Shares of On slipped nearly 17 percent in premarket trading on Tuesday after the Swiss sportswear maker reported that despite a strong second quarter it missed analyst sales estimates.
The company posted quarterly sales of $1.05 billion that were up 13.5 percent over the same point last year but below the projected $1.09 billion that was expected by the end of the period that ended on June 30.
On also revised its outlook for the year, toning down the previous view of “at least 23 percent” growth target to a more most figure around 20 percent at around 4.29 billion in revenue.
“We are proving that a brand can achieve global scale without compromising its premium brand positioning. On founder and co-CEO David Allemann said. “Our Q2 results reflect this discipline – demonstrating strong net sales growth globally, significant expansion of our own channels, and an exceptional gross profit margin. 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.”
Direct-to-consumer revenue soared 26 percent in the quarter to $479 million and represented nearly 46 percent of On’s total sales while the brand reported that the Asia-Pacific region drove more an 20 percent of its total sales on the strength of its Japan, South Korea and Greater China markets. The wholesale segment increased 4.8 percent to $569 million as Wall Street forecast around 10 percent in the period.
“In my first quarter with On, it has been a privilege to see the incredible ambition and innovation culture of the team firsthand, which is clearly reflected in the strong set of results this quarter,” On CFO Frank Sluis said “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. It also underscores the discipline that differentiates our financial profile.”
On has spent a better portion of the year riding a wave of new footwear offerings like the Cloudboom Strike 2 and LightSpray Cloudboom Strike 2 distance performance shoes and revamped Cloudmonster 3 even as it reestablished its leadership ranks.
In March, Martin Hoffmann announced what seemed like an abrupt departure as CEO with co-founders David Allemann and Caspar Coppetti stepping in as co-CEOs in May.
The company also revealed that it would continue its investment in its LightSpray shoe production technique by opening a new South Korean factory in February with 32 robots. The machines now account for a 30-fold boost in sprayed uppers that later get joined to midsoles and are a major improvement over the four robots the brand initially used beginning in 2025 in its Zurich factory.
