Good afternoon, and good morning, everyone. Thank you for joining the Ermenegildo Zegna Group H1 2025 Financial Results Call. Please note that today's material and presentation are available under the zegnagroup.com website. Joining us today, the Zegna Group leadership 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 2 of today's presentation. I will now hand over to Paola Durante.

Thank you. Thank you, operator, and good morning, and good afternoon, everybody. Thank you for being here today on our H1 2025 results conference call. As already has been said by the operator, I'm Paola Durante. And here with me there is Gianluca Tagliabueour, our CFO and COO; and Alice Poggioli, IR Director. I will briefly comment on first 6 months financial results, and then we'll leave the floor to Gianluca for some final remarks. First half 2025 revenues have been confirmed at EUR 928 million, minus 2% organic, driven by a good -- a very good plus 6% DTC organic performance. But I will skip commenting more on revenues since we have already seen and commented during our call at the end of July. So let's then move on the presentation at Page 7. First of all, we start deep diving on our metrics, looking at gross profit. First half 2025 gross profit reached EUR 626 million with a margin on sales of 67.5%. The 110 basis points margin improvement has been driven mainly by a better channel mix since the DTC revenues generated 82% of our group branded revenues, which is higher -- 6 percentage points higher compared to the 76% in the first 6 months of 2024. And as you know, you perfectly know, DTC gross margin is higher than the wholesale. Moving to selling, general and administrative costs. You know that these costs are, on the other hand, the other face of the coin when strengthening the DTC channel. These costs reached in the first 6 months, EUR 502 million, in line with the EUR 498 million in the first 6 months of 2024. The incidence on revenues has grown to 54.1%, which compares to 51.8%. And this higher incidence on revenue has been largely driven…

Thank you, Paola. Good afternoon, everybody. Let me give you a brief update on the actions that we did in the last few weeks since we last spoke before going to the Q&A session, starting with Zegna. We just launched the Zegna Fall/Winter '25 marketing campaign labeled, it's not a suit, it's a Zegna. For Fall '25, a new chapter is being presented rooted in a century of style. The focus of the campaign is Zegna Torino, the suit that comes directly from our founders closet, and we made it with our unique new fabric, Vellus Aureum, the finest wool in the world. In the campaign, the Torino suit is matched with Vetta shoes that are the winter version of our Triple Stitch to create a unique charismatic and in one word, Zegna Look. The campaign accompanies the launch of Drop 2 of the Fall/Winter collection, which has received in the stores initial positive feedback since we began presales and preorders a couple of weeks ago. Moving on to the Zegna DTC network. We are pleased to announce the opening of our new store in Miami Design District, marking another important step forward in the strategic expansion of our presence in the U.S. market. Additionally, we just opened a new [indiscernible], which are the permanent by appointment stores for our very important client at Plaza 66 in Shanghai, bringing the total to 3 globally following the openings in Shin Kong Place, Beijing and Paragon, Singapore. As you know, as I said, the [indiscernible] is a by appointment-only store, offering exclusive collections that you don't find in the regular stores and a unique shopping experience that reflects the essence of Zegna luxury and personalization offer. Moving to Thom Browne. We just launched the Fall '25 campaign, which in line with the…

Thank you, Gianluca. Please, operator, can you open to the first question from our audience.

[Operator Instructions] Our first question comes from Anthony Charchafji with BNP Paribas.

It's Anthony from BNP. I have just 2. The first one would be on the current performance in terms of margin. It seems that the gross profit margin is still continuing its upward direction since last H1 '24. Could you maybe give a bit more color on the bridge of this plus 110 bps, maybe given the pricing FX impact on top of channel mix? That would be my first question. And also if we should still see 67% at least gross margin in H2 despite the tariffs? My second question would be on H2 and I would say, expectation. So thank you for giving a bit of color on the current trends. It seems that consensus is expecting close to 4% organic in H2, which is a nice improvement from Q2. You already commented that you were happy with consensus being around EUR 173 million at the EBIT level, which would imply a flat margin. Are you still expecting this development in terms both of top line and margin? That would be my second question.

Thank you, Anthony. And I'll leave clearly all the 2 questions to Gianluca, the first one on gross profit, both analysis on the first half and what we expect for the second part of the year and then on the consensus expectations.

So gross margin -- Anthony, by the way. Gross margin, the evolution is definitely a result of the DTC revenues that are reaching at this point 88% versus 86% last year. And within the DTC, we have been pushing, I think we have discussed many times also the quality of the DTC. It's not something that we report, but we carefully monitor the sell-through and sell-through at full price, which definitely is a step ahead on the Zegna brand versus the other 2 brands. But in the 3 brands with different level of maturities, we are pushing up the sell-through, implicitly creating the opportunity to reduce the number and the incidence of outlets. So those are -- one number is evident, the DTC weight within the DTC is the quality of the DTC that is the underlying factor that is helping us move forward the gross margin where we think we deserve to be. And apart from channel, of course, the journey of personalization is also a driver, the fact that we are able to transfer into the price, the quality and the service unique that we deliver to our customers. So I think that is an indicator -- a synthetic indicator of our ability to stay full price and be recognized for the quality that we deliver. In terms of H2, if you remember, we indicated a low single-digit growth on the revenue side for the year. We confirm that in organic terms. So we clarify that in organic terms when we provided the indication in the USD-euro and renminbi-euro were very different from today. So of course, we need to take this into account. And today, the consensus that we see at EUR 1.923 billion, I go by -- no, but it's the right number, EUR 1.923 billion. We believe that correctly reflects also the change in currency. So if you look at that number on an organic basis, corresponds to low single-digit organic. And on the adjusted EBIT, I think that our -- the consensus that we have in front of us that is EUR 173 million indeed is incorporating the same thing about the currency swing. And we believe that this adjusted EBIT at consensus EUR 173 million is realistic.

Okay. Anthony, I think we answered, but if there is any follow-up, we are here. If not, we can go to the second question or the second analyst from the... Operator for the second one.

Our next question comes from Oliver Chen with TD Cowen.

This is Tom Nass on for Oliver. I wanted to ask about the margin improvement in the Zegna segment. Specifically, if you could speak to some of the opportunities you think may be on the road ahead as to where segment margins could trend over the longer term? And then as a follow-up, I wanted to ask on margins in the Thom Browne segment and the progress you've been seeing there with the wholesale rationalization. I guess, more specifically, how should we think about modeling margins in Thom Browne segment over the long term?

Thank you, [ Oliver ]. Thank you for the 2 questions. They are both on operating margins, on EBITDA. The first one is for Zegna and the opportunities on the long term. And the second one is on Thom Browne. So again, Gianluca is your man.

Yes. In terms -- [ Oliver ], in terms of margin for Zegna, we were able to bring it up at this point higher than the 14%. If you ask us what is the journey of this, let's be mindful that we keep on investing on Zegna, we will have also investment. So we need to decouple short term from long term. If you talk -- if we talk about short term, we don't commit to a specific number, but definitely, something between 13% and 14% is the number that we see as the number for the year. Definitely, the journey of growth for Zegna needs to go, we have always mentioned the 15%. That is the first step we need to get. So we see the potential for the brand to get there, not for the year. For Thom Browne, of course, we have paid the bill of the minus 52% of wholesale in the first half. We have declared that for the year, the decline of wholesale will not be minus 50%. We see the second half reducing the decline in the range of minus 20%. So the impact in the first half has deeply been affected by this step down of revenues, which were very higher -- much higher in the first half -- first quarter of 2024. And of course, having on board, Sam Lobban as the new business leader, bringing and injecting what we want to be a DTC-centric approach starting from merchandising, starting from training in the retail and all the different levers that then bring to life the stores is what we are betting for Thom Browne to bring -- to bring Thom Browne back to a double-digit EBIT that is where it should belong.

Perfect. I don't know if, [ Oliver, ] we answered your questions or any follow-up. Otherwise, we go to the next one. Operator, is there any other questions?

Our next question comes from Chris Huang with UBS.

I have 2. The first one on current trends. I think, Gianluca, you previously touched on some early signs of improvement when it comes to the Chinese consumers. If I remember correctly, Q3 was the quarter last year when you started to see meaningfully easier comps for the Chinese consumers. So can you maybe help us understand a little bit more on the signs you're seeing? Is it traffic coming back? Is the conversions is going up? And can you also confirm if Chinese consumers in the first 2 months of the quarter is -- I know it's still declining, but are we talking about maybe less than double-digit decline in the single-digit area? And secondly, on margins, just as a follow-up to the previous question on Zegna segment. If I heard correctly, you said that for 2025, you're expecting Zegna segment margins to land around 13% to 14%. But that would imply H2 to see quite a bit of contraction year-over-year. And on the basis of probably more H1 weighted marketing investments, how do we square this equation?

Okay. Thank you. Thank you, Chris. Let's start with the second one on margin for Zegna, and I will leave Gianluca to answer. On the China current trend, we can give you some initial more comments or colors. But really, I would like to leave any detailed comment to our Q3 revenue results conference call that, as you know, is in October. This is not a conference call that is meant to comment deeply on current trends. So leaving to Gianluca on margins.

On margins, we know that we have some investments to be done in the second half. We have, for instance, an event in Miami around Art Basel to be done in December. So we have in front of us still 4 months that are uncertain. So we don't want to set expectations that can be disappointing. So the combination of 2, let us invite you to stay within that range. Happy to be -- at the end of the year to say that I was wrong on the upper side. But we know that we have -- we don't want to cut strategic actions. We want to keep on fueling the brand that is with positive tailwinds. So we don't want to squeeze the numbers of the second half of the year in order to deliver an EBIT on the short term. We see big potential on the long run of the Zegna brand. We see results. So we want to keep on having the right events, the right investments, and we are just cutting discretionary costs, not anything else.

And can I just follow up on marketing. Can you just confirm that for the full year group level is still going to be around 6% of sales?

6%?

Yes.

Yes, around 6%, Chris, for the group. Thank you so much, Chris, and leave it to the next one.

Our next question comes from Louise Singlehurst with Goldman Sachs.

Just 2 quick follow-ups for me, please. Firstly, on pricing. Can you just remind us where we are now going to obviously the Fall/Winter, the pricing that's gone through and any plans for the second half? And I suppose you referenced there is really on the commentary for the U.S. because we've been hearing a lot from the peers recently in terms of the luxury positioning, the price increases that have gone through so far this year, there hasn't really been any impact on volumes or any consumer pushback? And then secondly, I know this is a call, it's not about current trading or we're going to get recent trends. But if we think about that low single-digit outlook for the full year and where we are entering September, I suppose where is the biggest -- where is the risk that we still see? Is it more on the China aspect and the pace of recovery? Or is it more the expectations management across the different regions? Just quite interested to hear your feedback, Gianluca, because obviously, the U.S. is probably a lot stronger than we anticipated year-to-date. And hopefully, there are some tentative signs in China, but I know it's early.

Louise, so the pricing. Start from pricing, as we declared, we have been acting always on a low single-digit price increase. That's on a systematic approach to offset cost dynamics and currency dynamics. In Fall '25, when there was the addition of incremental tariffs, we have acted in order to reflect this into our U.S. Fall/Winter '25 prices, which have been live since August of this month. So we have simply taken care of covering the burden of incremental tariffs in U.S. We are not seeing a substantial boomerang from the consumers. As I said before, we keep on seeing good momentum in U.S. So we have not seen a change, an inflection point in our solid trajectory of growth in U.S., first in the Zegna brand, but also more recently with the either collection, we can say the same positive momentum also on the Tom Ford, also Thom Browne, despite being smaller in the U.S. environment, they have just opened some stores, but the business size is smaller. So that is the comment on the Fall/Winter '25 pricing. The second is -- Paola, remind.

The second was the outlook for H2 and where we see the main risk is China or..

China. It's China because we are still in a volatile environment. So we don't want to draw conclusion from a few weeks where we are seeing the trend less negative. So...

[indiscernible] easier base of comparison.

Easier base of comparison. So we want to -- we would be much more comfortable in a situation when we see China solid. As Gildo mentioned last time, we are entering the next year into a cautious mode that we have labeled as China into a new normal, Gildo mentioned that. So we want to think and we want to plan and be ready for 2026, which is steady to this year. So that is we are not banking on a rebound for next year of China. Then if it comes, we will be ready to take advantage and enjoy the growth. But we are planning to stay in this new normal situation through next year.

Thank you, Louise. Okay. Is there any follow-up questions? Any other questions from the audience?

We have no further questions registered. So Paola, I'll hand back to you.

Thank you. Thank you to everybody. As always, a very interesting and nice questions to us. We always enjoy spending some time with you. And because we enjoy, we will soon see on October 23. So let's see and catch up on Q3 revenues in 1.5 months. Thank you, everybody. Have a nice weekend.

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