Italy's Ermenegildo Zegna FY adjusted EBIT misses estimates, hurt by Saks Global bankruptcy provision

Overview

• Italy luxury menswear group's FY 2025 revenue declined 1.5% yr/yr, with 1.1% organic growth

• FY 2025 adjusted EBIT missed analyst expectations, impacted by Saks Global bankruptcy provision

• Net profit for FY 2025 rose 20% yr/yr, supported by higher financial income and lower tax rate

Outlook

• Company says Middle East tensions have increased uncertainty for 2026 luxury sector demand

• Ermenegildo Zegna remains focused on delivering 2027 targets despite sector risks

• Company prioritizes disciplined growth, strong cash generation, and rigorous execution

Result Drivers

• CHANNEL MIX - Gross margin improvement was mainly attributed to a higher share of direct-to-consumer sales, rising to 82% of branded product revenues

• WHOLESALE WEAKNESS - Revenue and EBIT at Thom Browne declined due to a 40% drop in wholesale channel sales and investments in new stores

• SAKS GLOBAL PROVISION - Adjusted EBIT was reduced by €10 mln provision for expected losses on trade receivables related to Saks Global bankruptcy

Company press release: ID:nBw7J4HWVa

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 8 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the apparel & accessories peer group is "buy"

• Wall Street's median 12-month price target for Ermenegildo Zegna NV is $11.70, about 26.5% above its March 19 closing price of $9.25

• The stock recently traded at 21 times the next 12-month earnings vs. a P/E of 23 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)