This story was updated at 10:42 a.m. on Aug. 11
On Holding AG saw second-quarter strength in its direct-to-consumer channel, but the company still missed overall sales estimates on sluggish wholesale growth.
That miss saw shares of On fall more than 18 percent to 31.48 in Tuesday morning trading.
Separately, On said consumers under 34 now represent more than one-third of its customer base, with the Cloudtilt franchise resonating particularly strongly with this important demographic.
“We are proving that a brand can achieve global scale without compromising its premium positioning. Our [second-quarter] results reflect this discipline — demonstrating strong net sales growth globally, significant expansion of our own channels and an exceptional gross profit margin,” said founder and co-chief executive officer David Allemann. “This financial strength allows us to reinvest in what drives our long-term success: authentic brand connections, premium customer experiences and, above all, continuous performance innovation.”
Allemann added that the brand’s founder-led perspective keeps On focused on taking the right decisions as “we build the most premium global sportswear brand for decades to come with an enviable, compounding financial profile.”
The On Holding team appears unfazed by recent CEO and CFO shifts.
“Delivering 21.6 percent constant currency growth alongside an industry-leading 65.4 percent gross margin shows the structural benefits of leading with innovation and brand heat,” said Frank Sluis, chief financial officer, in his first company earnings report. “It also underscores the discipline that differentiates our financial profile. We do not compromise our full-price integrity for volume — even in the heavily promotional environment we saw this quarter in some markets.”
For the second quarter ended June 30, net income grew to 105 million Swiss francs, against a net loss of 40.9 million Swiss francs a year ago. On an adjusted basis, net income was 117.6 million Swiss francs, versus the year-ago loss at 29.7 million Swiss francs. Net sales rose 13.5 percent to 850.3 million Swiss francs, or up 21.6 percent on a constant currency basis.
The company said the DTC channel led the uptick in sales growth, up 26 percent to 388.4 million Swiss francs. The wholesale sales channel rose 4.8 percent to 461.9 million Swiss francs. Some analysts were expecting an uptick by a double-digit percentage.
Net sales from shoes, the largest category, were up 10.9 percent to 781.6 million Swiss francs. Apparel sales rose 47.7 percent to 54.2 million Swiss francs, while accessories were up 88.3 percent to 14.5 million Swiss francs. By region, net sales in EMEA — Europe, Middle East and Africa — rose 15.4 percent to 228.2 million Swiss francs, while sales in the Americas were up 4.5 percent to 451.6 million Swiss francs. Sales in Asia-Pacific gained the most at up 43.1 percent to 170.5 million Swiss francs. Asia-Pacific was powered by standout momentum across Japan, South Korea and Greater China.
Recent weeks saw On open its first stores in São Paulo, Copenhagen and Macao as the company extends its global network of “highly profitable premium brand hubs,” the company said. Thus far, it has a fleet of doors that sit at more than 70 units globally. Co-CEO Caspar Coppetti in an interview with FN said On, with running in its roots, is committed to run specialty stores and a new class of consumers that’s more intentional on where they spend their money.
For the six months, net income was 208.3 million Swiss francs on a net sales gain of 14 percent to 1.68 billion Swiss francs.
The company said that while the DTC momentum remains highly encouraging, On is “deliberately managing wholesale sell-in to protect full-price integrity in a promotional marketplace.” This strategy is aimed at “ensuring a clean runway for On’s upcoming breakthrough innovations leading into 2027,” the company noted.
For full year 2026, excluding any benefits from anticipated tariff refunds, On said net sales are expected to grow in the “low-20 percent range on a constant currency basis, with the DTC channel expected to strongly outperform wholesale in the second half of the year.” That “low-20 percent range” is down from prior guidance of at least 23 percent. It added that net sales are expected to be in the range of 3.47 billion to 3.56 billion Swiss francs. Gross profit was forecasted to be at least 65 percent, with adjusted an earnings before interest, taxes, depreciation and amortization margin in the range of 19.5 to 20 percent.
The company ended the second quarter with cash and cash equivalents at 1.21 billion Swiss francs.
On also said it disclosed its next generation of performance running products at its inaugural Running Summit. The styles will hit the market in the second half of 2026 and in 2027. “This includes the recently launched Cloudboom Strike 2 and the new Surreal superfoam, which will debut in the Cloudsurfer 3 later this year,” On said.
On also noted that LightSpray continues to scale into a commercial engine and will be introduced to further core franchises.
A look at On’s Cloudmonster 3 shoe.
Courtesy of On