On Holding AG Reports Record Sales and Optimistic Outlook

On Holding Ag Class A ((ONON)) has held its Q1 earnings call. Read on for the main highlights of the call.

The recent earnings call for On Holding AG Class A painted a very positive picture, with the company showcasing significant growth in net sales and profitability. The optimism was largely fueled by strong performance in the direct-to-consumer (D2C) segment and apparel sales. Despite some challenges related to tariffs and foreign exchange volatility, the overall sentiment was buoyant, driven by robust brand momentum and successful product launches.

Record-Breaking Net Sales

On Holding AG reported net sales exceeding CHF 725 million, marking a remarkable 40% year-over-year growth on a constant currency basis. This record-breaking performance underscores the company’s strong market presence and effective sales strategies.

Increased Gross Profit Margin

The gross profit margin saw an increase to 59.9%, up from 59.7% in the first quarter of 2024. This improvement was attributed to the strength of the direct-to-consumer business, highlighting the company’s ability to enhance profitability through strategic channel management.

Strong Performance in Asia Pacific

The Asia Pacific region emerged as a significant growth driver, with net sales surging by 130.1% on a reported basis to CHF 120.6 million. China led this impressive growth, showcasing the brand’s expanding footprint in key international markets.

Apparel Net Sales Surge

Apparel net sales reached CHF 38.1 million, the highest quarterly figure in the company’s history, reflecting a 93.1% year-over-year increase. This surge highlights the growing consumer demand for On Holding’s apparel offerings.

Successful Product Launches

The launches of Cloudsurfer 2 and Cloud 6 were met with great success, with Cloud 6 setting a record as the largest product launch ever. These successful launches underscore the company’s innovative product development and strong market reception.

D2C Channel Growth

The direct-to-consumer channel experienced a 45.3% year-over-year growth on a reported basis, reaching CHF 276.9 million. This growth signifies the channel’s increasing importance in the company’s overall sales strategy.

Strong Cash Position

Despite a slight decrease, On Holding maintained a robust cash position of CHF 871.8 million at the end of Q1, reflecting its strong financial health and ability to support future growth initiatives.

Challenges with Tariffs and FX

The company acknowledged potential challenges due to incremental tariffs in the United States and volatile foreign exchange rates, which introduce some uncertainty into future planning.

Forward-Looking Guidance

On Holding AG provided optimistic guidance for the fiscal year, projecting net sales to reach at least CHF 2.8 billion, with a constant currency growth outlook of at least 28% for 2025. The company emphasized its focus on premium positioning, innovation, and operational efficiency, while also acknowledging potential uncertainties from tariffs and currency fluctuations.

In summary, On Holding AG’s earnings call conveyed a strong sense of optimism, backed by record-breaking sales figures and strategic growth in key areas. The company’s focus on innovation and direct-to-consumer channels, coupled with its robust financial position, positions it well for continued success, despite external challenges such as tariffs and currency volatility.