aim to leverage this momentum and the launch as out recruiting new clients. Our goal is to make them, or at least a portion of them, thumb-round repeat clients. We see Jersey and NITWERK. 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. On the other hand, as Paula 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. 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. Founder suites are smaller 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. 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. 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. 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. Finally, on Tom Ford fashion, we already commented during the last poll on the success of the most recent 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. Under its 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. 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 two 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 franchisees 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. 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 Zegna brand, the revenue decline in the region, although down double digit, is more contained than the decrease in average most traffic. 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. 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. 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. 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 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 April. the market and the competition. 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. 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 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. 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. With that, we open to the Q&A session.