According to the SEC filing Ermenegildo Zegna N.VVVisa Inc.$327.24-0.95% Valuation Verdict Fairly Valued . (NYSE: ZGN) reported 1Q 26 revenue of €470.2 million, representing a 2.5% decline compared to 1Q 25 (up 7.4% organic). One thing, right in the Zegna stock story this quarter, is the increasing disparity between direct-to-consumer and wholesale sales, with the former category growing fast and the latter shrinking.
The DTC Now represents 85% of Zegna’s revenue breakdown.
Direct-to-consumer (DTC) revenue increased 7.8% year-over-year to €371.9 million (or 14.2% organic), accounting for 85% of the Group’s branded product revenue, from 81% year ago. Branded revenue for wholesale suffered a sharp decline, dropping by 19.1% year over year to €64.3 million, or 17.0% organic.
It is not a coincidence that this split occurs. Zegna has been making an effort to lessen its reliance on third-party retail partners and opt for owned stores, and Q1 2026 data confirm that path is taking place without any opposition. The management talked about a sequential acceleration in this quarter, which is reflected in the data from the channel.
Brand Performance: ZEGNA Leads, Thom Browne Lags
This was a polarizing quarter for the Group, with its three brands heading in opposite directions.
The core ZEGNA brand contributed €310.3 million (+5.9% YoY and +11.3% organic). DTC sales were up 8.6% YoY (+14.1% organic). The Americas and EMEA registered double-digit growth, while Greater China became positive. At the end of the quarter, ZEGNA had 279 stores, up from 3 in the quarter, but only the 3 were closed, and that was considered a foot print optimization rather than a retreat.
Thom Browne’s was the worst quarter. Revenue dropped 9.4% year over year to €58.2 million (down 3.0% organic). However, the figures for DTC sales were positive, increasing a healthy 9.9% YoY (or 20.2% organic), with the buzz around the Thom Browne x Asics sneaker collaboration in March 2026 contributing to this growth.
However, wholesale revenue at Thom Browne fell 59.3% year-over-year to drag the brand into the negative. The brand continues to open 2 net stores in the quarter, leaving it at 125 stores— suggesting a planned, not demand-fueled, wholesale wind-down.
TOM FORD FASHION had the lowest rate of change, and revenues were virtually unchanged, at €67.7 million, an increase of 0.4% YoY, but a healthier 5.4% organic growth. DTC revenue growth was 1.5% YoY (9.2% organic) due to excellent reception of the Spring collection and the brand’s fashion show in Paris in March.
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Geographic Performance: Americas Outperform
The Americas was the standout region, growing by 9.6% compared to the previous year (17.5% organic) to make up €137.0 million, 29% of Group revenue. Greater China had a slight increase of 0.7% YoY and a much larger organic gain of 5.3% indicating that currency effects are mitigating genuine growth momentum in the region.
The region’s greatest contributor of revenue – EMEA – fell 0.8% YoY but recorded a slight organic increase of 1.4%, as the three brands’ DTC performance offset wholesale declines. Rest of APAC fell 0.6% YoY but increased 7.7% organic, led by “good growth” in Korea and Japan.
Zegna Dividend and Balance Sheet
The dividend proposal by Zegna’s board is to distribute €0.12 per ordinary share from the 2025 retained earnings, which totals approximately €32m, if approved by shareholders at the Zegna Annual General Meeting on 26 June 2026. In the event of approval, the ex-date and record date will be July 6, 2026 and the payment date will be July 29, 2026, respectively.
In the full year 2025 results (published on Form 20-F), Zegna reported annual revenues of €1.92 billion, annual net income of €109.49 million and operating cash flow of €335.56 million.
The stockholders’ equity on the books totalled €1.03 billion at the end of the year, compared to €916 million at the end of the previous year, and total debt was near €978 million. This inclusive equity growth against relatively restrained debt provides the Group with sufficient space to continue on its path of DTC growth and brand partnership initiatives without hard pushing their borrowing rates.
Zegna Stock Valuation
Zegna’s trailing P/E currently sits at 31.52 and its forward P/E is at 22.46, which is a decent spread, indicating the market is hoping for more substantial earnings growth in the future. Price to sales is equal to 1.94, and price to book is equal to 3.11. Modest dividend yield of 0.97% but it’s a growth story.
This year, Zegna shares have been under pressure due to geopolitical uncertainty in the luxury industry, especially the uncertainty surrounding the Middle East. The strong organic growth results for Q1 are in fact a sign of underpinning brand demand, particularly in the DTC channel, which is increasingly being undermined by the wholesale channel.
What’s Next for Zegna
Zegna’s next events are preliminary H1 2026 revenue on July 23, 2026, full H1 2026 financial results on September 3, 2026 and revenue for Q3 2026 on October 22, 2026. The key figure to keep an eye on is if the growth of the DTC market, especially in the Americas and the Thom Browne Asics launch, continues to outpace the wholesale market’s decline.
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On its own, the headline revenue growth of just 2.5% looks modest; but assuming this ongoing trade continues to work in the Group’s favor, the underlying growth story appears stronger.
This analysis is based on Ermenegildo Zegna N.V.’s official SEC 8-K filing and Q1 2026 earnings press release dated April 30, 2026, cross-referenced with the company’s Form 20-F annual report. Research and data by Tickzen.app. This article is for informational purposes only and is not investment advice.
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