Ermenegildo Zegna (ZGN) 13 Sep 232023 Q2 Earnings call transcript

Thank you for standing by, and welcome to the Ermenegildo Zegna Group 2023 First Half Results Conference. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. Thank you.

hand Francesca to conference. start like now over to to the I'd over you. Francesca, to

morning, you first Hi. as and available everyone, Good thank website. Zegna Today's materials results on XXXX. our we for Group's for of the half presentation are discuss us, joining

the the can page release Investors related under find You our group press the of website. materials and

Thom Joining and Rodrigo Tagliabue; and CFO, us today Gianluca are Chairman CEO and Browne. of CEO, Gildo Zegna; COO Bazan,

forward-looking statements Before we certain we begin, may point need the that out during I to call. make

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

to I call now hand to the over Gildo am Zegna. pleased

joining and Thank welcome Francesca, today. you, who to is us everybody

our excited from resonate strongly shared this we our to continue saw first them to brands year customer showed shows you trajectory we worldwide. targets of that meet that the July, share revenue are from the to financial strategy on and there. further our mid-term our is period with to Today, half that As are in that back working that we when us details get

a operating world which environment, dynamic by has of marked Mainland been about cautious more the has our us many year around past outlook The China. made on

particularly a of have to we across circumstances, amid we our those trends of achieved. business even continue number be encouraging. can our be see that strategy the and milestones We However, proud

sharpening our thanks player stronger have team, and We we execution. are to strong our management a today been

of of we diversity one The Today, more our have main geographical trend we our balanced a an reason mix. seeing. increasingly are brands the of business geographical is portfolio the all for brands and across and diversified activities also

than areas are milder months the different may healthy. in us Middle U.S. in for the and remain very strength recovery the China expected, Europe, expect particular markets in of our six we the While forward. going be Mainland last both business and East

categories number our the customer Browne and resilience customers the Zegna, customers products and and of in the the FORD; we South doubling after in regions, sign board. operate offered nationalities demand more quality all certain Americas Asian all highest Eastern Thom stayed continue and East including to Latin showing since American and XXXX. Middle TOM doubling. best very quality and seen You've style the different [indiscernible] of across across dynamic in than segment, Operating

our the which you, comes we of XXXX of York, store are I that increase will the substantial plans store shared to in say productivity [indiscernible] Hampton, in Concession China. ahead productivity. Kuwait, recall of you Jinan, Copenhagen, we're of the bulk pleased a store after Saks our by in were its XXXX resuming its in in Zegna the rightsizing, first the expansion year Made-to-Measure by were few leveraging including previous selected footprint has its Zegna location, now seven now of direct store consolidating new exceeded half the peak our positioning and and with network performing a which is the stores the levels, increase growth for with from very and brand of well New very, But East new we years gradual store XX%

of a traceable one-of-a-kind created are we new cashmere cashmere cashmere Oasi inspired brand. between Last how Zegna cashmere, Statesman, We Elder example great and a ideas by we collection brand with colorful LA-based beyond yarn week and using we celebrated Zegna a initiatives. specialist as with our playful and Zegna keep largely animating the Oasi in partnership Zegna and the

the celebrates anniversary and this commemorated around brand Thom monography brings legacy of first and behind very year it. brand Browne, XXth saw year brand the This highs Paris Browne's new a incredible expansion Thom's the available. also Thom footprint this but taking space show in of For bringing that in Couture awareness, vision the in comprehensive and the creativity advantage in we Haute store also of the to the white are brand's investing

just of Group. debut and TOM our a the Finally, future FASHION the are Gavazza Zegna will week. as of shown will very we have our FORD Milan part excited TOM addition, FORD newest creative Fashion And of Hawkins, that, in before Lelio days director, CEO FORD few of its FASHION the new collection Peter as a for FASHION TOM join Week over

discuss will marketing half we that this as like would for are our as of network growth through achievements reflects moment, the that I have well illustrate all underscore directly our our year. brands a operated But but summarized, results financial only the we result that investing our of for the also just In across sustainable long-term to first, stores. I growing not

significant described, to XXX the of proud the as the group's reflecting rose the point jump I though enjoy Zegna XX.X% led just adjusted margin are for which XX.X% EBIT particularly to profitability segment segment point EBIT basis even XXX we adjusted strength to that basis investing have by recorded by I'm growth. increase a the And margin

X number highlights. Now please financial turn key to for Slide

XX.X% we growth million that organic. increase During of saw revenue, the XXXX, was EURXXX year-over-year year-over-year in first of revenue, half XX.X% of reaching a

strong half We year. of in last also million the first increase of an year reaching EURXX.X from year-over-year the profit EURXX recorded XXX.X% million,

X.X% in margin to half the first profit compared reaching also increased 'XX Our of last year. X.X%

EBIT adjusted of adjusted XX% the total by in for and million margin an year-over-year rose half XX.X%. Our of a EURXXX.X EBIT first

as pleased May targets on in XXXX are during Day to XX, Market and Capital Oasi mid-term our guidance first Zegna. we outlined reaffirm Finally, our

financial for FASHION. very and CMD targets strategy our This than us to of to Stock on the FORD invite you Day, Exchange all our in the Capital be Day, expectation other held York and very, be next to Manhattan. Market to excited you New TOM December I'm at opportunity However, none will Xth you introduce and in update on vision our for

me you. CFO Group turn COO, let from six talk to and through to numbers Tagliabue, the Gianluca Zegna months. the last Now Thank

from it X. Thank I Page you, take Gildo.

now six we seen look have have and to. exciting much more forward We to so months

Gildo six and earlier, mentioned months past revenue currency organic at constant XX.X% and growth XX.X%. robust in both saw group over the respectively As growth, the

growth consolidated remember means April I and TOM license which organic also translated year neutralizing of constant of the acquisitions, means. not out effect dispositions XX. in last and license changes the just delta what of from FORD, in from was was fully this It the means parameter currency, neutralizing year agreement, distribution which but or means

to result of the organic we recorded combination of witnessed segment grew a significant to positive XX.X% saw a segment highlighting response strategy Zegna outperformance mainly market thanks store in channel our strong comps. the as DTC gains the to So our collection. Browne customers' XX.X% Both expansion segments the and growth share One products Thom of Brand execution Zegna due year-over-year and while

on on segment, saw the closed was two few which with and at a positive first occurred after EURXX days. also deal of XX. We million our the TOM April in FORD that impact remember revenues April FASHION end consolidation the of months I a

half been which also to profit as Flipping present to discuss 'XX, I function, the marketing example remember P&L and for by us nature changed we by Page has and format that the the first allows expenses. since anticipated the of to X. from gross

the of a progress have year We far. of increase pleased we to in course made of profitability report with quite the the this are EURXX.X year. so a profit XXX.X% over We million last great over recorded

year. the which DTC gross for came first compared six a the higher channel. result Our a And to the carries gross in improvement at The channel, compared gross million. wholesale profit direct XX.X% of the strength our group's our to strategy, the increased last by margin margin of XX.X% the XX.X% in over to including period EURXXX.X months of is same margin

therefore, strategy, of 'XX Price Brand which the end sales as longer season All with rollout of repositioning; higher of products, a fixed One absorption the a reduction the higher collection on of obsolescence; of percentage drove increase incidence as elements Zegna the part in revenues. and of started of year; lower carry which burden Fall/Winter prior so a profit gross industrial its lifetime essential of cost. these elevated shelves

step-up is the fair quantified half profit TFI or inventory first result purchase us the in our a subsequently Tom of PPA of the Ford, other as effect On the reflects X-K acquired the the the a first of which hand, of SEC filing of partial the factor EURX.X allocation gross to acquisition. million dilutive we in sold was price had XXXX of as to the value in that

EURX.X million, points less effect on this which the So represents gross dilutive is profit. basis a XX more or

X. of is metrics. to execution profitability evident Flipping all the across The strategy Page success and our continued

from saying, success from the strategy, year The last in half productivity the came half margin in, Our main the EURXXX EBIT adjusted EBIT the XXXX million, XX.X% of XX% as close store XX.X% was to for the reflecting is the up adjusted factor. of grew Gildo to last first brand first year.

the efforts FORD expand the the of P&L of FASHION the which royalties charged to Browne investment cost the namely network business, leverage amount Thom pay offsetting on The agreement, months the into in license cost integrating the for to which by of increase for grow TOM we first the the and an we and the effects in have more the business way two DTC EURXXX,XXX. amortization the and is an

Marketing for our Capital personnel, expanding with by year up variable by up last strengthening driven cost year. consolidation were we to and in higher invest Day around in Tom the also world our last which both Our we driven were include experience activities as the as SG&A in as which expenses shared and growing at the XX.X% stores Ford, line continue over XX.X%, personnel higher Markets well strategy expenses, of business.

and segments marketing of incidence Zegna We XXXX. will the we invest FORD and during similar to a spending TOM for FASHION continue higher expect second in or half

expenses, our trajectory future. year, stabilizing the step-up our were X.X% costs year. Despite corporate EURXX.X our to strategy last the last compared X.X% the for is of our rising After cementing increased experienced which faith these revenues and million, in profitability at

be of which maybe of different unevenly the we the semesters. For allocated to second half, of need timing profile mindful the costs to some

I out, as incidence marketing instance, a expenses similar For presenting second higher or some be pointed the half. might on

EURXXX Now margin million. with In segment. revenues Zegna coming EURXXX.X to share Page first segment, Adjusted the landing from XX. the XX.X%. EBIT million in by EBIT let XX.X% to increased period the increase at XX.X% XX.X% while Zegna to details was Starting a recorded for segment up adjusted me the flipping half, some

before, step-up So as percentage mentioning was points. of Gildo X

investment us improvement on The a industrial is of reflects on focus a fact our This fixed the effect area reflects These well area advertising were partially DTC an growth. factors store profitability and for the year is remain positive the particular by the overall by marketing. scale our improvement for positive increased the investment ahead the important curve future. the and of the personnel cost of of us that the and in strategy, and productivity, pricing offset which for there of rest cost in by will

EURXX.X XX.X% we decrease minor XX. The year. Page EURXX.X some Browne, to of Thom to and in adjusted see last network compared central X.X% an with cost store a recorded to EURXXX compared in from On to year to which last million million, the associated million down increase Thom was expansion, the revenues of Browne. EBIT of growth costs strengthening consolidation due of of of phase we expected

and openings debut months with marketing personnel. in Haute of advertising Similar to brand June Browne investing raise store impressive collection awareness, the the Paris 'XX, XX added this Zegna, focus we're also have including in which earlier Couture increased a the year. Thom for XX to resulted in ended We in

the indicate EURX.X fair allocation TF of FASHION, on reflects value. to from recorded preliminary from purchase in fully Also price XX. the FASHION for the as million Page EBIT adjusted process an range was discounts consolidated resulting this recall FORD of which and starting a pro to segment basis EBIT two profitability days, which acquisition. The million. adjusted the of we we the the Moving months April EURX.X and related rata TFI XX. deal important can for market few In EURXX TOM to royalties, million

Page XX.

the items. Let's sheet balance on quickly touch

outflows stood second from of indebtedness July financial the net The million year. will The Browne starting acquisition. largely June effective to affect as acquisition the Thom the related FORD cash outflow Korea Our the stemming of X. was due the at EURXX of half buyback from to TOM FASHION

Zegna recorded network CapEx this in and revenues. the also in Browne which we of million represent the mostly of due to brands, second across EURXX.X And both store year. slightly We X% expansion higher expect CapEx half Thom

saw York, including months mentioned in openings and Browne the stores China. the the in in seven net net Copenhagen, [indiscernible]. Concession, half store same first New openings ones few Europe Zegna saw (ph) Thom that in store Saks Gildo Morris three as such in a smaller and six

CapEx the relocations and or openings, Florence. so have store some Beverly in Austria and we also due Rodeo Drive, of Zegna Some renewals renewed to stores really the Hills were BN relocated like not but

and planned to part never a ones we see that products, One inventory increase we most of Trade XXXX. EURXX point consolidation sales a which of FORD healthy stock working on the FASHION Zegna increase the Net EURXXX million Brand inventory capital where increase effect Essential June increased reflects the out of working of TOM TOM addition, by performance. good FORD because collection effect aim a and which call we million, the was out of of capital as strong are be the we as trade of increase it the

So now XX. Page to flipping

close outlook. I on when of we brief that TOM set the let's May XX. horizon guidance with XX, close we in the I overview didn't FORD. remember the Lastly, a 'XX have

guidance the as we this needs targets we at XXXX. So that the coming FORD least anticipate revised to FASHION on and in And medium-term of Markets more continue TOM indicated to trajectory Day. the and December Capital billion margin meet our by EURX be EBIT explicit XX% net adjusted of in we We on be will target. read

Now to close. back to Gildo

rest six explanation. year forward for really of very Yeah. see, and it the on a positive Thank are an been has the as you, you a ground. looking think can I Gianluca, to we continuous thorough And impressive months

really and flag turn to want Day to forward Market being back Stock to FASHION. sharing we at be we be I look TOM second-ever in Before to Capital X December we'll Exchange more medium again first which will York updated long-term include New about the York for our hosting details that target, day time the Q&A, year our on listing and to New this and since

in you there. Thank see you. to hope I So good numbers

you Gildo. very much, Gianluca Thank and

over open We to now I manage to Q&A the will would up session. call questions. very you hand to Thank any much. for the operator instructions and like the provide

And your the Huang from question of UBS. Instructions] from Chris line first [Operator comes

open. is line Your

afternoon is Good two thank Hello. taking and This I for from Hi. Huang you have questions. Chris please. questions, UBS. my

mild? maybe on that so especially on you how Chinese which QX? So Firstly, the by mentioned can on a comment press compared quarter bit third release on to two-year seems far and QX kind super, TOM of be Europeans evolved and the you the a stack, will the quantification growth to helpful. any the consumer in excluding Americans, more nationality and that has the the focusing be FORD super recovery mainly So little

HX there My like of second question is phasing on will be seems in margins margins. some effect versus HX. It

expect should for bit the you versus you some for that mentioned of level maybe little if quantify CMD comment can lastly, profitability in earlier full good You HX, kind but marketing is more the spend HX? Thank can you we much. And sales TOM thoughts how you a brand's December, high possible? on before representation HX a potential percentage that in maybe a much year? expect higher first And very if can your for on the of HX just X.X% on just you FORD, share the on

it. I So take

follow. maybe will You can and start Gildo

nationality. by growth The

some nationalities seen us. have we for So extremely exploding

like reach had board Europeans look brand Latin Americans, Southeast a across Americans, doubling level, So like stack; probably tremendous of we Middle see ballpark a strategy if the we they success so and the but Asia; step-up. some significant like like on also two-year doubling the didn't nationalities Eastern, the

spend so situation a in cluster, they the wherever are we seeing in we and rebound seeing some Hong XXXX, year-to-date to a we year-to-date. third Asia. of compared flattish because actually are On average Chinese seeing on are cluster the traction with seeing appetite the we Macau, softer uneven quarter Chinese the Kong are than good It's

some instance affected. China Mainland and namely seeing X we are within affected, and which cities, seeing less X more are Tier which others, are We some areas are Shanghai, for

year-to-date the to view to some you So a XXXX. last it's weeks, softer is helicopter give to in And performance. this But draw line. hard flattish

than has can more in add. probably been me Gildo China he so recently

in of China difference apparent in the mood a actually Yeah. between and was two ago was quite China. Hong Kong I weeks and it rest

landlords, we looking can confirm several in by meeting can I China. tell And So Hong with comeback positive we that are term and both of remain a on for Macau. but softness sign short I mid- term, you to long strong, Mainland strong in Kong

new our Zegna, of penetration. three lots for brands. will but exciting are the only continue for We not projects very very, There

As a FORD our ground Lelio of new a for matter the in Gavazza, with FORD. TOM TOM inroad preparing I CEO, stronger did of fact trip a

Rodrigo in China. you As will tell opening the several Thom Browne of of more

incredible by we it's Probably to that time buying. was that very, customer, fact our with our new and think are at expectation to becoming the it superior I proven stress has be customer. than the resilience right important of particular popular very this and repeat in new correct the American lots strategy

in had an of very and new customers. Angeles innovation, Elder of event just welcoming Los We exciting with Statesman in in incredible cashmere terms very, terms

also why saying more that this to positive also, think the again brand. Eastern also more I just the customer and So will regardless we more economy and Middle Saudi. popular way we stay that the one opening becoming are -- I We we are with of there. strong resilience store growing I from That's American do how than of on think believe that. remain Without

the for goal, the fact are I Last been hot good and that retail I really only that can anticipated we more And quickly Truly specific, positive. and gain. new our not would in summer a also opportunities. very but that the productivity in opening. has overall, There so seeing I the are climate, say be think And it's for moving fact Europe, we tell the for Europe grounds store of that Europe, I are was material seeing you that health but direction. plus cannot we

we broad ago so a said our thing. three and So in is can more okay, enough, think if overall open Europe positive we there over years we distribution stores that

specific cannot have FORD. far. been we on than more TOM question so be Last Unfortunately, we

how want Market Just what before I will to in surely a talking the days have patient. on we brand at about want Day, be do And we to couple and you be we to of FORD go we Capital maybe but the a are be lot patient TOM show. think right and far trajectory. But

a team led the and We XXst will glittering Thank fashion of have prepared him you yourself strong the show by reaction the Milan. on September in see of you.

for Gianluca, expenses the margin And question.

Margin, as and last second of now from Statement activation we Singapore starting have the Elder more weight also we Chengdu. and marketing I have half before, said week on the events in

probably that point or So you the second increase that the percentage sense, believe to overburden to you of the equal, that spending half the a to more is slightly being half of that half. could into give being need the that expect in be things fact X.X I and be point moving spent first X.X on second the marketing all reflects not

months months. no for of apart For major there TOM the two from the six rest, addition is difference instead of FORD

Americans if focus I consumers the that? -- share more the That’s helpful. if QX XXXX maybe super you accelerated you. have so they trends, doubled versus on of Europeans so on color Thank Can can or But commented bit Okay. you positive a appreciate Thank if also decelerated quantify sign. I sequential just very that kind is how that just have a American we little may. broadly And you. that and far? follow-up, you in

not seeing We a are change.

performance. seeing are steady We

first seeing no August the from have July half. been demand good different We Americans, and than

the seeing Europeans. interest from the same continue brand We for

We are interest from same seeing the Eastern. Middle

not seeing a are that point on an we inflection So change, side.

in On spent they that abroad. were the vacationing August lot abroad, contrary, if July I a think they and

we that in States. is say fire if of must start no I on are 'XX and far a back in are America, whatsoever we are than price more Made-to-Measure that things, peak and resistance they back product to there are is spending you and as we And the them that exclusive do. area positive Made-to-Measure. offer top the range one Now

is we house what of the there a hold Uber Elder to we around have and luxury; or and have in [indiscernible] job resistance reach money shop we renewed we do we location. of price is the whenever out and the home lot a staff, must Zegna, with that their that the they're reached collection, they outreach America is customer Now the their that highest and right incredible And in is doing and no I for means to to our the at and there the are back. fantastic world staff an it Statement, the spend say the office and they immensely appreciation come

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positive we to that. this but So on to sure we continue have remain make trend, very

the to in Thank CMD looking forward and December. Okay. you

question, Thank second the you, Can have we please? Chris.

from Bank. Matthew Yes, your of from the comes course. [Operator line question Garland Instructions] next And of Deutsche

for Thanks my taking questions. I had a couple. just Hi.

further of the you're I the on EBIT. in at of this where any just that guidance segments for details profitability just you much thinking how guess XX% XX% I First, further XH given Can medium-term of that are this upside adjusted sort give that least terms guess than year? stage of at

helped has for half price price the how year, some of sort about can contribution brands? much half or the first increases of of second maybe of individual in year, In of growth when terms details sort absolute the the if give you you're question second the my mix thinking and terms in this of

maybe partnership. be I in Real that Thanks any through? details if partnership can you Madrid's around last accelerating more wonder give around terms then opportunities come from would the And just you I they and guess much. when of sales the see might my question very

Yeah.

with me last one. Let start the

is of Madrid the Real example the awareness brand on the how one to interest that think good of expand I and Zegna.

sales what to how We to did special But hard think the had we the weight it's together. of and I a that we incremental. potential can Now strength is new reached do. we in Made-to-Measure much capsule is the the number had of brand capitalize so customer

today, it you this I So We is I that do Real can you gain if And give quantitative do to a the believe productivity tell that again. we had going Madrid had way there. I and would to mature. tell world. if work in is it decide around do are I would again, are we number have of the see But expand numbers, can the we together. we can part to stores effect you that we very several To do working that we to it

also part delighting. is our Real Madrid think of I And

that if is the think Real think Madrid so watch you're even soccer (ph) I not interested Easter a of of their matches. one to fan, you're that and I soccer

offer to this quite is customer being experience loyal So our able unique. to

tool. So it's an incredible

As are is Zegna becoming using much a as Oasi Statement as done we as [indiscernible] have Elder Zegna, much Oasi and not project. we with

lots top lots and working have inviting of interest. incredible beauty on our to of dream visit aficionado our discover becoming the He's we to started are explore and seeing to an that and project and customer we by

our creating part and the customers. it's part delighting experience around storytelling it's of So and of

traction a on we think that. good see I

the mix, price want On you share. to

is mix think compared I to component last that an year. important the

products; last and pure to of cashmere year and don't. we assortment still Zizenia, linen traceable year allocated year This elevated this the our we the open-to-buy shown remember You big in have we the portion stores summer. had best [indiscernible], in a

has Definitely which ticket, the moved a digit increases, increase. up has for covers product been driver of cost which of the is has there solid and gone component the So of like-for-like also up. double one price average

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So and more we well see the quality on level some one elevating our price opportunity adjustments as of more side the as both assortment. the for and

On Winter This had side, last the price the last element last 'XX, the year 'XX, helped that we the still had the mix we for we year don't. campaign. last other bargain of Spring season

to forward where So helping looking at the we where the managerial point lot of opportunity unit team area still have we retail for advantage we the to configurator; an of a believe this elevate Zegna our ticket. all Since pointing all through the transaction, the us average our styling, training, us one is the levers opportunities, per are is focusing which assortment. through still is are X to full the and attention, transaction through attention, take per complete elevating unit

own upside question first the see to And we XX%. was on the whether and margin our

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I So more Day now that answers. early Capital Markets anticipate December, during give is Otherwise be we the some can the and only you I answer will think we specific.

much questions. very answering you the Thank for

Thank you, Matt.

Daria from question from America. Bank last Nasledysheva the of comes And

is line open. Your

or color also you to that slow softening up two-year Would taking some follow part this. cluster on Greater Daria it on a This I comments interesting be be the rather everyone. in China spending for your attributed on is stack? Bank the Chinese continues from my to you that Hi, Thank wanted questions. China. think of Do of to you're around can America. some true commentary is just to in hear more it Chinese than whole for elsewhere seeing

to months marketing it vary coming from between perspective? how And for the costs? brands making expenses, be where biggest terms in also of does portfolio you marketing to confirm within incidence and you. will increased just see push Where of the wanted you're Thank your this expecting

Yeah.

second one. the with start me Let

lots the because can with to on of anniversary Browne say and TOM and to money that let's on things of will other believe decided which because XXth Zegna that. marketing focused go leave Now But in customer, have year I pick a and had been our spend we on increased because FORD speak part more I has we a is in in see our the because year talk aside the spend in marketing year. on can Grano do result the Europe data. we in later say. you Rodrigo Thom we the particular we this surely second to the on year on Salis budget speak knowing it's it I America two,

Elder buy event you good customers few reach of maybe these store see will examples fun that much high focused they traction think I back will with new the new example not at color, that many Statement, is Zegna and I come Zegna; where they with we'll but on the a end beginning, think did; brand. And that the Oasi the by out that can a I

is would on answer expense that Thom Browne because I I marketing big a driver. positive. Rodrigo, say So that it think the want was you to pick

like Gildo, to. Yes, would

us, increase North in are one we For noticing is a market. significant brand clearly America awareness.

Europe, markets, are North dollars and China, to Korea. continue America, in key invest Japan We which our marketing

branding of those anniversary Shanghai London, view Tokyo, are New client and to with PR, also set a events global embark point and XXth only We point about York. of Seoul, And but a on from are a focused not our from in of view. events

Couture and the in very this We corporate make brand. the Paris how a the of is engaged also in successful for in client clients showroom really when we noticed exclusive have had personal and July incredible events and show the Couture you in appointment

significant dollars around at very we brand gets with same Board been we've both that to are and when clients, of on three the years. to it's but time investing and it very expand the last focused marketing the larger So to the a marketing support audience for committed the the globe elevated

Yeah.

the again on Let pick China. me softness in

Gianluca been I sign is an because As yes, the months of said say in this Mainland repeated, quarter and would there surely I quite some six first strong. softness China in have

a Hong comeback see and Macau. However, we in Kong strong

say China long back be that, have any and the have to It's So tell. two continue? in particular of good Europe United buying we we How I this of outside would seen Chinese And States. flux highlighted. hard a think will not have yes, not surely phenomenon Chinese seen in in to Asia, I top the in on

as entire said, region. on remain But midterm the we the positive of I comeback

attention. first market matter a the for following that world with surely of not part and a a leaving could. that good of Asia of are yet go this great today another the we of As we and to Asia must as since we lot penetrated in that's Southeast I I'm become have up Southeast had year part stronger the even say we fact, that want area

year QX last period. looking add much closing. to just us had last fairly a remind of the stores. for was pace was a in double-digit QX very I by normal range quarter of ahead year We everybody, closing affected

area the seeing So less. mentioning, some we ahead, are And the cities its way Mainland looking easier comparison. across China in of Gildo was cities softness. the board; as By not more, some

of but point in in Asia. And Asia, also XXXX seeing of opposite, an Kong we see the the used are out still than to Chinese COVID. are the we If volumes and XX% beyond rest is Macau, That -- to on before we seeing more result the we indication. number seeing are Hong need we good

to very yet of level We not XXXX Asia. close the levels while XXXX in at of are we are the

I just you volumes just much. XXXX, Thank the cluster? Chinese overall you're XX% of to volumes very confirm that saying Can Chinese of is

level in Europe not in compared in Chinese purchasing to 'XX are this purchasing 'XX. we Europe of yet to year, Chinese the

Chinese Europe. Just in purchasing

Chinese not sure and Just that flat not are Chinese I'm overall overall. saying means it's to be that. misunderstood,

it So it's so By for the yet only COVID. you might our not brands, see not the used demand in are as not for other be as before brand, it's seeing way so to huge. -- Europe Chinese we of

partial. it's So

is way. with in the data line the which global And by

It's very you in much that Global line Blue with data the from Travel Retail. or see

So we of the at yet XXXX seeing Europe. Chinese are not in levels

Thank it or volumes is you. And value?

Both.

value. I'm revenues. We are counting seeing

Thank you.

Your welcome.

they Q&A to that would I'd for closing remarks make. to the the brings And hand team over us of to end like the session. any like to

Thank very everyone, much, you today. joining us for

you will New on you revenue. Xth We see the December. then on Goodbye. QX and XXrd hopefully in back with of be See our York of October the

today's concludes call. This conference

today. you now joining your Thank for disconnect may lines. You us