ZGN - Earnings call transcript Q4 2021

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Operator

Hello, and welcome to the Ermenegildo Zegna Full Year 2021 Financial Results Call. My name is Alex and I'll be coordinating the call today [Operator Instructions]. I will now hand over to your host, Francesca Di Pasquantonio to begin. Over to you, Francesca.

Francesca Di Pasquantonio

Thank you, Alex, and welcome to everyone joining us today to discuss Zegna Group full year ’21 financial results and provide more details to the numbers shared in February. discuss a year the publicly to year the first going as results, listed we're our revenues, full full time. Today company for

our be earlier will using presentation posted We the today. on materials website

through the Gildo by and the COO materials Browne. ongoing Browne Rodrigo and Zegna, of the begin website. we call the numbers the will release be our You can Rodrigo will Chairman question. going walking CEO you investor results discuss joined at and Thom at along of related a today high find answer and page the the strategy am spend will happy level our Tagliabue Bazan, to and be Group through today related the in CFO, with will press Group’s and of Gianluca under Gianluca Zegna more leaving I deeper, and Ermenegildo time group Thom guidance. CEO, end Q&A time for

we point Before we begin, forward-looking that to I out during may call. certain need today's statement make

different SEC to being statement Page uncertainties, statements be by such is implied forward-looking actual call a by these refer results I of in X or expressed Harbor presentation. included All will from governed subject discussed our of course those language. today's those risks this statements. including to number the and Safe of filings. you are on Our which materially And such

details call to today. the that, I we you holding wanted Gildo. and Zegna us will Gildo, And Before providing May an Oasi to to after at call. for let turn know I be I Day on that will that thank turn call the the with will joining further Investor over also you Again, we be over on XX,

Ermenegildo Zegna

us all publicly company. February, our we afternoon a Good to our ‘XX performed into ‘XX area as and a our you a see milestone start where set year strength the as the of in join And revenue, highlights. as you today deeper I'm strategy. want before Francesca. traded everybody of results Company the year much, to preliminary we very share can of shared for you diving full numbers and our results some and and from the thank Back I top-level very well, showing first happy to was with

the margin comes However, in And it in significant see more we adjusted approaching outperformed however, are both can adjusted by from EPS, outperformed and we we that revenues every ‘XX figures. basic slide metric. EBITDA non-IFRS XXXX levels importantly, XXXX surely when to and

’XX per business in pre-pandemic were cash we XX% up reaching surplus entered proceeds combination of cash earnings base December €XXX in from year the levels the adjusted ‘XX. thanks €X.XX a also from million, Our the of to share. with And

financial the into we made a move the And next dive year, Let's of us. slide. special before like our the to for for to and of I’d for highlights revisit ‘XX family year all that some strategy and the

million First Stock stock Italian in the sector list net and was Exchange the and luxury €XXX to becoming for the first house York adding in foremost group. within the proceed first New

the Browne planned. level taken strategy number luxury the off the around iconic in and our milestone to growth The continue continued as on well leisurewear equity brand the stores will customer Zegna where we have strong year, to and which also is the of brand the the is segment our growth our have forward, we our Thom along to worldwide. and as increased world. for growth. a Zegna and saw line Brand with brand awareness needs going changing invest in the And of meet Second, iconic was kicking foundation One in product recognizable Zegna shoe future which focus next

projects [ph] apart and slide. Next core. different ’XX saw from also of Zegna initiatives the continuation

of continue our produced the world best fabrics knitwear, is acquiring in and We portfolio, and some the momentum of at XX% the textile Italy of Filati taking textile, advantage knitwear important expertise of by Zegna. yarns in new growth yarns the to our in very more cashmere complement becoming as in of accessory made more producing Biagioli the

well. stores as in from with brand started everyone the year. board. store, that and also sector then worldwide. And out shared applying into digital with as of traction that some we We have rolling starting the have this we’re operation a the And number most And both Zegna with our brands I important lessons by across we seen all taking completed

Finally, been we And We'll we sustainability this sustainability. company. as Day report private be a as sharing published first our May. years. sustainability everything full new the at year heart Sustainability do. has And strategy our as of commitment well Investor in our is for XXX last

slide Next please.

turn strategy textile focus and year in about Browne. the and modern strategy talk page distinctive our far Gianluca kind You to our turn investing again we Italy good are one our about the of number time And key menswear minutes that I’ll importantly, a can us X. over energy see talk us Thom brand, to remains now take off. and the financials. luxury to Made a are and The was pillar few Please for then of and time ‘XX by strategy and our Zegna showed that paying the most

First, to map. brand our

this Please luxury and is And go pride formalwear year, opportunities Zegna to in collaborators. already along unique gradually creative be for driving kicked growth off ourselves with we coming stable now last are and Brand activity, our One up by segment. slide offerings roots continued customers, year which And key and strategy way, continue we products the name on Keeping and consolidation also as we with the and and command, and strength recognition is to our evolving which the advantages alike. continue completed driving And number more look strong iconic for made customers their will back. demand new and even leisure a X. profitability. our to brand need custom collaboration, be interesting, to strong. we this existing And business made-to-measure appealing our is competitive for Our our of

our having highlighted our some The keeping it our after Zegna us, is the especially given best It our roots of come our if as the And genesis together pride textile of players for as Biella call textile Second, The that key a what years foundation platform is is brands, than the at Italy’s where which want, been integration, it [ph]. particular one-of-a-kind to textile XXX ensuring of originated you we platform region in company, of more well about have intentional is leverage laboratory the brought we heart the also of do. major sustainability is ago. luxury from of world's grow has cost the provide strong to highly also top platform. we provide as brand has great players. vertical quality top scalable. when to some for how our and quality platform we [indiscernible] our what production, And

for focusing particular least, have strategy continue of but the seen Thom sales. turn advantage where focus of between the our Made long of Browne channels Zegna Thom Browne our our name in this beneficial not increasing since strategy Slide is I wholesale and the Please Thom Slide for strengthening retail Thom both with of with world. from our continued We out together all have our levels to And Italy in ensuring first Thom I family wholesale art. business. been show our by synergies we for womenswear on elevated competencies and Browne. hugely icon X, across Thom Please offering is have around the capabilities field, digital piece has to platform to Thom of And been Browne men’s and think brands taking and the XX. textile. legacy to strengths brands, the moving demand Browne, elevates of last XXXX. success Thom has Zegna, with and growing really And Browne, been been and and -- has direct-to-consumer to And also selective part in turning made-to-measure which with Browne by our And breadth

performing Middle have U.S. Finally, in our board across for our double and is solid. growth growth seen is Europe rebound the significant the down high markets on vision and East, the to still

Our are looking customers luxury is are brand leisurewear and Zegna how with on DTC driving focus line and perceived, brand the our what changing in for performance. the bringing elevation it more

growth footprint in which our potential specific about as bigger the for have and We strength from at for while me. Day, space for all significant are DNA in diversifying in has brands all it Greater goals this part with And for Anyway, we share heart Thom luxury Zegna China, we’ll a XX. will With we be positioned market. uniquely what do. we always with do keeping Oasi Zegna all at And more growing itself the is particular. our room a Sustainability on even that's intentional that, been of day one. May as Investor at it we of Browne

for me Gianluca, you. the year. Let can numbers deeper the to dive into turn Thank over who

Gianluca Ambrogio Tagliabue

the take statement. from of who close cash by slide Gildo. it over you, a XXXX. guidance will segment, to afternoon, number profitability, hand of and everybody. I Today, our for be our breakdown it by highlights segment, we'll back followed Zegna income good Thank position, Good results morning, I XX. Browne will Thom Then segments discussing revenue, Gildo with

XX% at XX% billion. rates our below XX% XXXX XX%. The a back in saw segment Browne to in Thom in actual significant €X.X shared up €XXX almost in was over is XXXX, with XXXX to trends ’XX. XX% up performance formalwear. million unfavorable Zegna compared were growing This X% XXXX, to €X of driven even stack levels This bringing just revenues as First, down expected by year reaching from billion two XXXX. was February, for compared more XXXX from growth,

to direct-to-consumer in it revenues, represented Middle distribution reflecting two-thirds in our And gaining of around America, see the channel. North of consolidated performance, have our goal in XXXX been solid strong pointed ’XX versus We was XXXX, ’XX The at and more growth we Gildo Europe as continue in our while of control XX%. retail East. observing around and channel out

our Gildo to shoes, along continues Together, in as XX% revenues. especially luxury brand brand. of be leisurewear Finally, strong represent driver Zegna ’XX the they with growth a shared, about of Zegna

presented in XX, Page enlisting NASDAQ compared process. progress appreciate plan to over July were while middle the that in the our we now Moving the year. of prior And we can the to excellent we

we in July So through plan when plan it plan, the that business our XXXX. made presented we means is that

land in announced at When year was our in around to margin is million, over group XXXX preliminary the February, EBIT efficiencies. to to in over which price accelerated that we ‘XX €XX revenue expected ‘XX today revenues €XXX which an was compared sales was XX, of adjusted €XXX in The percentage to part million. and million, and realized full accounting the cost seven in the pleased this as and in a Our XX%. listing we X.X% adjusted earlier XXXX, times with was expansion increase seen earnings XX% presented I adjusted with of XX.X% guidance EBIT EBIT an plan the surpassed margin between ‘XX for due process. of have was that the XX.X% exceeding that remarked large the anticipated

one the and exceeding significant €XX which €XX We above which plan. the compared to ahead July, in XXXX €XX €XX well plan are segment adjusted projection Thom figures. had XXXX for uptick business in rate EBIT plan. of at and adjusted July an the Zegna €XX Zegna profit, exceeding million was million. we of recorded from a EBIT, has excess million saw So million similar €XX group specifically of the XX% the figure Browne, €XXX million of of €XX business XXXX trend million million million adjusted saw year of

adjusted ‘XX. net finalized to cash later combination as was cash from see million will We financial December of €XXX intended the figures. and adjusted the EBIT From perspective, cash, which cash profit investment our the of how were business reported strong the at surplus, in the a €XXX reconcile net million proceeds the net

benefited reaching can outstanding in X%. the XXXX. to structures clothing we July in Thom focus was XX, all include the this the the chain to And factories, corporate this supply good the cost plan segment the of Browne, the expected they And was The chain of set we performance Adjusted appreciate was for It XXXX leverage plan Zegna respect, seen exceeding about page revenues segment supply of in sales as sales, plan normalizing Zegna and when the in XX%. year terms amid Thom the for full from impact moving is D&A. is cost. moment the sales, year €X business, segment and will the at particularly the in noting EBIT that in billion mark was both textile costs Again, worth Now low allocated see on ahead segment. versus lower cost also fully Page at In XX, segment. terms the both and are Zegna against a at and in which in you one July set at Zegna of the XX.X% XX.X% because for Browne ’XX delivered met ‘XX. segments notice in turning

is of expected. to mostly financially [ph] expenses the of function of terms of important cost the mainly shares the was of it of adjustments, and and contribution equity personnel impairment, stores. reported to Page were of word rest been million. adjusted other €X,XXX cost by equivalent is family before covered to warrants sponsors holders. one in figure stores. and been shareholders. given this the how related all termination to that in SPAC profit €XX we to an comes company the they processes, bulk the at related transaction of finished items bulk is early number, the €XXX reconcile been network And shows also and to as equal costs with it's severance coming on The taxes, €XX One the closed slide to The and they from stores cost big non-cash which line the effected transaction to this the different headquarter of strengthening been negative bulk cost, to business combination, by line, XX% million bottom as growth by the XX, nothing charge-off neutral is to the leases. this employees effectively bottom XX XX of these -- In In it operated it payments. the other from And has be expansion it to There by short is the than Group, million. in are the promote the the amounts to has related and affected the are is has authorization cost million due reported year as directly €XXX Spain. They and the end of adjustment. out which to which P&L cost like the expected ’XX related The factory that that since Zegna are few a had has precise but accounting severance the altogether of are the

store in ‘XX. before IT that the new of expect relocation, change distribution openings, -- of ‘XX. sale Zegna key of London there we strategy million and payments a disposition to IT And adjustment We to low-teens part and XXXX the be expenditure has go that point the CapEx renewals, for was two-thirds offered capital building in in system around ERP. ‘XX guidance €XX XXXX, process relocation, as know November overall was for Brand of digital and XXXX the For minor subsequently terms If in the openings between in €XX €XX amounted expect and and renewals to of of shift a the million, Investment of million. of to new IPO This this and million One step to also the inline particularly is Again, retail. relation rebranding projects. been XXXX the up amount in dedicated will for to we for some at euros. purchase to page net €XX millions XX, related in guidance, we XXXX

the trade have levels. going incidence capital of of we trade terms pre-COVID-XX seen to the working improvement almost working back and received In capital,

further We expect’XX a improvement. of in make terms step

I Now can I back and guidance think for talk turn to goals about it to Gildo XXXX.

Ermenegildo Zegna

fiscal in Please many plan Gianluca. want I priorities. we turn strong we're again Thank aspects our our encouraged XX. the you Page on been business have performance key discussed presented to which July by ‘XX And key of of today. Yeah. in And the to exceeding said ‘XX, year focus

course, ’XX Brand ‘XX again has the core on brand, make capitalizing experience the the especially in in and to accelerates regions of XXXX. model for turn related we over network luxury to to fiscal focused in Zegna across will our started guidance growth and create by an excellence and compared Page finally been Please customer positive the growth in revenue the will which One enhancing collection place to our pricing of low-teens XX, execution year the are on for on value developments pandemic, be shareholders eye leisurewear and enhancing to related keeping collection. creates ‘XX ‘XX Our volatility focus retail take solid the China. strategy environment has alongside Group business generations. And geopolitical the confirmed our and ’XX to

As expect ‘XX. in for a the did profitability, we nice advancement

delivered our ’XX. we ‘XX, margin ahead in of for However, plan own in and original adjusted excess the expectation an of EBIT

these bar and this EBIT in While overhead the in related and year, our margin increase a leasing absolute for expected limit investment rebranding and growth see despite logistics, we nice may upside adjusted higher terms, step the costs. costs in up

XXXX expected cash also [ph]. we However, operation our

picture. positive I'll So And Francesca. again would hand with back for thank we say that to joining overall, I us. And you a

Francesca Di Pasquantonio

Gildo. Gianluca. you, Thank you, Thank

if to you. deal you are to are want with We questions. we ready take the Thank to questions. Q&A your Alex, manage ready

Operator

Goldman Thank first your open. from for is Instructions] you. Karina, question now Our Sachs. comes today Shooter of [Operator Karina line

Karina Shooter

this congratulations don't mind. morning. questions, And few you I on if results you. the Thank a have

China the moment, understand quickly in of the I'm the you the first regional do you're China. margin the one the obvious Zegna the And year. the of these XXXX? dilution some of to is in active color you on the we COVID that's in margin ticking year, question your of terms just that should the of despite situation the off you. investors one more fairly the trends the the brand, particularly given then associated us this us saw final relaunch appreciate will about and help and give was question network brand in end to marketing, current impact and ‘XX? year, one-off in the One program in adjusted Browne. one, I developments and margin. all for admin relates how admin That just given Could then the think the Brand the recently, general nature, now? rebound in half my about right Thom relating my investments and close just about that But in the that saw in expansion second the And on and costs At this slightly we and at year, at we the as moment, processes. in nice seeing broadly, EBIT situation, next all margin So to terms mind on Zegna more strategy. you think Should question think side as Thank store margin particularly how in view a the

Ermenegildo Zegna

Yeah.

must of you Okay, to of start is our are China development monitoring the year ongoing market key hi, crisis about the the I there. as Gildo of that was tell X% X% say closely And China our sales. Zegna. good represents it in you is pandemic China. know, that I COVID-XX Greater we the surely can this and

continues And significantly lockdowns cases, be have store we COVID traffic lockdown. closed and However, to of an good had we being it. the realistic city have if increase drop seen sales. there And that is there about we’ve in which number in some now

the my our have positive career express quick business resilient China is that back. that in I is China, real continues to very normally. e-commerce and be in to [ph] the business to a However, And seen thought, meantime, to in tends we come in wish the operate

you. situation China our guidance COVID in-line room policy. the to tell Zero with some navigate believe Gianluca… On the development I that there I COVID So gives us and That’s can margin, what in

Gianluca Ambrogio Tagliabue

in the margin, the brand. the X%. We time plan Zegna which margin. target we We were declared than X%. for higher on July, the business let's on plan the XX.X% XXXX, in delivered at so set set is On scene at the

of why dissect came in ahead let's So plan. the we

higher out came revenues expected. we than So

which there there the scale also part us. of is is is Scale So for vertically effect definitely fixed of of we are integrated, since production, a cost the effect. cost product

down there that. trickle effect a is positive on So

that’s fall we benefited addition, price have from in to activated whether ‘XX. been is going increases along intensified be and In XXXX ‘XX spring

So Zegna of legitimacy -- seeing in margin wholesale by and higher consumers carrying brand the also higher prices terms by of customers. we are the

been adapt to XXXX. prices have we continuing also generate and so positive this And a effect will on

and we pretty price season. And are side through We markdowns and lower benefiting sell to managing the end cost of bargain at the well. is improved continue. are from going on full This the products

infancy there being Of course are ready declared a as year is -- be there we I full up step by but that. company will listed absorb to

are nice we translate XXXX. improvements the P&L, some seeing which all also should So effects of across on

delivered our So probably have we when is somehow backwards, -- is stakeholders I exit the probably ourselves we XXXX XXXX. looking Zegna margins. will brand we And from and and promising speed we on think solid improve for plan that proven proven were

Ermenegildo Zegna

Zegma. Gildo So

effective of took as the it to XXXX, place So we full the support from point to in had and of that about continue is [indiscernible] question the largely your XXXX. view opening in margins, XXXX, the a to accelerate board

also for we that cautious took and accrual a nicely We we XXXX line. for is stock accrued believe that are that

strong in margin where one it we certain reopening and reality. very From top a point for the important start. very to for the point a from in company. that's still of and some confirm a looking still moment at can at comments, capital, compared we is one-off say the to of company is Gianluca’s There long-term a certainly plan XXXX channel least to a view, XXXX of cost an that So for obvious year is can it's will impact there closedown the similar line, and

situation the China continue quickly support to up we lockdowns. We as our open reopen the the and cities through as in to efforts continue

Francesca Di Pasquantonio

we do move up, can any question? the or follow you next to Karina, have

Karina Shooter

much answers. No, that's the perfect. Thank you so comprehensive for

Francesca Di Pasquantonio

Thank you.

Next question, please.

Operator

[Operator your comes question Thank next is open. Our line Dye Instructions] of Jefferies. [ph] you. Jon, from now Jon

Unidentified Analyst

Yeah. guidance moment. Thanks impressive just It's the what unchanged, China pretty at Gildo. much. for my one given questions. afternoon, very keep to you're first in Thanks taking Good everybody. Maybe to your seeing

talked and winter, So U.S. that in just to terms give to about us Europe some idea books flexibility also with second in of growth how that the products guidance you're change they're stronger of seeing my UAE bit new question. some progressing the mix? as is summer, you fall, you you question new little Could in around for in That's seeing move talk to, the first in obviously spring, and to about order a rebound and the My Gianluca margin. a labels,

you also elaborating little you maybe can please And bit the forward much finally, going sell And on scale ’XX? or XXXX? the previous through in the a of addition flow, of that, expected. price working cost much and provide efficiencies really detail could -- Gianluca, that capital the better than then year-on-year, set expect you've I increase cash think was questions. seen, more against if well can we around flag to into what around Just full the strong

You lean about talk inventories.

combination running. ‘XX Gildo, you're about cash maybe M&A on you smaller you. good if cannibalize manufacturing you about more could don't the well finally, bolt-ons, going the plus manufacturing flow thinking whether into sort M&A, very it's a that keep brands of existing going can to assets, thinking provide any further in or as If your to ones. expand that you're And as how of Thank how space details

Ermenegildo Zegna

surely on doing around Yeah, in in of even value the of is target marketing. first positioning, several ’XX of on our in But I opportunities. in the think now terms on terms start will considering in is going our product right of focusing pricing, and world did with I one, priority terms mix, better we are than last in margin, what's terms we terms of M&A,

intelligent on that as something tell because we more has said will the enterprise now Because logistic probably, issues. focusing that’s organic other I now energy along we can say So I this more But that thinking which seriously because to than I are would one. in of if [ph] right be particularly right moment the consider about that previously growth. seriously. know-how surely more costs, believe there's that this in we are suffering do of you we comes the we preserved,

can will can it. a working full if hand, give supply them so tell And I that we we surely you do speed. is our chain

some matter a people, the and trying to in in are them as Italy, that of we're to hiring. fact, are say release press we in from to We're we our saw the particular. factories As proud very hiring you of fellows hire help out

on fall, the must that So positive that's checkout store. say the winter, for are extremely M&A Summer and I'm how I of new products doing the in

you, renovation terms terms of the to space, of we've the of in their the business of And people some lots in in product the put together, terms in immensely. back want to helps of work, with selling cross terms tailoring seen of I to how to wardrobe. and renovate renew visual, are lighting, impact comeback quick product several We the of we And have of it columns. stores, are been honest mean, seeing business. going be the shelf

And so mean, And they I shirts, sports sport out they are buying are in some extremely sneaker with it's old [indiscernible] jackets, well. again, but the today, wearing say checking that it's particular together must the clothing, jacket. I

is fact yet our and product, numbers. can is digit the terms surely delivery label some wholesale, I one of that procuring In I the you -- that story I in store though, have named diligently. even think in low-double that Russia, would in Brand in have And by Russia. season have of say first the [indiscernible] terms the the good we of One because embargo Zegna be Even tell selling, affected introduced will reaction, product brand not not no, we very we late-May, that So transformation we’re result. had respect four we the and some to good June. The to

course spring-summer are about of the trade our minus you I mean working four the seasons. I the so, of already looks can stopped. on now and tell And marvelous. That's And really we are collection right only ’XX

I And to of market One, on country, transformation doubt. be what customer Gianluca, regardless god no you to want should thank it margin? desires. the regardless But the remember of because -- the go so did it's And we this

Francesca Di Pasquantonio

wholesale you margin? and want to this the move then to and situation on current If platform with the

Gianluca Ambrogio Tagliabue

trading, will But we QX saying sales current The that was Gildo we in positive. May. stay disclose as

noise. bit hearing are We

Okay, fine. the That is of line.

cautious sales situation So we are has of February, of sales in likely but which terms be delivered stay was Clearly, seen the we China, on seeing more momentum year. in The at good end momentum. performance. March until over the the good same we've momentum to COVID

questions to Jon efficiency, going, capital. about cost supply, working and good So performance your

terms we cost efficiency in see of So of geography our throughout P&L. the efficiency,

the from starting Gildo So the order starting fall-winter ‘XX has saying was from intake been cost high. in of our very and product

is menswear, to XXXX. is chain at and fixed huge, absorption supply jacket. The speed over the capacity in volatility will running full full capacity. be that now outerwear full over positive constructed cost P&L So shirts, and the This generates the

more because accruals lower and cost driver driver more obsolescence the collection focused one of and year. end So collection, have in lower determines stores that offering, we of less therefore obsolescence efficiency. reduced that broad narrow the is prototypes, the efficiency Other fewer at depth,

focused of collection in spaces. retail We also terms translate focused more more a

effective. go to surfaces remodeling Our smaller tends more to

We with that XXX need well lower in surfaces markdown continuously we at a the of than finally, effect into meters. the we don't square square maybe more more that can products iconic stay items that were and And carry also obsolescence. on that XXX in anymore. one them meters, are generate terms we moving more product, and that accruals. for fact positive So season,

disclosing full season seeing of terms end In are through full And at in very going a price, season at becoming few is price reduce We're of of we the to sell every by at incidents. it marginal. points the terms this numbers, points. few end not specific point, yet but bargain the down

but to of also price a item. course, casual to traction, XX is of at make-to-measure wear part present wear. is ready only point a compared premium which this we business, is And tend to that important carries informal the resilient not plus wear, where because our make-to-measure Another gaining

is on So also a adding the offering also the of up side the positive make-to-measure for margins. casual picking

inventory. question final Jon was on Your

whole. managing capital and We as our effectively have a working been reducing

goal to to as for is as We levels. will to the all that a the the get be be one. to year further there Our collection make possible close three aware and set XXXX from -- during the the transition XXXX the need

to probably capital. to gap swallow transition XXXX narrow in So will of we to incidents the goal But months entirely. the probably of levels we some working terms is -- need that

Unidentified Analyst

it. very Thank Got clear. That’s you much. very

Francesca Di Pasquantonio

Operator? you. Thank

Operator

now Thank you. [Operator Rogerio Our Instructions] comes Rogerio, Fujimori of from is next line open. your Stifel. question

Rogerio Fujimori

opportunity behavior taking for level give one greatest in Could idea start of Zegna may KPIs XXXX? add an you the my sales which consumer productivity the offer second three I since retail Zegna improvement? questions. in a sales in European you in any productivity quick achieve then for changing Europe, And brand brand us if Thank the have ahead, Ukraine? thanks brand. the of the what can war the on to I you. Hi, And retail of perhaps And about for seen have Western one for five Zegna looking years? density

Francesca Di Pasquantonio

at. On be you have to these and disclose you Rogerio. all foot [ph] And from estimate our elements And the is activities. channel improvements. you retail can are we the drivers sustainability Gildo take of -- can going to we Zegna disclose we elements. productivity can that in seeing revenues, Hi, I'm major growth and about any it have I all the in organic, fairly expecting question, is metrics elaborate we calculate you you with brand are not you can the we I changes at metric, Gianluca because the tell the through but that have stores. Clearly key all number speakers] these because coming your you look footprint that that don’t yourself of the projected also be accurate the overall that the to think can KPIs the productivity [Multiple afraid. to Gianluca store,

Ermenegildo Zegna

the do slowdown the America, good is that consumption, that. position something surely not with crisis, since must seen I be with which strong to say news. very, honest new you European European Ukraine in to have consumption In very In we brand trend. any has

seen particular, past extremely would months small the also. I bigger say the the in store than innovation, months. been the say past I in in in UK Probably we've in must But also. before said two has I results, market, strong during trend As the some that cities. the cities two brilliant more stronger in And the market

operationally, positive for down some and it beside So renewal overall, is. a trend Russia what is also

mean, they Dubai, this And Emirates last the ’XX. Europe, consider really know going part, Europe, an beyond Emirates the good running, the big sorry, I speed at going in keep of we and numbers I not part numbers, is incredible already -- are the the

Gianluca Ambrogio Tagliabue

metric, applying ticket the that one it been directly spring in for ticket. One spring reasons. point performances to tend we price come summer, is full fall add But also one in increases driver throughput ’XX. productivity I is several the sale to have which fall started ’XX Just definitely the ’XX. and average before to will we price steam ’XX. starting from to like-for-like the be is And related mentioned important up Average is also going

price like-for-like has driver. one been So increase

from unit Second transactions casualwear. formalwear moving is to for going up,

We more are items. casualwear seeing buying coming, units for people specific

pairs that pairs So different buy they colors. wear buy of like two of knit stitched. triple three they They

the going to decided the cost, on course units reduced we seeing position. of numbers of offering the transaction of So also definitely we level because up. And are we per focus luxury

productivity some store this So factor covered and are we Brand Zegna. to the euro Also square meter. by were the to points behind is price leaving that that per One raise an means important the move

those that side, will the other because small need terms add focused we to more kind of the surfaces the On square renewal of carry we products. consider fact any a or meters, make bit in can rather,

Ermenegildo Zegna

say Rodrigo, something on Thom Browne? you to want

Rodrigo Bazan

contributed KPIs have healthy we you average extremely But tell is what that Browne ticket. the the from coordinator, we both obviously Thom can disclose don't details. -- both from force sales

such is still and positive will And to the brands, in numbers that approximately You remember And a designers opening turning extremely management in but growth new growth extremely luxury strengthen in comparison quality large, established to the of client more the of to value network number looking of Browne. one have the ourselves it and in are then doors to plan compare And do lot We European. or makes just clients. Also growth Thom mostly to sense we terms the healthy. the than the to we're that point specifically continue the stores. by expanding of we stores, future, them. to which or

Ermenegildo Zegna

the So trending at on with positive beginning trend, it made-to-measure. I don’t where is know

getting made-to-measure back which seen think XXXX, have to important. is I We close

gradually So of seems and unique it's season back number been base and indication and quite coming are The offering the has people that retail we wedding good service to are for in blocked a seasons. is us.

So to take advantage. people get want dressed and

helpful. a so really it's continue every we worldwide. And that's that And on good -- side season so very to see traction

Rogerio Fujimori

much you answer. comprehensive the very Thank for

Operator

any questions for you. additional I Thank will any remarks. to and closing Francesca hand back now

Francesca Di Pasquantonio

Alex. Thank you,

increase question And intentions on us is as that terms in and of can of And we the by we few about a about plan a forward? on questions sales. in the the U.S., trends U.S. inquiring There question spending comment question terms performance what customers revenues general, our the of in through absolute in There terms percentage U.S., and going we're what are received business? marketing, is and percentage present have if digital a for and a marketing is digital, We spend to about in by of the the email. what a most there challenges. and seeing what opportunities? And successful the is

Ermenegildo Zegna

for United the are in that would say, think performance. I door. States, retail, a processers, Most I I more and wholesalers have we inventory. and that And still we've haven't with know of stellar I though the there reasons. coming the are even our they we think U.S. years. say, two seen converting we a are I in U.S. trend more got number good out And

we we’re finally, some into traction to delivered. so that going with inventory good the get And new

because the on past the leave good sportswear, sell-through and that retailing, -- good so interest And have guys their work. they do -- years. just for the before, only also buying as And of not saying was they two many I many luxury been

extremely United And that And And So is must certain in of in season. good South in in the that with part we I across doing world, that’s States. it. in price, well, we new the will we've a increase the a the have America stitch categories. sneaker, seen prices say of item and the the particular also response. in the middle iconic noticed

resistance our no stores, stores. new So retail few we buyers. to In have a

I America States if we started New in six have we've journey and America, well about good amount then in We we Brand past healthy would numbers across One in York seen the say it's want also is Angeles. Latin and good talk as a And traffic months. United in in and the Canada. Los But to

brand awareness. performance very in we good So strong and in have a both where Mexico, Brazil

of media. Yes, this And would goes that goes project terms, area individual, to Browne. goes that terms and for we that spending, Thom talk our and the have, in I social In increase sure, spending, can into rebranding marketing say I say goes we would is absolute talked very about spending decided about Zegna, I Rodrigo into good. for

to But particular the in which out. fall which built I think new is region. the shirt, want strong is rapidly and last season well pretty spread bigger talked support we we outer tested and roll the highlight knit across collection to the the one stage. of we wear, the the to also are And going outdoor the progress we -- are leisurewear which the luxury about,

terms In Browne? Thom of

Rodrigo Bazan

increase communicate increase all significant last clients. pure the percentage. specific to passionately to on continuing tendency And to and talk questions, We a approved about for IT’s our communicate shows product a year value and as as us, an in marketing. absolute in PR, So well going branding. different in increase. year the marketing after for is truly organic is story supported to we -- in the have and in always Thom special invested we're Browne which last we a celebrities, work have marketing traditionally doing, Board that But

supported last So year. faithfully our Board us

to continue that will plan of significant investment. We type

Francesca Di Pasquantonio

And then question on digital. a we have

Ermenegildo Zegna

extremely as such launched localized an that across [indiscernible] trend. such and digital across Tmall Digital, The yes, new on our in last we seeing dotcom, we trend China. titles positive is are as in platforms year across

We market and well our traffic for certain response. clients a to with in serve continue are local the looking better platforms extremely

see year. across have to last very continue DTC say can a We you [indiscernible] of -- non-promotional full And sales which for extremely the us. our us total trend we for majority that became we're price

Francesca Di Pasquantonio

And Zegna?

Gianluca Ambrogio Tagliabue

but we see Zegna, On digital are sales looking that at looking only holistically, also se, enabled. at not per digitally e-commerce

we called have what we BXC. internally So

advisors to or in their now outreach, to portfolio customer to store either enabled WeChat select are them customer to and visit invite the WhatsApp all outreach consumer Zegna China. So buy The proposal the the the of online of of this in either a come can and new -- items low category it customers winter collection, or to then stores. total through cost

digital activity last the repeat our to have sales wise So enablers traffic month, greatly representation of us stores. And terms digits double sales. that this in we this activate outreach in the are of helps into percentage of activity, solidly seen as

that aware would of customers to make component, big like waking a the up is we especially for that collection. new So sleeping

mid-single zegna.com have and sales pay is to or coming single terms for the our in likely move pure proactively pieces e-commerce more becomes to Thom they reaching every through the e-commerce percentage mortar pure of we customer up. Browne But because And from in activation. platform. digit out is and think of eventually us than fact but sales, making this I probably that Today, advisor iconic DTC native favor iconic recognizable are tools of postage the digital pieces. higher customers. as the activity is of a then ultimately through e-commerce digital of Then and will a stepping So Zegna this brick journey

but was which and more becoming is growing which part retailers, that Another with the not through existing is new in successful, nicely the especially is that presented sales, more ’XX. collection is fall up

Francesca Di Pasquantonio

Operator, wrap to the line? up. are think you. think, need any we more I I Otherwise, Thank on questions there

Operator

We currently questions. further no have

Francesca Di Pasquantonio

Okay.

May everyone the will participating. I reaching Investor we And conference detailed a the o'clock. XX you will X our at now at close on it’s other be Day much Oasi Thank fully very be of end with details conference And out can And for day. think we Zegna. and we hosting call. the said of the as

Ermenegildo Zegna

you. Thank

Operator

call. today's joining for you Thank

You disconnect. may now

Ermenegildo Zegna (ZGN) 7 Apr 222021 Q4 Earnings call transcript