Good afternoon, and good morning, everyone. Thank you for joining the Ermenegildo Zegna Group FY 2025 Preliminary revenues 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 Gildo Zegna, the Group Executive Chairman; and Gianluca Tagliabue, Group CEO. 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 Gildo Zegna.

Good morning, and good afternoon, everyone. Thank you for joining today's call on our group fiscal year 2025 results. Before we run through our performance, I wanted to take a moment to express our deep appreciation to our colleagues in the Middle East for their dedication, professionalism and commitment during this complex period. On behalf of the group and of the Zegna family, I want to affirm our support for them and for all our friends and partners across the region. The Middle East remains an important region for our group. And although in the short term, we are adjusting our activities to reflect the situation, we expect the region to continue to play an important role in our business over the longer term, in particular, thanks to the resilience of our customers. Let me now turn to the business update, starting with the recent Tom Ford Fashion show, which, as you know, has taken place earlier this month. Haider Ackermann's third runway show presented in Paris on March 4 has been widely acclaimed. Haider has further demonstrated his ability to interpret the brand's codes and DNA in a way that is unique, contemporary and deeply personal. The selective elegance of Tom Ford, its craftsmanship and tailoring heritage and these iconic leather pieces reimagined with modernity were all powerfully affirmed in this collection, which also added innovative knitwear garments. I found the whole collection very confident and consistent in one word, very strong. And I want to extend my applause to Haider and to the entire team who worked alongside him to bring these shows to life. We all know that fashion shows are important, but they only translate into results when they are supported by strong production, commercial and marketing execution. We're confident that Lelio Gavazza and the Tom…

Thank you, Gildo. Good morning, good afternoon to all of you. Let's move to Page 7 of the presentation, where you find full year '25 results key highlights. The revenues for full year '25 have already been disclosed early February, and we confirm them at EUR 1.917 billion minus 1.5% year-over-year on a reported basis and plus 1.1% in an organic basis. In '25, the group reached a 67.5% gross margin and adjusted EBIT of EUR 163 million, which does include EUR 10 million of provisions related to losses on trade receivables for Saks Global Chapter 11 procedure. Thus, without this EUR 10 million bad debt provision, the adjusted EBIT would have been EUR 173 million. The group also reached EUR 109 million of profit, up 20% from EUR 91 million last year. More at the end of the year, the group had net cash surplus of EUR 52 million. Let's move to the following pages to comment more on these results. Page 8. In full year '25, gross profit rose by 90 basis points to 67.5%, driven mostly by channel mix with DTC that reached 82% of branded revenues versus 78% last year. And as you know, DTC gross margin is higher than the wholesale one. Moving to SG&A. SG&A in full year '25 reached EUR 1.034 billion with 53.9% incidence on revenues compared to 51.8% last year. This increase in the SG&A incidence is linked to the following factors: the investments in talent, systems and organization across different functions and brands looking at the long-term vision for each of the brands, store network expansions, in particular, for Thom Browne and TOM FORD. More, it has been impacted by the negative operating leverage caused by the streamline of the wholesale at Thom Browne. This SG&A line of EUR 1.034…

Thank you, Mr. Gildo. Thank you, Gianluca. And then operator, we open up for the Q&A session.

Our first question today comes from Chris Huang with UBS.

It's Chris from UBS. I have 3. Firstly, starting with the top line momentum. And I think at the previous conference call in Q4, you were saying that excluding the Chinese New Year timing impact, things are not seeing any meaningful change on a sequential basis versus Q4. So I'm just wondering if you can give an update on the latest trends you are seeing by different regions, nationalities, whatever you can provide. Secondly, on the margin, it seems like Zegna segment, excluding the Saks impact for the year, ended around 14.7% EBIT. If I look at the latest consensus, I think people are modeling around 14.1%. So are there any reasons why you believe that given the pickup in theory for like-for-like growth in 2026, you shouldn't be able to do a margin that is higher than what you did in 2025? That's my second question for the Zegna segment. Last but not least, I think FX moved a bit over the last few weeks. And I think part of your caution on 2026 margins was coming from the fact that FX is not supported. So I'm just curious to know if the recent moves of FX make you feel a bit more comfortable in meeting the 2027 targets in terms of profitability.

Thank you, Chris, and thank you for the 3 questions. I think the first one is for Mr. Gildo and is related to the current trend and an outlook or a comment across all the regions. Of course, I -- let's say, I anticipate that sales information will be more given at the end of April when we release the Q1 numbers, but very happy to provide a comment on the current trend.

Thank you, Paola. Overall, the year has started well with a trend slightly better than Q4 '25 in DTC. This notwithstanding the uncertainties we are facing in the past few weeks with the war in the Middle East. We saw a good performance in TOM FORD FASHION, thanks to the new spring/summer product and the continuation of a good trend also in Thom Browne, in particular, in recent weeks after the launch of the Thom Browne ASICS. Maybe a comment on China, where we are seeing some sequential improvement in the region; however, we remain cautious, and we continue to assume a flattish performance for the year. But we are satisfied with the performance of Chinese New Year, slightly ahead of expectation. So that we know what we have to do and we will adopt a focused store strategy to enhance the quality and efficiency of our DOS network in the region. On the other 2 major regions, in particular, the Americas, United States and Latin America remain very resilient, and we see a continuation of a good growth as we did last year. And I would say that also Europe looks pretty resilient besides the conflict in the Middle East. So overall, not a bad situation of the first 8 to 10 weeks of the year.

Okay. The second is for Gianluca, and it is related on the Zegna segment's EBIT performance.

Chris, so I think you pointed out an important angle that is, of course, that the profitability of the Zegna segment EBIT margin in the second half, if you exclude the Saks Chapter 11 provisions would have been close to 15%. So we are pleased of that step. We know that Zegna segment deserves stronger profitability still. We are working on it. But on the other side, we also know that we have projects critical to support the long-term trajectory of the brand, and we don't want to chase short-term quick results. So we are -- we observed with pleasure the fact that we get there. And linking to also your last sentence, it's true that in the recent weeks, when we talked early February, the dollar was 1.18 and now it's 1.15, 1.16. And the renminbi was at 8.10 and now is below 8. So we have seen some inflection point on currency, which should favor us. But still, if we compare '26 to '25, we are still in the mindset of having a couple of points almost around 2 points of headwind from currencies. So this is still a factor that will impact the group will impact also the Zegna side. So having 2 points of headwind from -- expected from currency definitely will be a dragging factor in the profitability. And that's why also I linked to one of the statement that I did last time that we want to see -- we are expecting to move sideline on the profitability for the group in 2026, taking aside the onetime provisions of Saks. So I think I put together the second and third question.

Perfect. Maybe just to clarify, so the commentary on Q1 DTC momentum, you're referring to an acceleration versus the Q4, which was 10% at group level. Is that correct?

It's correct.

Thank you, Chris. Second?

The next question comes from Adrien Duverger with Goldman Sachs.

I guess the first one would be -- sorry, again on the current environment. Have you seen any changes in consumer behavior in the last few weeks? I mean, I guess the real question is, have you seen any second order impacts in other regions? And within the Middle East, are you taking any specific initiatives to maintain your relationships with the clients there? Then my second question would be on the resilience from the higher spending cohort. Have you continued to see like an increase in the proportion this year compared to Q4? And if so, have you seen any differences by different geographies?

So in terms of current environment, if we have seen any headwind, any negative after the war.

No. As I said previously, not with the exception of the Middle East, in which the stores have been initially closed and then opened, but there is less traffic and there is less energy surely. And so customers are surely down quite a bit. I would say that we are scoring better than what we have heard. And so that shows the brand is very well placed in that part of the world. The event that we did last year, I mean, surely has created an incredible resonance of our brand. And I think that many of those customers probably will be buying hopefully outside the area and are the top resilient customers that we are talking about. So overall, with the exception of that particular area, I think that the rest is continuing the expected growth.

And the question on the third one was also related to which cohort and in particular, if the high spend are continuing to drive the growth.

We have a program around the world of personalization. So I think that we are becoming more and more known to do that extremely well and appointments and store events that goes beyond the Villa Zegna. So I think that, that could be a good flow of business of product that also you don't find in the store. So that helps keep the resilience of those customers high.

In terms of relationship or what we are doing with the Middle East customer, was also asking if there is something particularly that we are doing so far. I think -- in terms of relationship in the Middle East?

No, I don't think we have a good partner there. There's actually 2 good partner. One is Altair for Zegna and the other one is Chalhoub for Tom Ford. And so I think that we are following the happening very closely. And we know that they are trying to keep the mall as open and as active as ever. And so that's -- the partnership with local is important and to support them with the merchandise and with some local promotion.

And also the relationship that our client adviser has with all our customers, they continue is something that clearly help in this situation. Adrien, I think we answered to your questions.

Can I follow up with a quick question on pricing maybe in terms of what you're seeing for the pricing environment this year and if there is more opportunity to continue to drive higher pricing, both from like-for-like and mix?

No. As we said last time, we continue doing low mid-single-digit price increase on a like-for-like. We continue having an evolution of the mix upwards. That is our -- both as Gildo was saying, through exclusive collection, but also in the store in ready-to-wear, we keep elevating the offer. This is, of course, in Zegna, but also on the other brands. So I think the rule of thumb stays with a mid -- low mid-single-digit price increase in order to offset the cost factors.

No -- sorry, one addition in particular to Zegna is the drop strategy of coming up every several weeks with new deliveries and with product that looks different from the previous delivery, brings an incredible excitement to the store. I think that color is a driving force. I think iconic product and not only the Triple Stitch Prestige, but also other categories are meeting more and more the desires of customer. So I think that the outreach is very, very important. And to keep the interest of the store high, it's extremely a priority in times where overall, you see a little bit less traffic. And I think that the possibility to apply the same rules to Browne and Ford is very, very important. I think that the excitement that Haider will bring with the new collection is important to not only to retain Karakas, but to attract new customers. The possibility to have Thom Browne showing Milan. We know that Thom Browne has to strengthen its presence in Europe, in particular in the retail. And I think that having a show in Milan will enhance his brand awareness and his exposure to the local. So I think fine to expect the flow of foreign customer, but I think the key is work well with the local and have staff in the store that created this relationship that made Zegna so strong in the States and in other parts of the world.

The next one.

The next question comes from Chiara Battistini with JPMorgan.

I have a follow-up question on the situation in the Middle East. Notably, I was wondering in terms of the shipments of the merchandise to the Middle East, have you reduced or suspended shipments to the region? Or it's still business as usual from that point of view? And also a clarification on rents in the Middle East. Are they variable or fixed? That's my first question on the Middle East. The second question on TOM Ford, profitability improvement in H2. I calculate actually, excluding the tax provision, the profit release went back to positive territory. So I was wondering if you could expand on the margin drivers for TOM Ford in H2 and whether that comes mainly from gross margin or OpEx? And finally, can you remind us, I think you're highly exposed to the local spend rather than tourism, but can you remind us how much of your sales come from tourist spend, please?

I didn't get the third question.

Okay. So Chiara, maybe you can help us going through the 4 because I don't know if we fully understand all of them. But in any case, the first on Middle East in terms of shipments and rents, and I'll leave it to Gianluca to comment.

No, we are at the tail of the spring/summer shipments. So we have basically most of the collection already delivered before the end of February to the market. So we will have some tail of summer still to be delivered, and we monitor the situation. But this is the situation so far. So the product has been shipped until late summer deliveries to the market. In terms of costs, I think some relevant stores have variable with some fixed, but we are well above the fixed. So I think I would say it's more skewed to the variable than a fixed like a typical Western European street side store. So we have more variable than fixed, the rent. The Tom Ford, the second part, I think that we have -- as we said, we have built the infrastructure of TOM Ford at this point. So we have come to a certain point of we have built the OpEx. And I think we are -- we have been starting enjoying some good results in the second half and some scale. On gross margin, there has been also some step-up on gross margin linked to the effort that we are doing in terms of full price sell-through with the team, with the merchandising team, with Lelio Gavazza. And so I think it's a combination of the 2 things, quality of gross margin and the inflection starting to see some slowdown in the growth that we have done in the last couple of years to build the structure, both at headquarter and market level for TOM Ford. So I think this is, in a nutshell, the situation of the second half of Tom Ford EBIT.

The last question was on the level of tourists. Chiara, I didn't get if it's in general or you asked a certain area.

No, no. In general, I think you have a very high exposure to local consumption, but I just wanted to make sure what your tourism exposure at group level is.

It's minimal because, well, if you take Greater China, it's mostly locals. If it's America, it's low double digit the non-locals. Of course, in Europe, you have Europe, not Middle East, Europe, you have 30%, 40% -- so I think that is the -- our client base is, of course, for the intrinsic nature, especially on Zegna, but also Tom Ford and Thom Browne, which are skewed to men's, there is a big component of locals. So there is a big component of locals. There is a big component of the top of the pyramid. That's why, as Gildo was saying, of course, we see the uncertainty in front of us, but we enjoy also the resilience of our customer base.

Chiara, thank you. Next one.

The next question comes from Anthony Charchafji with BNP Paribas.

It's Anthony Charchafji at BNP Paribas. Three questions. The first one is that in 2026, not asking for a forecast, but within your portfolio, would you expect a lot of difference between the top line growth of the 3 brands, especially now that maybe there should be less impact from wholesale adjustments. Yes. So any -- maybe an update on wholesale and which brands have the most exciting prospects at least for 2026? My second question is about the gross margin. What are going to be the moving parts, notably channel mix? I'm not sure I understood the impact of FX when you said a couple of points, you said, was it about like a minus 2 impact on the top line? Or was it impact of basis points on the margins. And finally, on the Middle East, just to understand, so the exposure to the Middle East is mid- to high single digit. Within that, how much are people who are not originating from the Middle East? And then also the sort of opposite question, which is what's the percentage of Middle Eastern consumer spending elsewhere, notably in Europe to get an idea of the -- if I deduct and then I add to the cluster.

Okay. Thank you, Anthony. So on 2026, the comment -- I ask Gianluca to comment on the different expected growth by brand. And I think there was also a question on wholesale...

I start from wholesale. Well, first, I reiterate the fact that on the DTC, the 3 brands -- all the 3 brands are growing very well. And all combined, we are growing more than the trend that we have shown in Q4. So that performance is well balanced on the 3 brands. So that is to take out the DTC. On wholesale, we have said and we reiterate that wholesale is not going to be a driving force, will continue to contract in a different intensity by brand. Zegna, I would expect to decline by mid-teens, considering both our intentional icon protection and some still wholesale conversions. Tom Ford should be possibly negative single digit, and this is mostly related to sell-in to the wholesale partners in the Middle East region. Thom Browne will still be solid double-digit negative, although less than last year and of course, much less than last year in absolute terms. So at this point, the business of Thom Browne wholesale is smaller and the reduction and therefore, the impact in absolute terms to the business is becoming smaller and smaller. And the decline in absolute terms will be much less than last year. So this is in total. And linking to your second question of the 2 points, FX impact, it was related to revenues. Of course, then how this translates into the bottom line, you have, of course, also the OpEx deflating. So it's part of that. It creates an impact much lower, of course, than 2 points the FX, 2 points were related to top line. What was the last question?

There was a few questions on gross margin, if it was driven mainly by channel mix and then the impact on ForEx.

Well, the impact of the channel mix is definitely an important driver of the step forward. On the gross margin, the second driver that we are working heavily with the team of Thom Browne and Tom Ford is stepping up the incidence of full price sell-through. That is the second big driver of improvement for Thom Browne and Tom Ford. The last question was on Middle East?

Yes, on the nationality, how many are not local?

It can be empirical. It's an important part that we have people either traveling or resident there temporarily, but we don't have a specific number. So that's why also we expect to see some of them elsewhere. That is also an outcome of this because we see, of course, there are some residents locally there, but they moved to London to Istanbul. So we have been seeing people same customers there and elsewhere. That is also part of our safety net together with resilience because our clients are moving. So especially the ones that we have been serving in the Middle East.

Thank you to you. And, if there are other questions? Yes.

The next question comes from Oliver Chen with TD Cowen.

Regarding Thom Browne and Tom Ford, a lot of great initiatives. How is profitability at both moving relative to your targets? And what's realistic for us in terms of modeling those profitability profiles this year and then longer term at both of those? And then on the second question, consumer confidence and sentiment, we continue to see a really robust environment in the Americas. Would just love your thoughts on that as it applies to China and the Americas kind of different, what's happening?

Okay. The first one, I'll leave it to Gianluca on the Thom Browne and Tom for profitability in '26 and longer term. And on U.S., I'll leave it to Gildo after.

So if -- on the EBIT of Thom Browne and TOM FORD. So first, to give a qualitative perspective, both are enjoying growth in, as I said before, on DTC, and it's not just only for space, but it's comp. our current trend on those 2 brands. Part is the success of the new collections on TOM FORD. There has been -- and that is a very strategic important initiative. All the initiatives put together by Sam and the team is around making the most of the use of the merchandising drops -- and so for instance, in the first month, there has been put together drops in the Zegna-like way around denim, around ASICS. And these are -- especially the ASICS one is very instrumental to capture names of new clients that don't know the brand. So these are leading indicators for something improving in both the brands. In terms of profitability, on Thom Browne, of course, we have seen a second half that has been tough with the streamlining of the wholesale business and negative EBIT in the second half of 2025. We do not expect a loss of Thom Browne on the opposite to make it sure, we expect to go back to reasonable profitability on Thom Browne and still injecting talent in the organization, but we want to go back to decent profitability. And TOM FORD, we expect an EBIT performance to be better in '26 than '25 with a substantial improvement. Longer term, Thom Browne needs to go to a double digit, of course, EBIT margin. There is no way that it doesn't go back there. And TOM FORD, the same with the delta of royalties to be paid to the IP owner of the brand. So both brands enjoying a journey towards a scale that is much higher than the $300 million that we see today -- $300 million, enjoying scale, both at this point, they are ready to enjoy that scale and go to a profitability that needs to be double digit.

Perfect. And on consumer confidence in the U.S. and the U.S. market overall, I'll leave it to Gildo to comment.

No, I would say the confidence remains pretty good across the states. We don't see any negative. We planned another good year as it was last year in all 3 brands, in particular, Zegna and Tom Ford. However, also with Thom Browne, we are building a stronger retail network that should help. We have a couple of openings for both Tom Ford and Zegna across the year that will materialize and give us an even more homogeneous and stronger network distribution across the country. Maybe a word on Saks Global. Since it's a strong wholesaler of ours, I think that it seems they are moving according to plan. We have shipped spring/summer, and we decided to produce for winter. And so we keep our finger crossed, but we do believe that the Saks Global will remain an important partner of ours in the future to move ahead together. So we were reassured by the validity of the plan and surely, we supported them after having been hit last year, I think that we decided to support them from the beginning, and I think it will happen. Another important thing is Latin America. Latin America, we are one of the leader in luxury because the brand is known -- has been known -- I'm talking about Zegna now for many years. And the fact that we have relaunched our stores in the past few years, and we have a good network, in particular, of stores in Mexico and Brazil with a similar level of service and product that we have across the world, I mean, it makes that customer more local, which before it was buying all over the world. And so I think that it's quite incredible, the growth -- the percentage growth that we had in Latin America in the past 2 years, and it will continue. So surely, our attention will be not only in North America, but also in South America, in particular in those 2 countries.

In China, are you seeing encouraging traffic and traffic and conversion? Like how would you characterize...

I'm traveling with Paola tomorrow, so I can't be more specific after our trip. I tell you, as I said before, we have seen some signs of improvement here and there. I would say, in particular, in Hong Kong, I think Hong Kong and Macau have seen a more encouraging improvement compared to PRC. But as I said, Chinese New Year, we did our plan. And I do believe that we touched the bottom, and there will be a gradual recovery. However, we remain prudent for '26. And if things will improve, we should share it with you. But for the time being, we remain cautious on '26. We plan '26 courses, but we see some signs -- some small signs of improvement.

Gianluca, a follow-up on SG&A. Can that line item grow lower than sales? Or what should we know in terms of any nonrecurring or the forecast on the SG&A side? And then lots of excitement on Thom Browne. I'm on the ASICS wait list as well. Nice job.

Definitely, the step-up in profitability needs to come from SG&A leverage. This year, of course, if you go back, we reduced $50 million more or less the sale of Thom Browne, and that has not come together with a relevant drop of SG&A because it's SG&A-light business. So since we said that the drop going forward of wholesale in absolute terms of Thom Browne is smaller, that dragging factor should not be replicated. So definitely, our journey towards improved profitability goes definitely through improved SG&A. And the other factor has been we invested in the last 18, 24 months in the structures of TOM FORD, especially. And therefore, as I said before, we are coming to a sort of inflection point in the growth. So those are 2 factors that should help us phase out from the deleverage on SG&A.

Can we ask the operator if there are follow-up or other questions?

Our next question comes from Natasha Bonnet with Morgan Stanley.

The first is just coming back to the Middle East. I know you said it was about mid-single digit, high single-digit percentage of your sales. Could you split it by country? Is the UAE, is it fair to assume that it's the majority, so over 50%? And then if you could split spending just between locals expats and tourists. Also on the Middle East, I believe at Villa Zegna last year, you said that you had plans to open more stores in the country -- in the region, sorry. Can you let us know what those plans are for this year and next? My second question is previously on the EBIT margin for '26, you had guided to it moving sort of sideways in 2026. I see consensus has EUR 188 million with a 9.5% margin. Do you see that as feasible at this stage? And then my last question would just be a clarification on current trends. You said since the start of the conflict in March, you haven't seen any changes in trends in the rest of the world, excluding the Middle East, everywhere else is still on trend.

Thank you, Natasha. Okay. So I think the question on Middle East and the incidence if a way is the most important part. I anticipate yes, but I can leave Gianluca to comment a little bit more. There was a question also on local expat and tourists, which we said we don't provide this kind of details.

Of course, the biggest impact is in UAE because it's the biggest by far market for the group there. And so when we talk about decline in the region, it's basically the decline in Dubai and Abu Dhabi because those are the 2 big markets where we see revenues coming from. The second was if we have openings, we have one opening. We have -- at the end of the year -- around the end of the year, we have planned an opening in Abu Dhabi. We have already disclosed the growth we have -- and TOM FORD, we are not changing the plan. So we are going forward with the opening because it was already planned, and we continue the execution of those stores -- those 2 stores.

2026 EBITDA consensus.

What we have said is we said that the EBIT margin is sideline. So we have -- if you take out the accrual of tax, we had more or less 9% this year. So we are moving sideline. The percentage is that one. Of course, the absolute becomes a variable depending from the revenues. And so far -- so we have -- we are seeing revenues in the range of the EUR 2 billion. But of course, it's subject to the length and the impact of the disruption in Middle East in the next months or weeks. So...

Hopefully. And in terms of current trend, the last question from Natasha was if we are seeing any difference after the war apart from Middle East.

I already commented, no. We are quite impressed by the resilience of the rest of the country. And so we are on. It means that we are doing the right things. But the good thing is not only with Zegna, Zegna was expected, but the other 2. We are doing well with the 3 brands, I repeat, even after the conflict erupted a few weeks ago. So let's be positive to continue the trend because we think we know what we are doing, and there is an extremely clear strategy for each brand. We have -- I think we finally have 3 good organization. I think the new -- nobody asked about the new governance. I'm going to volunteer to say that I think it's working generally good. I'm enjoying not rest. I'm working harder probably now than before. But besides that, I think that the new team is proceeding very well in creating value and in doing the right things and making sure that the 2 brands that we have to -- that we expect has growth, which are Thom Browne and TOM FORD are well supported by headquarter and by the leadership of Gianluca supporting the other CEO. So I think that it's good. And I'm glad that we did courageously what we did last year because we are better placed with this organization than we were before.

A follow-up Natasha...

No, I'm good. Actually, one just thing on the Middle East. What's the split between retail and wholesale, if you can share?

Retail, wholesale in Middle East?

Zegna is basically entirely retail. We have already also taken over Qatar. So there is a small portion in Lebanon, that is the most relevant wholesale business we have on Zegna. Tom Ford actually instead is 100% wholesale. And -- and Thom Browne is not really relevant. So I would not...

When we sell wholesale, it means franchising, and we still have the Tom Ford and Thom Browne logo. It's not that we sell the specialty store just that somebody else runs the stores for us.

Tom Ford, we have franchising mono-brand stores.

Next one.

The next question comes from Chris Gao with CLSA.

Chris Gao from CLSA. I have a couple of quick follow-up. So firstly, it's about Chinese demand. We are very happy to see an above expectation current trading in 1Q and also end in guidance for the full year, flattish year-over-year. So just wondering that if the current improvement that you see from Chinese is more from the new consumer recruitment or existing consumers? And also, maybe could you please share more that which price points of Zegna core brand are seeing more of the acceleration that's from 4Q '25? This is the first question. My second question is regarding the sales density in China compared with the global average of Zegna core brand. So basically, where are we now? How does the sales density in China look like compared with global average? So because we know that there will be a couple of store optimizations in the midterm for Zegna core brand. Also, we will also continue with product innovations, strong engagements with our core community. So do you have any preliminary color that how the midterm sales density recovery in China will look like? So this is my second question. And the third question is a quick follow-up on Japan, South Korea. Maybe that is not the biggest cluster or regions, but still actually people also cares about the demand trend. So basically, how do you see the demand moving in 1Q '26 of Japan and South Korea and also the outlook?

Okay. So, 3 long questions. Of course, there are some details that we might better discuss after we provide the Q1 results in end of April. But in any case, on the Chinese demand, the question was the current improvement is also from new demand from new consumer or if we can...

It's pretty balanced. We are seeing both new clients coming in also through the Triple Stitch that we remember, it was one of the areas of untapped opportunity in China. So we see new customers coming in as well as the execution of the brand elevation that is bringing in fresh order. So I think we are working on both sides of the customer spectrum. So this is on China. So there is not one angle only. It's both. The second was?

Yes, it will increase also the personalization because we opened the [ Casa Salotto ] in China and in the rest of Asia, and we want to make those productive. So those are enhancing the possibility to have a potential new customer that want privacy in what they buy, they want to find products slightly different than they find in their stores. So I think that this is something that we expect improvement this year, in particular in China.

The second question was on sales density in China, but I would leave this specific comment on the call end of April. And then on Japan and Korea, if you see some improvements?

I confirm that they are growing well, both. Rest of APAC in general, it's growing well and specifically for Zegna and Thom Browne. TOM FORD is smaller. It's much smaller in that area compared to Thom Browne, but both brands are in the current trading, they are performing well.

But I think that the recent opening of the Ginza shop of Thom Browne shows very good result. And I think that also the Ginza shop of Zegna, we see good traction also with the local. In the past few years, there were lots of Chinese, now less Chinese and more local. And it seems also Korea is coming back after a couple of years of slowdown and Southeast Asia also, I would say we see some improvements in that part of the world. And actually, we have strengthened our organization, and we put attention to make it happen because there is a room for growth for all the 3 brands.

And next one is...

Our final question from the phone lines today comes from Maria Meita with Bernstein.

I have 2. First one is actually a follow-up on current trading because we have been speaking to your peers this week and a couple of them mentioned weaker-than-expected tourist trends in Europe. So I was just wondering if you're seeing the same thing for this quarter. And then the second one is on marketing. Obviously, you've managed to maintain marketing spend flat despite all the activations and the 2 brand turnarounds that are ongoing. And I was wondering how you were seeing marketing spend for 2026...

Okay. The first one is current trend in Europe. And the second one is marketing spending because we hear you a little bit far. If I'm not right, please correct me. The first question is what we are seeing in terms of current trend in Europe.

The second one is.

Marketing spending, how we allocate the marketing spending in '25 and the budget for 2026.

Listen, in Europe, both Gianluca and I were traveling quite a bit across the major European capital, and we see a good trend. We don't see any different trend as compared to last second half of 2025. And we see a good release of the local. We still see a good traffic by foreigners. It's -- so no major differences from what we saw in particular in Q4. We have some new resort stores that in winter, they did fairly well. We did some events, in particular, what we resume to do trade shows, in particular, taking advantage of our made-to-measure service. And so as planned, I would say, no particular worries on that side. Hopefully, we will see for the summer enough furnace. So that's the thing to watch. But so far, okay.

Marketing.

Marketing, I think we said that we are heading into 2026 with an incidence of around 6% of marketing spending on revenues. That is our rule of thumb, then it could be slightly more, slightly less, but that is our normal lending spot.

We have market initiatives that we said are important. We move from sport in a way to more culture art. And I think this initiative, in particular, with the art world, I mean, from Biennale to Art Basel to what's his name, the [ Aspen ]. I think that will help us nurturing and entertaining customers that should be resilient. But I think it's a good way to share some values that are related also to the world of Zegna. And so I think that environment and arts, I mean, are something that we are putting money into the marketing budget for this year. And I emphasize every time we do a show, we create an event. And so I think that this would be additional business that we can create that is very resilient.

If you don't have any follow-up question, Maria? I think -- Thank you, Maria.

We have no further questions on the phone line. So Paola, I will hand back to you.

Thank you. So thank you to all of you for the many questions today. So as usual, if you have a follow-up, we are here, Alice and myself, Alice, first of all. And we will join fairly soon because we have our call on April 30 for the first quarter results and our silent period starts on April 1. I wish you a little bit in advance, but a happy Easter to you all. Thank you.

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