Ermenegildo Zegna (ZGN) Q3 2026 earnings call transcript

On our handover to Paolo Durante, Chief of External Relations and Sustainability. Thank you. Thank you, Pareto, and good morning, good afternoon, everyone. Thank you for being with us. As usual, our call is led by John Luca Taliabue, Group CEO. We start commenting our third quarter revenue performance. John Luca will then share his closing remarks and take you through some of the quarter's key moments. The new Zinger campaigns dedicated to Sumizura and the Farcoon jacket and spring summer 2027 fashion shows of Tom Ford and Tom Brown. But first, let's go to our revenue results key highlights on page 10 of the presentation.

As always, when commenting on revenues, I will refer to the organic performance, which includes foreign exchanging, but, therefore, better reflects the underlying business dynamics. In the third quarter of 2026, the group reached 434 million euro in revenues, up plus 8%, showing continuous strength in the DTC channel, which rose 11%, with all regions contributing positively to this performance. Going down to page 11, and I will comment two, three performance by brand starting with Zinger. Zinger brand continued to lead the group growth, according to 184 million revenues, plus 13%, a performer, which has been driven by a very solid DTC channel across all regions. Tom Brown reported 45 million euro of revenues down 7%, reflecting a more challenging consumer environment in greater China, and the ongoing personalization of the wholesale channel.

Comfor fashion, 70 million euro in Q3 up 5%, with both DTC and all sale positive contributing to this performance. And finally, on textile, revenues were up 5%, while other revenues, which, as you know, mainly related to where garments produced for third-party brands, was negative 40% of the very small basis. So, let's move now to page 12, revenues by geographic areas. I will start commenting in the first nine months of the year, representing the 35% of group revenues. EMEA revenues were up 6% in the third quarter, supported by double-digit growth at Zinger, partially offset by the negative wholesale performance at Tom Brown and Tom Ford fashion. The Middle East showed the strong sequential improvement in the quarter with double-digit performance in Q3.

The Americas, America's represented 31% of group revenues in the first nine months. In the third quarter, this region recorded a 14% growth, led by double-digit growth at Zinger DTC, partially offset by the climate in the brands wholesale channel, also Tom Ford fashion, solid re-contributed to the region's growth. Moving now to Greater China region, which accounted for 22% of revenues, total revenues, in the first nine months of DCR. In the third quarter, GCR revenues increased by 6%. Zinger DTC continued to deliver solid growth in the region despite the increasingly challenging environment, partially offset this performance by a negative performance at Tom Brown and Tom Ford fashion. And finally, the rest of our factor, 12% of group nine month revenues reported a plus 5% growth in the third quarter.

Zinger and Tom fashion delivered the positive performance while Tom Brown revenues remained broadly in line with the prior year. I will skip to comment on pages 13. Let me just say that in the first nine months of 2026, DTC for the group accounted for 85% of branded revenues, 3% point higher than the prior year. So from 82, we moved to 85%. And then now let's go to page 14 of the presentation. And let's deep dive on Zinger brand performance. In the third quarter of this year, Zinger DTC revenues grew 16% with, as I said, very good performance across all regions. The Americas, once again, outperformed the average of the revenues improved sequentially and delivered double digit growth while GCR also remained on a steady growth with the Chinese cluster accelerating in the quarter to a double digit performance.

In terms of retail network, Zinger closed a four net dose during the quarter. In the old sale revenues were down eight percent, reflecting our continuous strategic focus on a retail first business model and on delivering a more exclusive customer experience. We confirmed that we expect Zinger brand or sale channel to be down in the low teens by the year end.

Now, page 15, Tom Brown revenues by distribution channel. In the third quarter, Tom Brown DTC revenues declined 7%. This performance has been impacted by a more challenging environment in some key markets, in particular in Greater China region. There's low down in the quarter. They're also reflected the first fall deliveries that were not optimally balanced, in particular in terms of weights or fabric weights, as well as some deliveries shifts.

In terms of retail network, the brand opened one dose net during the quarter, including the new store at the Shanghai Plaza 66. The wholesale channel for Tom Brown reported 11% organic decline, reflecting the ongoing streamlining of the channel. For the full year, we expect a trend broadly in line with the first nine months. So let's move now to page 16, Tom Ford fashion in the third quarter supported by positive contribution from America's EMEA and the rest of our pack. The performance was also in the quarter has been also impacted by different cadence of deliveries compared to the last year, a timing effect, which will be neutralized into four.

In terms of retail network, Tom Ford fashion does not remain unchanged during the quarter on a net basis. Wholesaler, Wholesaler revenues were up 9%, reflecting the positive reception of the full winter collections among our wholesale partners. For the full year, we confirm we expect to have a low single digit growth for this channel. Page 17, or much to add, as usual, you can find our group so network. And with this, I'll end over to John Luca for his remarks. Thank you.

Thank you, Paula. Good afternoon. Good morning, everyone. Let me also welcome you to the call. Paula said we are pleased with our third quarter revenue performance driven in particular by the ongoing solid momentum of the Zena brand, which showed a very good DTC performance across all regions. These results reflect the successful execution of a strategy that we have been pursuing consistently. The momentum we first built in the Americas and in the Middle East is now increasingly extending to continental Europe and to GCR, broadening the foundations of our group.

This is evident not only in the brand's performance across regions and customer nationalities, but also across product categories and client segments. Zena brand is growing with existing and new clients across all categories led by Sumizura, luxury, digital wear, and the continuous strength of our footwear offering. Zena brand is unique. Its uniqueness is rooted in three pillars, legacy, family craftsmanship. By staying true to its identity and uncompromising positioning, while connecting with distinctive communities, the brand is increasingly attracting both loyal as well as new customers across markets. And within new clients, we see a promising pattern of new clients returning for a second purchase. Our recent fall winter Sumizura campaign from father to son was not only commercial success, but even more importantly, a compelling expression of the brand vision and strategic direction.

Another important milestone was the September fashion issue of the financial times, how to spend it, featuring the first joint interview with our brand, Zena brand's co-CEO, Eduardo and Andrew Zena, alongside our executive chairman, Gido. Set at the original, the story fully captured the essence of the Zena legacy, a unique heritage, a strong sense of continuity, and the shared vision for the future.

Moving now to comfort fashion, I want to start with the recent spring, summer 27 fashion show, El Dimpares at the end of September, that was either Zacharmann fourth collection for the house. I believe that either and the entire Tom Ford fashion team are defining the evolution of Tom Ford fashion identity into the landscape. Tom Ford fashion is continuing to evolve towards a more intimate interpretation of the elegant selection. The leatherwear, tuxedo, eveningwear, remain enduring coats of the house, while new expressions are taking shape, notably a stronger tailoring proposition, including tailoring for women.

We are now focused on translating the Tom Ford fashion creative momentum into increasingly tangible results, strengthening its positioning in the US while broadening audience global product is clearly an important part of this journey. We are continuing to refine the collections across both men's wear and women's wear, and we are encouraged by the performance of women's wear, which outperformments albeit albeit from a smaller base. At the same time, we see further opportunity to sharpen the proposition across seasons. We are also continuing to strengthen our retail footprint. Tom Ford fashion has just opened a beautiful new store in Costa Mesa, California, with two more openings in the US coming shortly. One is San Diego, the second Balarbor Miami.

Let me now turn to Tom Brown, pew three was a challenging quarter for the brand. As planned, we did not have the contribution from the ASICS collaboration, while the sharp deterioration in consumer demand across Asia starting with China created an additional ad went. In VTC, July and August were the most challenging months, September and October so far have shown some improvements, but we remain cautious given the continuity in the markets. At the same time, we are seeing encouraging signs around the brand. The highlight claimed New York spring 27 fashion show held in September, together with the launch of the Tom Brown Bose headphones collaboration held slightly improving momentum in the recent weeks.

Our priorities are clear for Tom Brown, a highly selective approach to new store openings, a stronger in store product proposition in terms of categories mix and weights, a more flexible use of branding systems, alongside a communication strategy aimed at engaging a broader audience, while remaining firmly rooted in the brand's distinctive codes and identity, all with one key goal improving retail productivity. Some is completing his team by your end, which will bring fresh energy to the brand. The recently opened Tom Brown store at Plaza 66 in Shanghai is a good example of how we are continuing to elevate the brand's retail expression. A brief word on our textile platform, which continues to perform well, despite the challenging environment, Lanifichot Zhenia, Dondi, Bonauto, and Huertino keep gaining market share, driven by quality, creativity and ongoing innovation.

To conclude, let me say that the fourth quarter, although remaining highly volatile in particular in China, started on a slightly better note for Tom Brown DTC and Tom Ford DTC. While Zhenia DTC continues to deliver, a very solid performance. As our executive chairman, Jill Dozen, in the press release, looking ahead, we remain cautiously confident, knowing that the uncertainty in the global environment remains pretty high. Within this context, what matters most is the solidity of division and the ability to engage with consumers.

The appetite for luxury is can remain strong. Ultimately, the opportunity is there, it is up to each brand to earn its share. And let now open the Q&A session.

Thank you Adrian, three questions. But I think they are a little bit more than three. But let's move to the first one, current rating and quarter and the first two weeks in October. So across Q3, I would not point out any significant difference across the quarter. In the months, if they make a small difference, probably August was likely more softer than the other two months. But I would not say that there has been a major difference across the months. In terms of October, as I said during my speech before, October so far is doing a touch better at group level. Even though as you hold out also some indication from the environment gives some sign of volatility.

Of course, any comment for the trend is related to the DTC. So to give some color on the October month to date by brand, ZENIA is continuing to perform solidly across the regions, all regions. Tom Brown, we are seeing some signs of improvement also supported by a slightly better performance in Asia. And I would say improved merchandise in the store. I've been in many stores in the last couple of weeks also with Sam in Asia, spending many time on the road with them in Asia. And so we have been seeing an improvement in the merchandising execution in the stores. Tom Ford's fashion is benefiting from the bus around the fashion show together with the actions that we are taking to further engage existing clients and attract new ones.

Also, as I said in the last calls, putting some marketing dollars on the table, making a more intense marketing activities both on the one to few events, as well as in the one to many, that is some broadcast amplification of the brand. So in October, happy to see a good start. But we cannot drive this trend of the quarter out of this few weeks. We know that we have still 10 weeks to go, 9, 10 weeks to go. So we are very, as Gilda was saying, we are cautiously confident and optimistic knowing that what's out there, it's partially not in our control, partially not. In terms of China, China performed solidly in the entire quarter and is continuing the same direction in October, while for Tom Brown and Tom Ford, although for Tom Ford, China, Greater China is very small.

We saw a deterioration of the demand in the region over summer, especially from aspirational clients. As I said, the exit rate in October is getting a touch better, yet is not a solid trend that we can project for the year to go. In terms of color, I call out that Kong is performing well, very well. And within mainland China, we see some regions performing much better than others. And I would call out the east side where Shanghai and Anjo and on the west is Chengdu, which is performing better of the other. Okay. And on the Zenga brand, the growth is not coming from space, it's basically entirely comp, as Paula reported also, we closed net for doors.

So there is the addition is not the driver of growth. It's really the productivity and the productivity comes from both number of tickets, as well as a you are where you are, there is a very limited like for like component. And there is a very interesting mix component, which is the elevation of the offering. I think those. I think we answer to the three questions. Next is very comprehensive. Thank you very much, both. Thank you.

Can I can I get to your first question again? Sorry, you asked about the Zenga brand. Yes, it was the performance of the various clusters for Zenga brands because you already commented on the Chinese cluster to Zenga brand. But what about the other clusters? Okay, the Chinese cluster. Yeah, yeah, sorry. I have the cluster comment for Tom Brown as well, given the weakness in the aspirational consumer there. Okay, I take this and then we you help us and refraction the others. But so comment on nationality clusters for Q3 Zenga brand. As we mentioned, and Paula mentioned, GCR clients have presented a sequential improvement going into a double digit growth in Q3.

This is as we said at the beginning, I think that the execution that moved from West to East, we are starting to see some traction. And I think it goes back to executing properly in the strength of the brand, whether it's some areas of the footwear, whether it's Sumizura, whether it's Bandusarium. So it's an holistic success on GCR. It's not just triple stitch. We are seeing the brand taking shape in the proper way. And we are happy to see Q3 with double digit GCR cluster performance. US solid double digit continued in Q3, even a touch better, but still a very solid double digit. Latam strong double digit, where Middle East sound double digit, a couple of markets where a couple of clusters, where we have seen some slight slowdown, but still solidly in the positive territory or European cluster and Korean cluster.

Southeast, which is the last that I was forgetting, Southeast Asia, solid double digit positive. So everything positive, if we have to point out a couple of nationalities that are presented as low down still in the good positive territory is European cluster and Korean cluster. In Tom Brown, we don't report on a nationality and we don't comment, but definitely the Chinese and especially the low tier of Chinese consumers are the ones that have been dragging down the performance in Q3. So I would call out that as the major inflection point for Q3 compared to the first off.

Okay, no, I think that simply the winter adds some some longer deliveries, and especially if you come up with us the year, but it's not it's not a major shift. So I don't think it's a major thing to call out as a driver of inflection between the quarters. And the last one on sales density, I think I got the question, but was it referring to Zena Brand? Yes, thank you Zena Brand. Zena Brand, of course, the productivity is going up because it's the growth that we are projecting is in basically entirely calm. So it's same stores. We are pruning a bit the network, and the numbers, the stores that we're closing are the low performing ones.

So of course there is a growth in productivity. That's the promising part. And also when we talk about Tom Ford, the growth is comp in Q3. And the addition of Tom Brown at this point is very limited. So we had a lift in the first half by space in Tom Brown at this point in Q3 is marginal. The space addition on Tom Ford is entirely calm. Going forward, looking forward, we will have in the next quarters some space addition on Tom Ford, as we mentioned, as Gilda mentioned, also in the interviews. So we just opened Costa Mesa. We are going to open Balarbor and San Diego. We will have the major flagship opening in Q1 of next year in Paris.

So we will enjoy some space addition looking forward, not looking on the next one.

Thank you, Bhumi.

Thank you, Anthony. Sorry. The first one I just answered because yeah, I commented during the speech that we expected Zhenia or say China to be down in the low teens range by year end. So this is the guidance that we confirm is exactly the same we commented in the past.

And now I leave John Luca to comment on China and on Zhenia Tom Brown.

On China, I entered in China. Some cities of tier one are we have in our specific network. We have seen some cities of tier one, as I mentioned before, performing better on Kong in Greater China, on Kong, Shanghai, Angel, and Chengdu. Those are the the region the cities that have been performing better. And some of the tier two cities are like in behind. So that same pattern, it's partially probably external. Partially, it's driven by us because of course we are investing in top stores more than elsewhere. So we are putting the best people, the best merchandising, the best activations. So it's a self fulfilling prophecy to some extent. And partially, it's probably the traffic.

You know, Kong, we are seeing some resurgence of traffic. And in the cities that I mentioned before, we are seeing a solid traffic that probably we are gaining market share with our focused investments in some key doors. In terms of 2027, for the time being, I would stick to what we have said so far. So we are working on the targets that we have said, which is the low range part of the of the range. So the 2.2 billion revenues and 250 million euro of adjusted a bit. And then while entering the year, we will be more specific in guiding you how to split that.

In terms of your fourth demand question, sorry, Antony, you were asking on Tom Brown and our indications on an EBIT closer to breakeven by your end? Or did you ask us something that we didn't get?

I think we are managing the EBIT at group level. We are managing the EBIT at group level towards the current consensus with a different mix compared to probably what we have seen last time. And specifically Tom Brown, we are working to improve the EBIT performance compared to the loss of of H1 to close the year with a slightly more loss, which is different from what we had in mind some some weeks ago. So the overall number we are working to stay in the consensus on Tom Brown, on the back of Q3, we are seeing at this point a full year loss smaller than the loss of H1. Thank you.

Thank you, Antony. And the next one.

Thank you, John. The first question was on Korean and Japan. The second one on marketing is referring to the group and marketing. Yeah, group or brand that you can elaborate just as you think about the holiday season. Okay. Thank you.

On Korean and Japan, I live to Jaluka.

Of course, it's important to underline that for the group, there are very small markets for us overall. On Japan, I talked about cluster. We have seen some softness in Q3, not different than H1, cluster of Japanese. And Korea, as I said before, we have seen some slowdown after very strong first stuff and strong double digit. We are seeing a still a positive performance of Korean's consumer in the positive territory. So this is what we have said. In terms of adding into the winter season, I think at this point, the deliveries are well set. We are seeing a good performance also reflected in the month to date numbers of the winter of Tom Ford, which is picking up well.

We have seen some inflection on the latest deliveries of Tom Brown. We are intensifying the communication side of Tom Ford. Yes. It's an important part for that. We are investing in order to gain benefit from the buzz and the momentum of the brand. And on zenya side, we are seeing across all the months, all the drop, drop one, drop two, drop three, drop four. Of the full winter, we are seeing good reception by the collection. There has been, I think, an important new delivery that is, Pala mentioned before, the Falcon jacket, which is a new iconic piece of the offering. It is an iconic piece in the outer section, in the elevate part of the outer section, which is grounded in sophisticated materials, together with the history of the brand, because it goes back to the story of our founder and the mountains where the family comes from.

So the Falcon jacket was delivered in drop three, and is being well received both in the ready to wear as well on the make two order. We are delivering in drop four, which is now basically new colors. So we are going to build on the success also of these new iconic pieces that are also supported by the communication campaign. And also, again, for zenya, there is an ongoing activity in terms of suite around the world, which is not this that they are very important, particularly also for the fourth quarter.

Okay, let's go to the next one.

Thank you, Natasha. So on the breakdown volume price mix for zenya, what we said that is a balanced contribution of volume tickets and a UR. And behind the UR, it's bigger, the component of mix than the component of like price increase. And for next year, I don't think it's going to, I mean, we don't expect a big difference. There will be a balanced contribution from both volume, i. e. traffic and tickets and conversion, more conversion and traffic and mix of nice mix. I think, and you asked, it's important to be understood. The volume comes from on one side new clients coming into the brand because we, of course, we communicate to the top of the pyramid, but there is, there's no goal of light effect on the lower tier.

So we see more and more people coming into the brand. And when what I said in my speech, also an important indication is the percentage of new clients returning and buying for a second time. So the tickets growth comes from either people coming brand new for people that came in the last 12 months and are coming back. And the percentage of retention of new clients is increasing. So that's why looking forward, we don't see a major change of pattern. Your second question, Natasha was on the sumizura growth and any color on the sumizura performance for the, but also for the other brands.

Genia sumizura is definitely together with Lakshad Lishu or one of the driver of growth. The example I made on the Falcon is this point in time, but we are more and more adding or their mizura on iconic items and those iconic items on mizura with different materials. So different colors are definitely one of the driver of growth. At the same time, this is, to a smaller extent, a driver of growth for Tomforle. We added in this year, some categories like tailoring on women, like leather out of wear, which is men and women. Of course, the also on that side, leveraging on the internal capacity of the factories of the group, this is becoming more and more an important lever for growth.

On Tombron, it's still a smaller business, but definitely that's an in-depth opportunity that we are chasing. Thank you. Thank you.

Thank you, Natasha. Next.

Thank you, Kiara. I'll leave to Jaluca on the wholesale for Tombron and on the group level.

Also, from Tombron, we have been reducing from 2024 through 2026 in a pattern that we all know. But I recall we were at 129 million euro and 24. We went last year to 77 million and this year we are guiding into a decline that is not different than the nine month decline. At this point, the level and the magnitude of Tombron, wholesale business is becoming in the 20% range. It was likely for there. We need to manage that business at this point in that range. So that is more or less what we are looking ahead. We need to see this resized Tombron also business in the 20% range of the brand. For next year, we might have still some plus or minus, but at this point, the biggest change of magnitude had happened.

And looking forward, we need to have that 20% size in mind.

If it's the group level, sorry, and Kiara was asking if we can assume that it's likely better from initially expected than a brand.

Your comment on that issue, if you decline something that is compared to the prior estimate that is the EBIT on Tombron, of course, there will be something of something. Yes.

I think it's more productivity than cost management. As we said, we are investing both on brands, and we are investing also on group initiatives in order to create a group backbone. So today, on cost that we are not squeezing cost that we are to the other side, we are investing. And that was also one of the statement why we moved sideways on the margin. So we are not costing or to stay in the guidance. For 2026.2026. Okay. Thank you.

Thank you, Kiara. Next, there are follow-up questions.

Thank you, Maria. So on Tom Ford, on the deliveries, and so first of all, in all say, there were no changes in, no, no difference in deliveries. The growth that you see in the third quote in the wholesale business is entirely driven by the demand coming from our wholesale partners and the very good reception of our full winter collections. In terms of DTC, what John Lucas had and explained before is that there was some plan that also delivered is a different this year from last year, and we have more going to the end of September and October. So this is what John Lucas had. No match is normally in a small quarter, like Q3, this can create some differences.

In terms of men's wear and women's wear, I would reformulate. It's not that men's wear is underperforming. It's performing well. It's women's wear that is starting from a low base that is ramping up quickly. So of course, then the incidents it's, but it's, I don't want to pass the message that women's wear is not working on Tom. And they are working well. It's, of course, it's the incumbent biggest business and women's wear, which we recognize being an untapped opportunity for the brand is giving signs of growth. That's, I would formulate it in this way.

And she was also asking, Maria was also asking in terms of positioning and think the men's that either act even more from Tom Ford is, the thing is even more different from the Zena men in terms of positioning high luxury, but different, let's say, clients. And of course, very different from that on round one. But I'll leave also John Lucas to comment more.

There is definitely a higher price positioning on Tom Ford, slightly higher price positioning. And then the Zena tailoring. There is definitely a bigger components of evening wear and occasions. So they don't ceremony. So these are probably the biggest difference in terms of occasion of use and price point.

And in terms of all sale for Zena Tom Ford, the next year, for fashion. I think let's freeze it for the next, so at least we guide on 2020 in a very specific way in the next round. Let's move it. Let's move the question, this question to January. Thank you.

Thank you, Chris. As always, a very interesting question. So the first one is on how much of the if I got it, the Chinese cluster growth is also driven by new store openings. Actually, Chris, you mentioned class of 66, but this is a Tom Brown store. We're going to open up. So overall, the trajectory, the positive trajectory that we are observing in Greater China, which ultimately is definitely, as you pointed out, Chris, into an improved productivity per square meter, because definitely we are closing doors, net net, and we are opening better. As you pointed out, we opened the one in class 66 is a temporary. We will open a final store in the mid next year, I would say Q3 of next year.

We are doing investment in people, investment in training. We are improving the network. As you observed, China world was an improvement. We remodeled. Arbor City was an important statement. We are we have been under Angela and Dedo guidance increasing the marketing spending. Some campaigns like the William Chang campaign was very effective in terms of creating buzz around the brand. So altogether, this ultimately ends in an important improvement on the productivity, as well as an increase of both demand from aspirational and potentials in your friends. So we are bringing into the brand fresh new blood, and also what we are observing and carefully measuring. It's the growth not only of the senior friends, but of the potential senior friends, the ones that we are breathing to come and stay with us for a longer journey.

So I think that all the leading indicators we continue monitoring GCR are giving us comfort that we are on the right track. And I think with this, we answer to also the second question. The third one was on the senior friends. So they're all how they're performing. The new friends overall are continuing to grow on a nice double digit in line with our strategy. As I said before, also creating this noble effect on the other clusters. So I think across the regions, we are seeing a good solid growth in the number of the new friends. And this is going back to my comment before. We are nurturing the potential of the new friend in order not to finish with just a few current friends, but continue feeding the pipeline of to be friends.

And potential still there are very important as we can see. I hope we answer your question, Chris. Yes. Thank you.

Let's move to the next one.

Thank you, Robert. Okay, two questions.

Of course, for John Luca, the Zania brand Q4 momentum. I think it's fair to assume, as we said, that we started the quarter in the same trend that we have seen in the last months. So we are confident that this trend will continue. Of course, as we pointed out, all the elements of volatility that are outside of control. But the execution that we have been doing here today, thank you, three, we are confident that we continue will continue to come out.

Also, thank you for.

In terms of assumption in our guidance of reaching the low end of our target range, what are our assumptions in terms of Chinese cluster?

I think it's very granular. I think that we need to, overall, we are seeing if you look at the goal of next year, low range and consensus, there is quite a substantial step up. So everything, we are assuming that all the different components, whether they're lagging me on brands or whether it's the Zania brand in its different forms of geography, will contribute in this important step up that we are setting ourselves as the target for next year. So I think everything we expect to continue executing well in America, definitely, we expect to have a further journey of improvement in greater China. So all the different components need to give their contribution to bring, to fill the bridge between the current 2026 consensus and the 20 to 150 million of it.

We expect all of them and who have been in the cycle of budget and we are asking all the different groups of business units and brands of the group to give their contribution, therefore, also China.

Thank you.

I think there is the last one, but I'll ask the operator.

Thank you, Daria. Okay, the first question is, the reason for all sale, did you ask? No, Europe. Europe acceleration, sorry.

Okay, no, because I understand Europe, but okay, Europe acceleration. There is definitely a good performance of Middle East, and that and especially Middle East for Zena DTC, improved sequentially to a solid double digit growth. So that is the biggest driver of the acceleration. Absolutely.

And the second question is, Daria. Basically, the continuation of the Europe question was on how should we incorporate, if anything, the social unrest that exists in France and Italy for the remainder of Q4? Okay. And then Tom Brown, a lunches for composite. Yeah.

But on the second one, clearly, we are monitoring the situation. So far, we didn't have any impact. Of course, the days with the protests, there were a couple of hours, the story has been closed a little bit earlier. But overall, I would say we are not seeing any impact so far. We monitor the situation, we will see the evolution.

In terms of Tom Brown, and the both the collection and the works. In physics, we will have a further project injection in Q4. It's a similar model than the one that we left some clients behind. And so we will reject also for the holiday season more product. There will be further collaboration on ASICS next year. And both in terms of same model, other colors, as well as new models. And we will be more specific starting in January. But we have those are the two biggest product collaboration. Of course, there is also an intrinsic development of products. We are investing more and more on some product categories, whether it's knit, whether it's out or whether it's a jersey.

But we are investing and they think Sam is driving a redesign of the collection architecture, working on weights, working on price levels.

So I think that is the part that should be, aside from the collaboration, the area of the work stream where Sam and Tom together with all the merchandising team are working to create a more balanced product architecture.

Okay, this is the last question.

This is Arita speaking, but before closing the call, let me just highlight that today we have also published the 2027 financial calendar, as you can also see on page 18 of the presentation. So our next release and conference call will take place on February 1st for the full year, 2026 revenues released. Thank you for attending today's call. And of course, if you need any further clarification, do not hesitate to contact us. Have a nice busy day.

Thank you. Bye. Thank you to everybody from us all and to the next one. Thank you.