Zegna profit surges 53% as Tom Ford ramps; Thom Browne begins reset
Bottom Line Impact
Zegna's profit resilience, Tom Ford's creative tailwind, and a disciplined Thom Browne reset point to margin expansion and stronger brand equity, albeit with near-term wholesale drag that favors DTC-led revenue growth and a tighter market positioning in U.S. luxury.
Key Facts
5- H1 2025 revenue €928m (-2% organic), net profit €48m (+53% YoY), gross margin 67.5%, adjusted EBIT €69m (7.4% margin)
- DTC channel grew 6% organically vs overall organic revenue -2% in H1 2025
- Zegna brand sales €570.4m (+0.8% YoY) with operating margin at 14.3% (+150 bps)
- Thom Browne sales €129.2m (-22.5% YoY); adjusted EBIT margin 3.5% vs 12.1% prior; CEO transition to Sam Lobban effective Aug 31
- Tom Ford Fashion sales €152.7m (+2.8% YoY); first Haider Ackermann collection in stores from late Aug with early positive reactions
Executive Summary
Zegna Group delivered a 53% net profit increase in H1 2025 on disciplined cost control and DTC outperformance despite a 2% organic revenue dip. The group is leaning into a Tom Ford Fashion creative reboot and a Thom Browne channel reset, actions that will pressure near-term wholesale but should expand branded margins and strengthen positioning in U.S. luxury menswear and adjacent womenswear.
Actionable Insights
Immediate Actions (Next 30-90 days)
Sequence growth by prioritizing Tom Ford accessories build-out and defer new Thom Browne store openings until existing units reach at least 80% of target productivity for three consecutive months
Rationale: Accessories carry structurally higher margins and faster turns; pacing TB capex protects ROIC while brand resets wholesale
Role affected:CEO (Zegna Group)
Urgency level:immediate
Run an 8-week sell-through sprint for FW25 with weekly clienteling targets and controlled replenishment to achieve 70-75% full-price sell-through by week 8
Rationale: Maximizes scarcity-driven AUR and validates the creative pivot before scaling buys for SS26
Role affected:CMO (Tom Ford Fashion)
Urgency level:immediate
Cut Holiday 2025 Thom Browne buys by 15-20%, negotiate Tom Ford capsule exclusives, and backfill with adjacent designer tailoring brands to protect sales per square foot
Rationale: Mitigates receipt risk during TB reset and leverages Tom Ford buzz to sustain designer traffic
Role affected:CEO or Chief Merchandising Officer (Nordstrom, JWN)
Urgency level:immediate
Short-term Actions (6-12 months)
Hold FY25 opex flat ex-marketing and reduce TB wholesale exposure by 15-25% through SS26 while shifting 200-300 bps of mix to DTC
Rationale: Protects margin amid TB reset and channels incremental demand to higher-contribution DTC
Role affected:CFO (Zegna Group)
Urgency level:short-term
Risks & Opportunities
Primary Risks
- Tom Ford creative reboot fails to convert to sustained sell-through, forcing markdowns in Q4
- Thom Browne wholesale contraction overshoots, creating revenue gaps before DTC matures
- U.S. tariff or FX volatility compresses gross margin despite low single-digit price increases
Primary Opportunities
- DTC-led margin expansion of 100-150 bps if mix and full-price rates hold
- Tom Ford accessories and womenswear scale to 20-30% of brand sales over 12-18 months, lifting blended gross margin
- Thom Browne margin rebound of 300-500 bps via door rationalization and AUR elevation