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On Holding (ONON) is trading sharply higher today following a stellar Q2 earnings report that showcased a 32% yr/yr increase in net sales to CHF 749.2 mln, comfortably surpassing analysts’ expectations. The Swiss performance sportswear brand also raised its FY25 net sales growth guidance to at least 31% in constant currency, up from its prior forecast of at least 28%, reflecting confidence in sustained demand. Additionally, ONON lifted its gross margin guidance to 60.5–61.0% from 60.0–60.5%, signaling improved profitability driven by premium positioning and operational efficiencies.

The strong results and upbeat outlook underscore ONON’s ability to capitalize on market opportunities, even as competitors like NIKE (NKE) navigate ongoing challenges, propelling the stock’s post-earnings rally.

• ONON’s robust Q2 performance and raised guidance highlight its accelerating market share gains in the highly competitive athletic footwear and apparel market, where it continues to outpace industry giants like NKE, which is grappling with a multi-year turnaround amid sluggish demand and inventory issues. Key drivers of ONON’s success include its three-year strategic plan (2024–2026), which emphasizes global expansion, product innovation, and direct-to-consumer (DTC) growth, with a goal to double net sales by 2026.
• The company’s diversified portfolio of footwear franchises, spanning running, training, tennis, and trail categories, combines premium lifestyle appeal with high-performance functionality, resonating with younger, affluent consumers. Strategic partnerships with high-profile athletes like Iga Swiatek and Zendaya, alongside innovative products like the Cloudmonster and LightSpray technology, have bolstered brand visibility and demand.
• The DTC segment was a standout in Q2, with revenue surging 47% yr/yr to CHF 307.4 mln, now representing 41% of total revenue, up from 36% in 2Q24. This growth was fueled by strong e-commerce performance, driven by enhanced digital marketing, personalized customer experiences, and the expansion of ONON’s owned retail stores, which grew to 45 globally by quarter-end. The introduction of interactive online platforms and loyalty programs further boosted DTC engagement, particularly among Gen Z and millennial consumers seeking premium, performance-driven products.
• Wholesale channel also performed strongly, with revenue up 23% to CHF 441.8 mln, supported by deepened partnerships with key retailers like Foot Locker (DKS) and JD Sports, as well as expanded distribution in high-growth markets like Asia-Pacific and Europe.
• Despite missing EPS expectations with a reported CHF 0.09 per share, the shortfall was entirely attributable to adverse currency fluctuations, particularly the strengthening of the Swiss franc against the U.S. dollar and euro. Excluding these impacts, ONON’s profitability metrics paint a strong picture: adjusted EBITDA soared 50% yr/yr to CHF 136.1 mln, exceeding estimates and reflecting significant operating leverage. Gross margin also expanded to 61.5% from 59.9% in 2Q24, driven by a favorable mix of high-margin DTC sales, reduced promotional activity, and lower freight costs due to optimized supply chain operations.

ONON’s strong momentum across its shoes, apparel, and accessories categories underscores its position as a leading innovator in the performance sportswear market. Recent launches, including the Cloudtilt for lifestyle, Speedboard for tennis, and Cloudventure for trail running, are expected to drive continued growth by appealing to diverse consumer segments. With a fortified DTC channel, expanding global footprint, and a clear strategic roadmap, ONON is well-positioned for sustained outperformance in the quarters ahead.