Ermenegildo Zegna Group delivered a notable jump in earnings in fiscal 2025 despite a slight top-line retreat, as the luxury house leaned further into direct retail and benefited from a more favourable channel mix. For the year ended 31 December 2025, the group reported profit of €109.5 million (about $125.9 million), up 20% year on year, while revenue declined 1.5% to €1.9169 billion (around $2.204 billion). On an organic basis, however, the company said revenues increased 1.1%, signalling underlying growth once currency effects are stripped out.
Gross profit held essentially flat at €1.2940 billion compared with €1.2966 billion a year earlier, but profitability improved at the gross margin level. The gross profit margin expanded by 90 basis points to 67.5% from 66.6%, which the group attributed primarily to a richer channel mix. Direct-to-consumer continued to take a larger share of the business, rising to 82% of branded product revenues in FY25 from 78% in FY24—an important lever behind the uplift in margin and a key feature of the group’s operating model.
Below gross profit, however, the picture was more mixed. Operating profit fell to €139.5 million from €166.9 million, reflecting higher overheads and sustained investment across retail, people and IT. The company also cited negative operating leverage, particularly at Thom Browne, where the brand’s channel reshaping weighed on performance.
Adjusted EBIT came in at €163 million in FY25, down from €184 million in FY24. The group added that the result included a €10 million provision for expected losses on trade receivables tied to Saks Global following its Chapter 11 filing; excluding that one-off, adjusted EBIT would have been €173 million. The adjusted EBIT margin narrowed to 8.5% from 9.5% a year earlier, as selling, general and administrative expenses rose to €1.0339 billion, representing 53.9% of revenue versus 51.8% in FY24. Marketing spend was steady at €120.7 million.
Ermenegildo Gildo Zegna, executive chairman, positioned the year as a demonstration of resilience amid an uneven luxury backdrop. “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 per cent organic, which translated to a Profit of €109 million, up 20 per cent compared to last year. We also closed the year with a cash surplus of €52 million, further strengthening our Group’s financial flexibility.”
He also signalled caution on the outlook, citing heightened geopolitical risk. “Looking ahead, recent developments 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 deliver on our targets. While we remain vigilant to potential risks, our ambitions are unchanged—and so is our determination to deliver on them, together,” added Zegna.
Segment performance: Zegna steady, Thom Browne pressured
The Zegna segment—covering the Zegna brand, textiles and other activities—generated revenue of €1.3632 billion, up 1.1% year on year and up 3.7% organically. Adjusted EBIT for the segment rose 4.9% to €196.7 million, and the margin improved to 14.4% from 13.9%, supported by the same channel tailwinds, steady revenue progression and cost discipline. At brand level, Zegna revenues increased 1.5% to €1.1816 billion, or 4.7% organically.
Thom Browne remained the drag on group profitability in FY25 as it continued to rationalise wholesale exposure. Revenues fell 14.6% to €268.9 million, or 12.1% organically. Adjusted EBIT dropped sharply to €952 thousand from €27.3 million in FY24, taking the adjusted EBIT margin down to 0.4% from 8.7%. The group linked the decline to a 40% drop in wholesale revenue and investments tied to selected store openings as the brand pushes further toward direct control.
Tom Ford Fashion edged up 0.8% in reported revenue to €317.1 million, with 3.1% organic growth, but remained loss-making at the adjusted EBIT level. Adjusted EBIT was negative €15.5 million versus negative €10.1 million in FY24, reflecting ongoing investment in personnel, IT and the direct-to-consumer network.
Cash position turns positive as capex eases
Capital expenditure reduced to €102.9 million from €125.5 million, with roughly 60% directed toward the store network. The group also invested in a new footwear production facility in Parma and continued IT projects. Zegna ended 2025 with a cash surplus of €52.1 million, a marked swing from net financial indebtedness of €94.2 million the year before—an important balance-sheet outcome alongside the increase in Zegna FY2025 profit.
2026 visibility clouded by geopolitics
Looking ahead, the company said recent Middle East developments have reduced visibility on luxury demand in 2026. Even so, management reiterated its focus on medium-term targets, keeping its 2027 ambitions in place while monitoring risks tied to the duration of the conflict and its potential knock-on effects on global growth and consumer spending. In that context, the group’s accelerating DTC pivot, improving gross margin and stronger cash position appear central to protecting Zegna FY2025 profit momentum as the operating environment becomes more complex.