Gross profit remained broadly stable at €1.294 billion from €1.2966 billion a year earlier, but gross profit margin improved by 90 basis points to 67.5 percent from 66.6 percent. This was primarily supported by a more favorable channel mix, with direct-to-consumer sales increasing to 82 percent of total branded product revenue in FY25, compared to 78 percent in FY24.
Ermenegildo Zegna Group reported a 20 percent year-on-year increase in FY25 profits to €109.5 million (~$125.9 million), despite a 1.5 percent drop in revenue to €1.9169 million (~$2.204 million). Organic growth stood at 1.1 percent. Margins improved thanks to a stronger DTC mix, while operating profit declined. Zegna remained resilient, but Thom Browne fell behind.
However, operating profit decreased to 139.5 million euros from 166.9 million euros, reflecting higher overhead expenses, continued investments in retail, personnel and IT, as well as negative operating leverage, especially at Thom Browne, the Zegna group said in a press release.
Adjusted EBIT stood at €163 million in FY25, up from €184 million in FY24. Excluding a €10 million provision for expected losses on trade receivables related to Saks Global following its Chapter 11 filing, adjusted EBIT would have been €173 million.
The adjusted EBIT margin fell to 8.5 percent from 9.5 percent a year earlier. Selling, general and administrative expenses increased to €1.0339 million, or 53.9 percent of revenue, from €1.0083 million, or 51.8 percent, in FY24. Marketing expenses were broadly flat at €120.7 million.
Ermenegildo Gildo Zegna, executive president of the groupsaid: “In 2025, our Group delivered solid revenue and net profit growth despite a continued challenging environment for the sector. Group revenues reached €1.9 billion, +1.1 percent organically, translating into a profit of €109 million, up 20 percent compared to last year. We also closed the year with a cash surplus of €52 million, further strengthening financial flexibility of our Group”.
“Looking ahead, recent events in the Middle East have introduced additional uncertainty across the sector. In this more complex environment, our priorities remain clear: disciplined growth, strong cash generation and rigorous execution to meet our objectives. While we remain alert to potential risks, our ambitions remain unchanged, as does our determination to deliver on them together,” Zegna added.
The Zegna segment, which includes the Zegna brand, textiles and others, generated revenue of €1,363.2 million, an increase of 1.1 percent year-on-year and 3.7 percent organically. Its adjusted EBIT rose 4.9 percent to €196.7 million, with margin improving from 13.9 percent to 14.4 percent, helped by a favorable channel mix, steady revenue growth and cost control. At the brand level, Zegna's revenue increased by 1.5 percent to €1,181.6 million, or 4.7 percent organically.
Performance was weaker at Thom Browne, where revenue fell 14.6 percent to €268.9 million, or 12.1 percent organically, as the brand continued to rationalize its wholesale channel. Adjusted EBIT plummeted to just 952 thousand euros from 27.3 million euros in FY24, while the adjusted EBIT margin fell sharply to 0.4 percent from 8.7 percent. The group said the decline was driven by a 40 per cent drop in wholesale revenue and investments linked to opening selected stores as it moves towards direct retail control.
Tom Ford Fashion posted a modest 0.8 percent increase in revenue to €317.1 million, with organic growth of 3.1 percent. However, the business continued to generate losses at an adjusted EBIT level, recording negative €15.5 million compared to negative €10.1 million in FY24. The weaker profitability reflected continued investments in staff, IT systems and the direct-to-consumer network to support brand development.
Capital expenditure decreased to €102.9 million from €125.5 million, with around 60 percent directed at the store network, along with spending on a new footwear production plant in Parma and IT projects. The group closed 2025 with a cash surplus of 52.1 million euros, compared to a net financial debt of 94.2 million euros a year earlier.
Looking ahead, the group said geopolitical tensions, particularly recent developments in the Middle East, have reduced the visibility of luxury demand in 2026. Still, management said it remains focused on meeting its 2027 targets, while closely monitoring risks related to the duration of the conflict and its potential impact on global growth and consumer spending.
Fiber2Fashion News Desk (SG)
