On Holding Surges Past Q4 Sales Expectations with CHF 743.8M

URGENT UPDATE: On Holding has exceeded expectations in its fourth-quarter financial results, reporting a remarkable 22.6 percent increase in net sales, totaling CHF 743.8 million. This impressive performance comes just as analysts predicted a more modest growth of 19.9 percent.

In a significant milestone, the Zurich-based running brand announced that its total sales for the year surpassed CHF 3 billion for the first time, reflecting a 30 percent year-on-year increase. This surge in sales illustrates the company’s strategic focus on its LightSpray franchise and an expanding apparel line.

On Holding’s success is not just about numbers; it signifies a broader shift in consumer preferences towards health and performance. CEO Martin Hoffmann stated, “This is not a moment to engage in sales events, but to execute our strategy.” The company aims to leverage its innovative offerings to solidify its status as a premium global sportswear brand.

Sales through direct-to-consumer channels also saw a notable rise, climbing 21.7 percent to CHF 360.6 million, while the wholesale channel grew by 23.4 percent to CHF 383.2 million. In regional breakdowns, sales in the Europe, Middle East, and Africa (EMEA) surged by 24.2 percent to CHF 183 million, while Asia-Pacific sales skyrocketed by 70.8 percent to CHF 126.5 million.

Looking ahead, On Holding plans to expand its retail footprint, with projections to add between 15 and 20 new stores this year. These newer locations are designed to be about 40 percent larger, allowing for a better showcase of apparel, which currently accounts for 15 percent of sales in existing stores.

Hoffmann emphasized that 10 percent of new customers now come through apparel offerings, highlighting its importance as a growth driver. “The opportunity is massive,” he added, underlining the brand’s potential to capitalize on this trend.

In terms of future expectations, On Holding forecasts a growth rate of at least 23 percent in net sales for the coming year, aiming to reach at least CHF 3.44 billion. The company also anticipates a gross profit margin of at least 63 percent and an adjusted EBITDA between 18.5 and 19 percent.

Analysts are optimistic about On Holding’s trajectory. Truist Securities has maintained a buy rating, noting “meaningful room for expansion” across various markets. Other analysts, including Tom Nikic from Needham & Co., highlight the brand’s increasing global awareness and growth potential in Asia and EMEA.

Despite some potential headwinds, such as tariffs and the strong Swiss franc, On Holding’s continued innovation and expansion initiatives position it for ongoing success. The upcoming launch of the LightSpray Cloudmonster 3 Hyper, featuring a 3D-printed upper, is set for release on Thursday, further highlighting the brand’s commitment to innovation.

This super-strong fourth quarter not only surpasses expectations but also sets the stage for On Holding’s most exciting year yet. As the company dives deeper into its product pipeline, it remains focused on meeting the demands of a health-conscious consumer base, poised for a future of growth in the sportswear industry.