Good morning or good afternoon, all, and welcome to the Ermenegildo Zegna Group FY 2023 financial results call. My name is Adam and I'll be your operator today. If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. I will now hand over to Paola Durante to begin, so Paola, please go ahead when you are ready. Thank you. Thank you and good morning, good afternoon to everyone. Thank you again for joining the Ermenegildo Zegna Group conference call on 2023 full year results. All the materials that we are discussing in the presentation and the press release that was sent previously, you can find it on our group website, ermenegildozegna-group.com. I'm very happy to say that today with us we have the leadership team of the group, including our CEO, Mr. Ermenegildo Zegna, our COO and CFO, Gianluca Tagliabue, and we have also Lelio Gavazza here with us in Milano, CEO of Thom Browne and or Tom Ford, sorry. Fashion. Fashion, yes. Mr. Rodrigo Bazan that has connected, I believe, from Los Angeles, but he's also here with us. Before beginning, I need to point out a little few things that are a little bit boring, but we need to do it. We will make certain during the call, we will make certain forward-looking statements. Our actual results may be materially different from those expressed or implied by these forward-looking statements. Also, I remind you that statements are subject to a number of risks and uncertainties, including those described in our SEC filing. Please refer to the forward-looking statements cautionary included at page 2 of our presentation. Okay, after this, very happy to hand over to our CEO, Mr. Gildo Zegna. Good morning and good afternoon. Thank you, Paola. Thank you for joining us at today's conference call on Zegna Group fiscal year 2023 results. Today, as usual, I would like to give you a brief update on our results from last year, discuss the main accomplishment and project we undertook, and finally, briefly comment on what we are looking forward to this year. I do believe that 2023 was a milestone year for the Ermenegildo Zegna Group. We completed the acquisition of Tom Ford Fashion, which has enriched our group with a third brand that is perfectly complementary to our portfolio. On top of this great addition, the group also achieved outstanding results. Group revenue in 2023, as we shared back in January, reached EUR 1.9 billion, up 28% and up 19% on an organic basis. Our adjusted EBIT reached EUR 220 million, with an adjusted EBIT margin of 11.6% after bases points from 2022 and m ost importantly, our net profit more than doubled compared to 2022. I think it has been a great achievement. I'm also very proud of the progress we made on our sustainability commitments. Caring for nature and the communities around us is a founding value of the group. I'm pleased to say that we delivered on the sustainability commitment we set for 2023. Last year, we formalized the adoption of a group diversity, equity, and inclusion policy, and sent 87% of our employees on topics touching on D, E, and I. We are on track to reach by 2026 50% of key raw materials certified as trace and lower impact. We continued our investment in renewable energy. 97% of energy use in our European operation now comes from renewables. In 2023, we have installed photovoltaic panels on the rooftop of two additional production facilities. But this is only the beginning. As I always say, this is the beginning of the journey, and we have still lots of work to do. Nevertheless, I'm proud of how far we have come and for what it has taken to get there. Now, I want to take a moment to talk about the heart of our business, the three brands and our career. First, Zegna brand. 2023, we continue to build on our successful Zegna, one brand strategy globally. As you know, the Americas and EMEA are ahead of this journey, but we are also starting to reap some rewards in other markets, in particular China. And one of the markets where the journey started later is exactly Greater China. We do recognize that 2024 will still be challenging there due to geopolitical and macro environment, and as we further evolve and develop our customer base, but we see important positive signs, especially the fact that demand for our highest-end product is strong and improving. We're extremely focused on and committed to this region to further enforce the brand awareness of Zegna as the leader in luxury menswear. Talking now about the product of the Zegna brand, in February we launched the Seconds kin collection globally, a selected number of SKUs, including leather outerwear, and the Seconds kin Triple Stitch, our icon that made the finest leather out of Seconds kin. The drop has performed very well in all regions, including China. Looking at distribution, we are even more committed in reinforcing our D2C channel. We will continue to streamline our wholesale distribution, also converting some more brand stores in concession. Finally, one very exciting event coming up for the Zegna brand will be the Milan takeover in April. Where? Sorry, we will take over Milan in April with the event. During the Salone del Mobile, we will launch a new Oasi Zegna at Palazzo Duomo and present the Born in Oasi book, which gathers a unique vision of our founder. We are doing that at the moment when all eyes will be on our great home city, Milan, putting Zegna in front of millions. Next is Thom Browne. In the year 2023, in which the brand celebrated its 20th anniversary, Thom Browne revenue reached EUR 380 million, topping a strong 26% compounded average growth rate since the brand became part of the group. A very nice run, I would say. But the journey just started, and we still have a marathon to do. The brand has huge potential across markets and product to go beyond the EUR 500 million that was my initial target. Finally, Tom Ford Fashion, the new jewel in our group crown. We do believe that there is a huge potential for Tom Ford Fashion. This is confirmed through every conversation I had with Leo about the brand, covering the world, whether it was landlords, with clients, with luxury experts around the globe. They all agree that the brand has room to develop, in particular in women's wear and in leather, a good segment. The brand's creative and artistic direction is strong. You've seen that in the reception of Peter Hawkings's collection to date. CEO Lelio Gavazza, here today with us, is forming a skilled team, starting with head with new heads for Asia and for the Americas. We're also making sure that the brand can leverage our group infrastructure, including our supply chain know-how for both men's and women's tailoring, for CRM and customer engagement system, and develop this Tom Ford Fashion store footprint. We have secured some eight to ten stores as of this year, and we'll start with renovating a few of them. Before I hand over to Gianluca, let me mention an important project. I'm particularly proud of evolving our Filiera. What is our Filiera? It's a new terminology in Italian that is hard to translate in English. However, it's our fully owned and fully integrated supply chain, made of the finest high-end Italian textile platform, integrated with unique luxury manufacturing capacity. Really unique, a unique project in luxury. To reinforce this Filiera, we have recently approved an important new project in Parma. I would call it a breakthrough project, a cutting-edge center for excellence, which will primarily produce men's shoes and leather goods. Designed by the famous Milanese architect Antonio Citterio, who designed our current headquarters in Milan, the facility will sit on a 10-hectare plot of land and function also as an important research and development training center, including our academy. When full and running, the center will employ more than 300 people and will produce a significant portion of group shoes, primarily for Zegna, but it will also serve the other brands. Let me now conclude by saying that, although 2024 will be a volatile year, we remain extremely confident that our path is well traced. Uncertainties can create amazing opportunities. If you have a clear vision and are able to react immediately and firmly, being ready to take all action by executing perfectly around the world. I would like to take the opportunity to share with you some of the actions that we have been working on with our management team. Number one, we are enforcing our team of talents with some key additions in important markets. We will continue to invest on our brand, focusing on key priorities both in terms of marketing and store opening and remodeling. DTC and CRM, two very important parts of our evolution, are our mantra, and it will be even more in the forthcoming months. For Zegna, for Thom Browne, and for Tom Ford, we have to know better and be closer to our customers. Loyal customers are more loyal in challenging times. In the meantime, we have to stay tuned to our people in stores. They are our first ambassadors. We will continue to streamline our wholesale doors, if anything, even more aggressively than initially planned. Last but not least, we are working on continuing to improve store productivity and sell-through, where we have gained a very important step. Let me conclude by reaffirming that our group is a custodian of authenticities. Our role is to protect them since we have been around 114 years. This is our group ambitions, alongside those committed to you at the recent Capital Market Day, which confirmed today. And this is also thanks to the best ingredient. We have three authentic brands, a unique Italian luxury Filiera, a focused, accountable, and responsive management team, a united family with 114 years of heritage. And last but not least, a clear vision that guides our actions. With that in mind, let me turn over to Gianluca to go into the financials in detail. After that, Rodrigo, Leo, and Gianluca and myself will take your questions. Thank you very much. Thank you, Gildo. Good morning. Good afternoon, everybody. So let me move to page 13 of the presentation, where you find the group revenues evolution over the past three years. Preliminary revenues for full year 2023 were already disclosed at the end of January, so there is no news. Therefore, I will not spend much time on this page. Just let me underline that full year 2023 revenues have been in a very good year for our group, with almost 28% reported growth thanks to a double-digit contribution from Zegna and Thom Browne and from the newly added Tom Ford Fashion segment, which contributed EUR 235 million revenues. I remind you also that Tom Ford Fashion has been consolidated for around eight months last year. Let's move to page 14. Before commenting the numbers, I would like to remind you that since 2023, we have changed the way of reporting our P&L, adopting the by-function presentation versus the previous by nature. We believe that this way to represent numbers not only reflects better the way we look at the business, but also can help you understand more our company. For this reason, in the next pages, I will comment the actual numbers underlying their drivers by each P&L line. Let's start from gross profit. In 2023, consolidated gross profit rose by 32% to EUR 1.2 billion, with a margin of 64.3%. The 210 basis points improvement from last year has been largely driven by a better channel mix. As you know, DTC gross margin is higher than the wholesale one, but also by better price price mix and by the scale effect, in particular in the supply chain side, which helped better absorb the industrial fixed cost. Channel mix is estimated to justify about half of this gross profit margin step-up. An important point to underline relates to the Tom Ford Fashion consolidation. You remember that on April 28th of last year, we acquired for roughly an enterprise value of EUR 150 million cash-free, debt-free, and on the basis of normalized working capital, the 85% of Tom International, the holding company that manages the Tom Ford Fashion business, under a 20+10 license agreement with the Estée Lauder Companies. The purchase price allocation, so-called afterwards PPA, of this transaction has been allocated to the assets acquired, including inventories, customer orders, and the license agreement itself, generating some PPA-related charges both at cost of sales and at the SG&A level. Because of this PPA, in 2023 gross profit, we accounted for EUR 15.6 million higher cost of sales related to the step-up of inventory value and the amortization of the value allocated toward this backlog. The majority of this EUR 15.6 million charge is actually related to the inventory. This amount will be largely accounted in 2023 financial, with a smaller tail in 2024. In fact, this year, 2024, we will account the remaining and last 3 to 4 million of this kind of charges in the cost of sales. After this smaller effect in 2024, we will not incur additional costs related to PPA on the cost of sales. Moving to SG&A, they reached in 2024 EUR 901 million with a 47% incidence on revenues, about EUR 200 million higher compared to full year 2023. Let's deep down on this increase of G&A, and I would like to underline a couple of important factors. The Tom Ford consolidation contributed to more than half, some EUR 124 million, to this absolute increase. This amount includes also the royalty fees that Tom Ford pays to Estée Lauder. In addition, it includes the second part of the PPA that I mentioned before, earlier. And that part is related to the amortization of the right of use of the license agreement, which gets amortized over 30 years. In 2023, for the 8-month consolidation, the license amortization was equal to EUR 2.2 million. And in 2024, the amount will be to the tune of EUR 3 million on a 12-month basis. The second relevant item that is important to underline is the impact on SG&A deriving from the acquisition of the Thom Browne South Korean business. I remind you that since July 2023, Thom Browne started to manage directly the 17 stores he had in that market. And as you know, retail generates higher gross profit, but also, on the other side, higher selling expenses compared to the wholesale business. On the other side, it's important to remark that the Zegna segment helped offset some of the above-mentioned negative effects by contributing itself with a positive leverage on SG&A. Just a final comment for those that might have not known the group for long, given that this is the first time we report 2021 SG&A expenses. In 2021, SG&A expenses included some EUR 200 million arising from the business combination with the SPAC that led to the listing of Zegna Group at the end of 2021. So that is the reason of this curve, which presented a high number in 2021. Let's move to marketing expenses. Marketing expenses, page 16, increased to a 6% incidence on revenues, in line with the management plan to further invest on its brand equity value. We remember that this 6% incidence is also affected by a B2B component within our business, which requires very little or no support at all by marketing. And this is the case of textile and third-party brands that together represent roughly 10% of group revenue. So when we look at 6% incidence, we have to bear in mind that this 10% comes with very limited marketing dollars. Page 17, here is the report of our consolidated statement of P&L. I believe we have already thoroughly commented line by line the ones above the operating profit. Let me make here a couple of comments at this point below operating profit on financial income and expenses and on taxes, starting from the financial items. In full year 2023, net financial expenses, including foreign exchange losses, in 2023, they were negative for a combined amount of EUR 36 million versus EUR 49 million negative in 2022. So this EUR 13 million positive swing from 2022 to 2023 arises mainly from three factors. First, lower liabilities from the Thom Browne put option related to better forex. This put option is expressed in dollars and related to higher interest rates, which reduce the net present value of the put itself. These two components more than offset the higher intrinsic fair value of the put deriving from higher expected results of Tom Ford looking forward in the years to come. The second component that generates the positive swing and positive reduction of financial components is the lower hedging cost that we incurred this year. And the third, higher returns from financial assets versus 2022. This effect more than offset the financial cost that emerged with the warrant redemption that occurred and took place at the beginning of 2023, which I recall generated a EUR 22 million charge in our P&L. And as information, the financial expenses, which might help also the analysts to model their projection, the financial expenses related to bank loans and lease liabilities under the IFRS 16 rule were this year in the region of total EUR 30 million. I call out the last point of attention, the EUR 3 million negative related to results from investment accounted at equity value. They refer mainly to Tom Ford results in the four months before our acquisition. And they are related to the deal-related costs incurred by the target company before closing. Therefore, this line is expected to return positive from 2024. Finally, let's talk about taxes. This year, last year, in 2023, we had a favorable effective tax rate in the region of 20%, which has been influenced by a positive tax ruling and by the recognition of DTA connected to some tax losses previously generated. I can anticipate that looking forward for the group, we have in mind a normalized tax rate that is closer to 30% rather than 20%. Moving to page 18, the Adjusted EBIT metric, which is our key metric in terms of analyzing the performance. As Gildo already commented, in full year 2023, our Adjusted EBIT reached EUR 220 million with almost a +40% increase versus last year. This was ahead of our own expectations. Adjusted EBIT margin rose to 11.6%, notwithstanding the dilution effect from exiting the Tom Ford consolidation, which for full year 2023, you can roughly estimate slightly higher than one and a half percentage points, about half of which are coming from the previously mentioned PPA effect on cost of sales. The difference between the Adjusted EBIT, 220, and the operating profit, 208, that is EUR 12 million, is referring to adjustments that in the reported P&L are almost entirely accounted for in the SG&A line. Please, I remember again that all this EUR 12 million adjustment does not include the charges related to the PPA because it's not allowed to have the PPA charges accounted for as an adjusting item. So they are part of our Adjusted EBIT. So the Adjusted EBIT discounts the PPA effect, good or bad on our P&L. Let's look at the result by segment. Moving to page 21, same Zegna segment. As you know, this segment includes both the Zegna brand products and the textile division and third-party brands. It generated 1.3 billion revenues before intergroup revenue elimination, the amount to 33 million. And those are sales of either finished product or textile to Tom Ford and Thom Browne. And it came out with an Adjusted EBIT margin of 14.6% thanks to a higher gross profit margin, a lower incidence positive leverage on SG&A. Both these aspects were supported by the strong 25% organic growth in Zegna brand DTC, which has helped to boost our store productivity, as we said in New York, by almost 50% up in two years, 2023 versus 2021, and was also supported by a positive absorption of fixed costs in supply chain and textile operation by the increased volume of business. This important increase in adjusted EBIT margin arises notwithstanding the decision to enhance the marketing expenses for the Zegna brand, which was disclosed in our prior conversations. Page 23, Thom Browne segment. The segment reaches EUR 380 million before elimination with a 15.5% adjusted EBIT margin. This good result is linked to the positive performance in both channels with DTC channel at +20 organic on full year 2023 and wholesale on +16% organic in full year 2023 after a strong year-end in wholesale with Q4 wholesale deliveries that reported a +40 organic versus Q4 2022. Two words, finally, on the Tom Ford Fashion. Page 25, results were in line with the expectations impacted at adjusted EBIT level by the already mentioned PPA and by the royalty fees. It is important to underline, in particular for 2024, that our priority remains to invest in the business and to set the basis for a successful organization led by the CEO, Lelio Gavazza. On the next pages, we summarize some key results of our consolidated statement of financial position, balance sheet. So let's look at page 27 here. I just call out a couple of elements on the line related to non-current asset because this is the one that is seeing most of growth. So in that line, the growth comes from the following factors t here is a 96 million right of use asset coming from the Tom Ford license agreement. So in the PPA, we allocated, at the time of the closing, 99 million of right of use asset, which gets amortized over 30 years. At the end of the year, it came down to 96. Then there is a goodwill of 24 million related to the Thom Browne South Korea business taken over mid-year. And then there is the increase of right of use asset related to leases, the IFRS 16 rule, whose growth is mostly driven by the addition of Tom Ford Fashion, retail network, and related leases within our consolidated program. Let's go to page 28, where we comment trade working capital. Trade working capital increased in 2023 to a level of EUR 449 million, 23.6% of revenues driven by the normal increase in business, but also by our decision, as you have already seen in the semiannual number of 2023, to invest in Zegna Essentials and Thom Browne Classics, which are continuative collections across the season. This investment impacted inventories, in particular in the first months of 2023. And in fact, if you compare year-end inventory and June inventory of 2023, they are basically in line. So it means that we have plateaued, and now we start normalizing. We have been already starting normalizing the spike coming from this one-time investment on continuative collection. In addition, you should consider that the incidence of revenues on vis-à-vis trade working capital has been penalized by a mathematical factor, given that the addition of working capital coming from Tom Ford, EUR 52 million, is compared to only eight months of revenues of Tom Ford. For the future, our goal is to move gradually towards a 20% incidence of trade working capital on revenues. Page 29, you see a new metric, a new non-IFRS metric that we introduced. Also, listening to your suggestion, is the free cash flow metric. And let me comment this nice EUR 72 million free cash flow generation, which we recorded last year, largely driven by our improved operating profit results. Last year, CapEx was equal to 78 million, around 4% of revenues. But I would like to reiterate what we already commented in New York Capital Market Day and the fact that for 2024 and also 2025, our CapEx should increase as a percentage of revenues slightly above the 5% threshold, given that we are investing in store openings and remodelings and also in the breakthrough project mentioned by Gildo of the new factory in Parma. Actually, this is actually more than a factory, it will be a center of excellence, know-how, and creativity, where we will somehow celebrate our skilled artisans that every day produce luxury shoes for Zegna and for the group in an amazing environment, which will enhance the workforce welfare. Finally, page 30, and this is the bridge of the net financial indebtedness, which, starting from a cash surplus at the end of last year, lands basically at a neutral net debt, net cash position with a slight net financial indebtedness of EUR 11 million after having incurred investment in subsidiaries and where the bulk of the majority of this amount comes from Tom Ford Fashion. With this in mind, let me leave the floor to Gildo for some final remarks on outlook and current trade. Thank you, Gianluca, for the clear presentation. Let me conclude the first part of this call with some remarks on quarter one trend of this year, anticipating a question that I'm sure you will ask us. As you know, we are going to publish quarter one revenue on April 23rd. Detailed infos and questions on Q numbers should be discussed in that occasion, not now. But let me give you here some highlights to help you better understand trends and actions, which we believe might not have been completely understood. Quarter one 2024 revenue result reflects three main trends. Number one, refers to our decision taken a while ago, but reinforced today to further streamline the wholesale distribution, in particular at Thom Browne. We felt that in the current environment, it was the right decision to anticipate some action that we have initially planned over a longer period of time. Secondly, we are seeing some higher-than-expected volatility in Asia, mainly in Greater China and mainly for Thom Browne. For Zegna, the trend in the region largely reflects the one-brand strategy. We see signs confirming that we are moving into the right direction, even if the strategy has yet to be fully completed. For Thom Browne, the trend in Greater China has been influenced by the challenging environment, but also by the need to reinforce the retail organization. On the other side, I have to say that I'm very pleased to see all the other markets for Zegna, in particular the United States, and some key markets like Japan for Thom Browne, growing sound double-digit DTC growth, confirming the strength of our brands. As a result, Q1 revenue is expected to grow in the region of 10% constant forex, while organic performance is expected mid-single-digit negative due to wholesale revenue of Thom Browne, expected to be down high double-digit off a very challenging comparison base. However, looking at full year 2024 and considering revenue consensus numbers, I feel confident that they are achievable. I'm sure we are taking the right action to deliver them. Regarding our mid-term guidance, as already said, I confirm that this guidance is unchanged and confirmed. Thank you. Thank you. Thank you, Gildo. And I leave now the operator to open for the Q&A session. Thank you, operator. Thank you. As a reminder, if you would like to ask a question today, please press star followed by one on your telephone keypad now to enter the queue. When preparing to ask your question, please ensure your headset is fully plugged in and unmuted locally. That's star followed by one. Our first question today comes from Chris Huang from UBS. Chris, your line is open. Please go ahead. Hello. Hi. Thank you for taking my questions. It's Chris Huang from UBS. And I have three questions, please. My first question is on the Chinese consumers. I know this is an H2 P&L call, but are you able to provide any color on how the Chinese cluster has so far performed in 2024? The reason why I'm asking about this is that we have been hearing from some of your peers that trends in March have slowed down after a very solid Chinese New Year. So if you can, in any possibility, comment on month-by-month trends, that would be super, super helpful for us. Secondly, on the guidance you provided for Q1 with organic sales growth to be down mid-single-digit, just to understand a little bit more that you provided wholesale for Thom Browne to be down high double-digit, what kind of level are we expecting here? Just so we can understand better, what is the impact from a challenging environment in Greater China and how much is from wholesale? Because if I just simply did the math, if we're assuming mid-single-digit up for Zegna, to get to mid-single-digit down for the group organically, it means Thom Browne is down around 30%-35% organically. That's my second question. And lastly, on EBIT margin, I remember back in December 2023, you provided some new mid-term targets by 2028, which, if we kind of look at the CAGRs, implies EBIT margin to reach the level of high teens in the mid-term. So if we compare that level to the 12% you printed in 2023, can you just share some thoughts on what should we expect in terms of the cadence of margin expansion in the coming years? Are these targets likely to be front-end or back-end loaded? Thank you so very much. Okay. Thank you, Chris. Regarding your first and second question, we will ask management to add some colors, but actually, such detailed questions have to be then postponed to April 23rd when we release the quarter one numbers. But for sure, we'll ask Gianluca and also our Thom Browne and Tom Ford CEOs to give a little bit of flavor on the Chinese market, which was your first question. Then going into the second one on wholesale, Rodrigo, I'll ask Gianluca to do a couple of comments, but I think also on this one, Rodrigo can comment a little bit more. And I leave then Gianluca for the EBIT CAGR, the third one. So on the call, let me start, Gildo, on Zegna, but I think that we can add color with Thom Browne and Tom Ford. First of all, we have been traveling quite a bit with Leo and Rodrigo in the past few months. So I think we have a good grasp of the Chinese market overall. And I must say that it's challenging, but I think that it's positive mid-term. Surely, we see less traffic than we used to see. So I think that you have to work less transactionally, more relationship-driven with the customer. I think that our outreach platform is very important to reach out to the customer wherever he is or she is. And I think that we are having similar outreach percentages that we have in other countries like the United States, which has been really upfront. I must say that our rebranding strategy is coming up more and more every month. We have been successful with the drop strategy of Zegna, which is the second season by which we have 4-5 drops of merchandise, of innovative merchandise supported by marketing, supported by visual, supported by the event in the store. We see that every time we do that, we have a reaction of our clients in the store. We have created personalized events for high-end merchandise in some of the top cities by sending headquarters people. We had very, very good results. So I would say that from the day of Zegna, where we had an aspirational customer that is partly lost, we have been gaining new customers that are high-end, and we are gaining traction more and more with high-end product. Last but not least, Made-to-Measure. I think that one incredible weapon that we have used around the world and also in China is made to measure, by which we offer a unique assortment of products that is very helpful in reaching out to a special customer that wants to feel exclusive in what they wear, and they're very picky on their choices. So we do remain positive on China. But as I said, it's lower in comparison to countries like America in picking up a trend that we'll get there pretty soon. Lelio, you want to add some color on Tom Ford? Yes, of course. I had a deep traveling in the last months in China. As you know, China for Tom Ford is still a negligible market because we are mainly focalized in America. And I would say that for us, China being a negligible market is a great opportunity for us to expand. This great opportunity has been underlined in the last few months, in particular last year, with a confirmation of the possibility to expand the brand in the market. And this confirmation is tangible with the opening of our new flagship store. It's going to happen at the end of June in one of the most important shopping malls in Beijing, and only with this location, but as well with several other opportunities that we have in China, mainland to open direct-to-consumer boutiques for Tom Ford. I would add with confirmation of some locations that were a little bit under question mark in the previous year that have been confirmed by the landlord. On top of that, we have an addition of a new president coming from one of the top groups of luxury that joined Tom Ford in Shanghai, in charge of Asia Pacific. We have a massive marketing activity that we start to deploy in the next few months where we really connect the brand with the Chinese consumer, aimed to drive this nationality as one of the most important nationalities together with the American that are already there. Can I ask Rodrigo to comment on China for Thom Browne? Sorry. Sure. Sure. Good morning, Chris. I'm calling from Los Angeles. I returned from Hong Kong, Shanghai, Tokyo, and Seoul. Clearly, it's a different environment in China. You still walk the streets, and it's a busy, very busy, incredible market. It's divided by aspirational clients and very committed clients. We're seeing a fantastic trend when it gets to very committed clients such as yourself and MTM and events that we did last year, which we're going to be repeating later on this year. I come from meeting landlords and visiting our teams. The aspirational client is much more challenging in general for everybody. We brought in place a new GM at the beginning of the year. We are focusing 100% on the client connection right now and product confidence within all our teams. That's starting to pay results. We have certain stores that are doing really well, and some others that are more challenging. Still, a highly exciting market, and we need to connect even further with the client and have even more product confidence. From an external point of view, landlords are still really committed to continue to grow with us and waiting for us to have even more activities in the country. Thank you. Thank you. Maybe on wholesale, I'll ask Gianluca to comment a little bit. And then if Rodrigo wants to provide some more colors, feel free to jump in. Yeah. So So as Paola was mentioning, you cannot be specific on numbers and figures. I think, Chris, you are pretty good in triangulating numbers, so I'll let you make the math. Anyway, I confirm that Thom Browne wholesale revenues are declining high double-digit. And this is a result of two main planned factors. The first one relates to a different timing in deliveries. As we anticipated during the full-year revenues conference call in January, we said that Thom Browne wholesale deliveries were strong in Q4 compared to the year before. If you remind, there was a +40% organic growth in Q4 vis-à-vis Q4 2022. In addition, Q1 2023, 23 days of comparison, I go by article it was close to EUR 70 million over a full-year wholesale of EUR 195 million was also particularly challenging. So we have a Q1 that is facing a strong comparison in Q1 last year and is taking the effects of a strong Q4 last year. So this is the first timing effect. Then there is a second that is not timing, but it's a structural channel strategy decision about wholesale door selection. Rodrigo mentioned the decision of streamlining the wholesale distribution, especially even more now with some situation of clients facing some credit risks. So I think I asked Rodrigo to comment further about this decision that was taken. We probably have decided to go quicker and accelerate on a journey that was already in the books. So that is no different than what we had in mind, but we just pushed pedal to the metal on this, given the context. And I invite Rodrigo to give some flavor around it. So thank you, Gianluca. Yeah, to give more background, I think we need to include the e-business element, which we all have seen the big shifts in ownerships and even changes. We have closed down certain e-businesses, relationships we have had for the past years. And we see a significant reduction also in stock being offered on e-businesses. Further to that, we made a strategic choice to reduce even further any stock available through those channels. And as Gianluca mentioned, as we've been growing our DTC channels for the past eight years from four directly operated stores to 90 operated stores, we felt it was very more important to be confident on reducing any stock that could compete with our own DTC. So this is a choice, obviously, a challenging wholesale market around the globe. But at the same time, wholesale remains a great channel. I'm here in Saks. We have Saks wholesale with a fantastic event for VICs and celebrities with an exclusive collection in Los Angeles of accessories and clothing. Wholesale, we continue to believe, is an important channel, but we need to make a choice on the volumes that we put on wholesale. As Gianluca mentioned, we made a strategic choice to further accelerate any reduction that we felt it was necessary to further strengthen our business, which is a short-term pain but a long-term gain. Thank you. Thank you. And maybe there was a third question on the EBIT CAGR trajectory from Chris. I recall something that we mentioned, but I'll make it more explicit. For Tom Ford, this year is the foundational year. So we are building structure, people, opening stores. And as it's normal, the first year of a store is not the second year in terms of performance. So we are not seeing a linear pattern of growth of EBIT. We expect it to have an acceleration. We have said that we have a couple of years of overinvestment in CapEx, which translates into depreciation. We have the fact that Tom Ford will be consolidated 12 months and not eight months. Of course, then we don't have the PPA this year. But still, we see the growth at our EBIT more intense in years after this than in 2024. Okay. So we can move to the next question, operator. If you are fine, Chris, if you have any follow-up, we are here. The next question comes from Anthony Charchafji from BNP Paribas. Anthony, your line is open. Yes. Thank you. Good morning. It's Anthony Charchafji from BNP. Hi. Okay. I have two questions. I mean, thanks for the good yeah, for the good description before. Just one on current trading, and the remaining will be on the margin. So just if you can give us a bit your thought on the US market in 2024. Sorry, Anthony. I don't know if it's our problem, but we don't hear you so well. Try again. Try again. Yep. Can you hear me better? Yes. Much better. Much better? Okay. Sorry. Yeah. So first question would be on the U.S. trend, I guess, that 2024. I mean, at a time where the slowdown was already present in 2023 for most of the luxury sector, I mean, for you, it seems that you are quite resilient in the region and that you seem more optimistic than your comment on China. So maybe if you can share your thought on the U.S. market currently. My second question would be on the marketing. So I understand that at Thom Browne, there have been no step-up in marketing in 2023, though I would say that it's starting from a low base. Should we expect at some point, yeah, a marketing step-up also at Thom Browne to drive a bit the new addition, women's wear, and all that? The last question would be on the gross margin. I mean, a very nice improvement in 2023. I understand it was driven specifically by Thom Browne. Can you tell us if there is more upside? And maybe for Zegna, I mean, knowing that there is this B2B business that is maybe 30%-35% margin, so a bit dilutive, I mean, do you see further growth in 2024 and beyond, or should we expect something rather flat? Thank you. Okay. Perfect. Thank you. So I think we have a first question on U.S. trend. And I'll ask Gildo to comment, in particular for Zegna, then we see if we need some more clarity. Marketing, I'll leave it to Thom Browne. And then gross margin is Gianluca's topic. Gildo. United States. We remain positive for this year as we were last year. We always remain positive that the American will visit Europe as they did last summer. I think that Zegna has been able to penetrate in the perception of the upper-scale American in a great way, just hitting on the iconic pieces. I think our icon, I mean, is really being the shoes of the luxury crowd. Personalization is another very important attraction. I think that it has been a cultural change of our company and of our people, many addition of top retailer and merchandiser marketing people in our organization that has led the transformation from a wholesale culture into a retail culture. This rebranding, going from a perceived of a clothing, of a tailoring company into a luxury leisurewear and accessory company, has really worked out extremely well around the States. I think that there is no price resistance. That's the other thing. We are offering an incredible service in every store. Increasing the productivity is quite sensational. And so I think that we have been appreciated thanks to our strong brand, but thanks to the changes we brought. And we are gaining not only more confidence from the loyal Zegna customer that were very business-oriented, also to new customer, a younger one. So I think that the major changes have been brought into the perception of the brand by offering new products and superior service. Another important factor that led to the change of retail from a wholesale to a retail culture is that we turned many points of sales from wholesale to retail. And the productivity has spiked up unbelievably. I can make the example of Nordstrom. Did we change our skin? We changed our numbers immensely, just to mention. So I think we are proceeding our journey with this determination. I think that it will go on. So I remain, as I said, positive on the outcome of this big luxury market. Okay. Yeah. Do you want to comment for Tom Ford, then I'll leave it to. Tom Ford is the main in the American market, and we see that with the new collection of Peter for the spring/summer 2024 that has been delivered basically in February, we see positive reaction from the market on the new collection. With the recent trip in the States, I returned just last week, we saw that there are a lot of activity to do in terms of renewal of some of our key flagship stores in America, also a few more stores where we are not present. But as well, we had good feedback on our wholesale in the new collection where we can see possibility of good results with the new collection. Okay. I'll leave now to Rodrigo for Thom Browne marketing. But if you want to start, Rodrigo, just with you are in Los Angeles right now, and you've done this big event with Saks. So just a couple of comments on the U.S. market. Sure. Sure. The most important point to highlight that we continue to invest in marketing and communications for the brand, that's a very important point. Something that we are always known for is our fashion show, which is the beginning of everything. When people ask me, "What do we sell something on the show?" Most of what we sell in our stores has passed by shows over the past 20 years and continues to be the case. We have made a conscious effort since last year, since the Couture Show, to make any brand moment or any brand event like the 20th anniversary, a client moment and a client event. We're seeing million-plus, million-dollar-plus, or multi-million-dollar performance with clients on the back of these events. We're extremely focused right now on presenting the show collections, not only in New York to our clients, so one-to-one appointments to VICs and significant clients, but also in Paris. We have had fantastic, fantastic feedback and actual bookings from that. We continue to do the same thing in the second half of the year, particularly in Asia. Last year, we touched Tokyo, Shanghai, and Seoul, and we'll repeat a couple of capitals in Asia in the second part of the year with Tom. We're seeing a great reaction. When it gets to America, where we're seeing a huge brand awareness growth in the last couple of years, particularly because of the women's business, right now, as you pointed out, I'm here, and Saks is hosting us with a great event in a fantastic new location in Beverly Hills. It's an incredible store, an incredible client-focused store. Yesterday, we had a great event hosted by Saks with Tom and clients and VICs and celebrities. This turns into today a very significant amount of appointments that we have with VICs in order to buy the collection exclusively developed for Saks here, which is largely Flannel and Tweed and made-to-order bags, which we're launching globally here. Our animal bags are being launched, made-to-order here, and the opportunity to write made-to-order or made-to-order women's or made-to-measure men's. That's what we're seeing a fantastic performance as well. So this is, you would say, a business, but it starts from a marketing point of view, how to communicate, if not fake marketing, it's real marketing on the collections or what the brand stands for. And this is happening on a global scale. In all three big continents of the world, we are seeing this great reaction to presenting our collections and to business that follows that. Linking this with the world of aspirational clients or the world of very committed clients, this shows a huge positive performance of our business. We are penetrating key communities, and this has been happening in the United States for the last couple of years. When we are presented with the collections in front of significant clients, their performance is outstanding, really committed, and it starts with clothing and triggers down right now to accessories and footwear. Fantastic. Thank you so much. I'll leave now the gross profit to Gianluca. Gross profit. So first, I qualify for 2023, our growth increase of margin comes above all from Zegna. So Zegna is the biggest driver of increase of gross margin for 2023. And second question was, how do we look forward to the gross margin? I think we still have opportunity to grow the gross margin, and that is our plan for this year. The drivers are several. One is exactly one technical thing, that is this disappearance of the PPA on cost of sales. This is something that we had this year for 15 million, and we call that in 2024, we still have but a very minor 3 million to 4 million tail of the PPA purchase price allocation on cost of sales. Second, apart from this fact, we still have upside on the gross margin driven by the fact that we are still, in a meaningful way, managing the price lever. As Gildo was mentioning, we are going the last mile on retail more and more. North America is the biggest area. We have on Zegna a full 12 months of Korea. The mixed channel mix will be a driver, but the price will also be a driver. We expect gross margin to be still an area of expansion in terms of margin for 2024. Thank you. I hope we answered, Anthony. We can go to the next question. If I ask the next person to keep maybe to one because we would like to leave the floor to all the questions we have for us tonight. Next one. The next question comes from Oliver Chen from TD Cowen. Oliver, your line is open. Please go ahead. Hi, Oliver. Hi, Gildo, and Gianluca. Hello. Hello, Gildo. Good morning here from New York City. Hello, Oliver. Regarding your comments on aspirational, we're definitely seeing pockets of pressure and continued over-inventory trends with aspirational across some brands. You're very service-oriented brands with distinctive characteristics on quiet luxury as well. But what's happening with aspirational? That's my question. And what do you see happening forward? And what's in your control and what's out of your control as we think about that customer coming back later? Thanks a lot. Thank you. Thank you, Oliver. I'll ask Gildo to comment on Zegna, on aspirational customer, but then I'll leave to Rodrigo maybe to add a couple of more comments. Well, since we decided to go up with our brand, the aspirational, I mean, has become less important to us. It's as simple as that. And I think Zegna was, at least for Zegna branding, it was concerned, was the driver. Now it's not any longer. And we replaced, with a lot of courage and a little pride, the top-end customer that is driving our business and will keep driving our business because the products are really unique, are not expensive for the sake of being expensive, are very high quality. I mean, thanks to our pattern, we create the best innovative product with the best material, very exclusive. I mean, all this idea of traceability from linen to wool to superfine wool to cashmere, I mean, is unique. And they're really embraced with this sustainability and high level of service. And so we are able to drive new customer and at the same time increase the level of our offer. And so, yes, we have become more selective in our customer. I think that Zegna belongs with a very few other brands to super luxury. And we do believe that this trend is not come to an end. We are right in the middle of the journey, and we have to expedite the journey, in particular in China. As I said several times, we are ahead of the pack in the United States by any, any means. We are ahead of the pack in Europe and in the Middle East. We are doing a good job in Japan. We have some work to do in some other part of Asia, China, Southeast Asia, and Korea. But we are working, and we are going together. But this is the path. This is the road that we want to get, and we are going together. Thank you, Gianluca. I think that to give some evidence of this journey, especially in China, we have signs that this evolution from leaving behind the aspirational clients in China is giving signs, and we see legitimacy from the top-end clients. We are seeing, for instance, the Second Skin Triple Stitch, which is priced higher than EUR 1,200 in Europe, EUR 1,000. It's performing very well in China. We are seeing uber-l uxury products sold very well. We just finished in Xi'an a successful trend show of uber- luxury products where clients came in and recognized the collection, the high-quality collection that Gildo mentioned. We have in China the highest number of so-called Zegna friends that are the ones above the EUR 50,000 spending per year. So, of course, it's the area, and that is where we have always discussed. We are reshuffling our client base in China. We started later, but we are confident that the formula, the ingredients, the recipe is working also there. We have signs that the product is recognized. High-end clients are seeing Zegna as a go-to brand also on the top part. So I think it was important to add it to the mix. Rodrigo, a couple of comments from your side, and then we'll leave to the following question. Sure. To put it into perspective, from a Thom Browne point of view, I think the fantastic opportunity is that we don't target a specific client. We target male and female clients, so we have a wide variety. We have young and older clients, so we love them all. And we have an aspiration, and we have a very committed client. So that's the whole range. There's no question mark that when you go into markets and the real estate is impacted by 25%-30% and there's no great news from any other financial markets, the aspirational client will be buying less. What we're seeing is that we have a very developed client value management. When I walk the streets of the capitals that I mentioned, you see the brand worn by clients in combination then with the key luxury brands. Most of them are French. And can we get that client to regularly buy with us? Absolutely, yes. Absolutely, yes. That's why marketing is very important. That's why explaining very clearly what we do as a brand and the range of products is very important. That's why we mentioned I have the confidence on the wider selection of products, having a connection, a really good understanding of clients. So can you beat the market when it gets to aspiration and knowing the client really well? Yes. And that's what the hard work that we're doing today is trying to build a couple of years ago. So we remain always very positive on the expansion of clients. I think what's happening in the markets, particularly key markets, is there's less growth in general of aspirational clients or clients that are first coming to the brand. Thank you. Very clear. Very helpful. Okay. Oliver, I think we answered your question. If anything, you can come back to me. We have the last one before closing the call. The final question comes from Louise Singlehurst from Goldman Sachs. Louise, please go ahead. Your line is open. Hi. Good afternoon, everyone. Thank you for taking my question. I will keep to one, but just to clarify a couple of things on the wholesale channel. And as we think about that rationalization, which absolutely makes sense for the long term. But for Thom Browne, is that expected to go into, obviously, the multiyear as we look beyond 2024? And similarly with Tom Ford, should we be expecting some rationalization of wholesale over time in there? And then a sneaky, but it's related question. Presumably, we should start to see an improvement on the gross margin. Really helpful getting the gross margin color today in the annuals for 2023. But presumably, we should start to see the channel mix effect benefiting that as we move through into the next couple of years too. Thank you. Thank you, Louise. I'll let Gianluca to comment a little bit, and then maybe also let you on Tom Ford's question. Yeah. Hi, Louise. So I go back to what we said in New York. So we have disclosed the growth for the midterm CAGR of 10%. And there was a question saying, "How come you do a 10% growth when you chase an increase of store productivity?" We disclosed an increase of store footprint through conversion and through brand new openings. And the answer was, "We see our wholesale business flattish going forward." So our mindset is that the growth does not come from wholesale. So this is to set it in perspective. We want to keep wholesale basically where it is now. We are going through, especially for Thom Browne, in a cleanup and especially a selection of accounts. Definitely, this will translate into a channel mix positive effect in gross margin. It carries also SG&A together because when you convert, you bring some cost attached. Possibly, some conversions are paying back. Always, our rule of thumb is to have at least in a couple of years, the store up and running. So you might have the first 12 months muted and then a spike afterwards. That was also the reason of my answer to Chris at the beginning, "If we see our EBIT growth linear or not." No, we are not seeing this because we are going through some conversions, some openings, and so on and so forth. But definitely, the logic is go direct to the consumers. Zegna is also already 85% there. We want to bring the other two brands to a 70/30, which is not the case today. This comes through selection and conversion. And I leave Lelio and Rodrigo to express the logic of the. We had exactly yesterday a meeting on wholesale, so you have fresh material in your mind. As far as Tom Ford is concerned, as we mentioned in the capital market day in December, our key driver of growth will be retail because it's the only way we can have to have our customer management better. Of course, 2024 will be a transition year. So it's not going to be a year where we're going to make a lot of things happening in wholesale. But to confirm the strategy, I can tell you that already in 2024, we have two points of sale that are in wholesale today that will be moved in concession. We have additional three new openings that we typically use the wholesale model in the past. They're going to be opened in concession directly. Of course, we were, in a way, obliged to better control or manage some of the points of sale, typically retailers, that are not having a good financial situation right now. We need to better control to avoid a negative impact. Of course, I reiterate the fact that retail will be the driver of growth. In the next year, we're going to have much more attention and expansion to the retail network and, of course, transformation and wholesale to retail. Perfect. Rodrigo, I don't know if you want to talk about wholesale. From Thom Browne's point of view, if we wholesale so if we take that we have a beautiful brand and a beautiful product, and we want to connect always with the clients. So those three elements, wholesale is an important component. Important component because they have a global connection with very important clients. And it doesn't have to be walking through the doors of the department store or the stores. It can be or should be mostly that very well-known VIC client. Like we're living today, right now, we saw yesterday when we were having the event at the store with Saks, they brought us in front of the best clients they have. They have a very developed Saks First suite market and program. I just saw the same thing in Hong Kong with Joyce and Lane Crawford. It's fantastic. And just to make a choice, the biggest impact I see this year on started last year is from an e-business point of view. We saw the change of ownerships very quickly of a couple of big players on MATCHES. Just to clarify, Gianluca has commented, we had shut down distribution with MATCHES before this happened. So that's one of the few choices. But from a wholesale point of view, where we remain positive is that we want to be connected with the best potential client in the world. It's a client expansion opportunity, Thom Browne. Clearly, that one. Wholesale can play a specific role. Are we going to see a significant change in volume? Not necessarily, as Gianluca mentioned, but do we have an opportunity to continue to expand on footwear and accessories where we start to have very good results, particularly from Japan? Japan is leading for us the opportunity on accessories as well as footwear. There's been a total commitment and exposure on shop floors. We have the first two ever spaces on the ground floor with Isetan and Hankyu. We start to perform really, really well. So what can wholesale contribute? They can connect us with incredible clients. They can put us in front of right next to the most important brands when it gets to accessories and footwear. So we can continue to work intelligently on wholesale and cherry-pick where to grow, which categories to grow, and how to expand with it, and how to do certain business directly and complement it with other business that brings us clients that we wouldn't have in the short term. There's no marketing makeup for the room that we saw yesterday that we had with Saks here. So that's our view on wholesale, the volumes. As Gianluca mentioned, we're going to be somewhere on the levels that we expect in 2024, somewhere there as a choice and a breakdown in terms of women's and men's. Women's is a new business. It didn't exist almost nine years ago. It's a very important part of our business. And when it gets to growth and opportunity, clearly, key wholesale accounts can bring us a very interesting client. As well as MTM and MTO. We have had fantastic success where we target that very elevated, that very committed client from wholesale accounts from made-to-measure, made-to-order. We're talking about $9,000, certain fabrics within the collection, full suits. We're talking about even custom orders that come from very significant clients of some of the best department stores in the world that buy over $100,000 of looks of Thom Browne when it relates to custom orders of shows. Thank you. Thank you, Rodrigo. And with this question and answer, I would like to close the call. First of all, I thank everybody who has joined. As we said, on the 23rd, we will have our Q1 revenue results call. So we will see each other in a couple of weeks, see or call each other in a couple of weeks. In the meantime, if you have any question on what has been discussed during the call on fiscal year 2023 results, I'm always available. Thank you. Thank you so much to everybody. Thank you. Goodbye. This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.