Ermenegildo Zegna N.V. (NYSE:ZGN) reported third-quarter revenue below expectations on Thursday, despite showing slight growth. The luxury fashion house posted quarterly revenue of €398.2 million, missing analyst projections of €404.2 million. The figure represents a 0.2% year-over-year increase and 3.6% organic growth.
Shares fell 8.97% in premarket trading as investors reacted to the revenue miss.
The shortfall came despite solid momentum in the company’s direct-to-consumer (DTC) channel, which rose 4.5% year over year and 9.1% organically across its three brands. This strength was offset by a strategic pullback in wholesale operations, which dropped 15.5% compared to last year as Zegna continues to prioritize higher-quality distribution and focus on direct retail channels.
“Q3 2025 Group revenues showed an acceleration in the Direct-to-Consumer channel, which recorded a solid +9% organic growth versus the +6% organic reported in the first half of the year,” said Ermenegildo “Gildo” Zegna, Chairman and CEO of the Ermenegildo Zegna Group.
Brand performance
The flagship ZEGNA label grew 2.0% year over year and 5.6% organically, while TOM FORD FASHION posted modest gains of 0.9% and 4.3%, respectively. Thom Browne, however, continued to face headwinds, with revenue down 9.6% year over year despite strong DTC growth.
Regional trends
The Americas delivered the strongest performance, with revenue climbing 8.2% year over year and 12.9% organically. The Greater China region remained a weak spot, recording a 10.8% decline, though sequential improvement was noted compared to prior quarters.
For the first nine months of 2025, total group revenue reached €1.33 billion, down 2.3% from a year earlier but nearly flat on an organic basis at -0.4%.
Looking ahead, Zegna struck a cautious tone: “We expect the environment to remain challenging for our industry, with ongoing uncertainties in consumer demand and currency fluctuations.”