Latest news with #OnHoldingAG
Yahoo
2 days ago
- Business
- Yahoo
On Holding AG (ONON): A Bull Case Theory
We came across a bullish thesis on On Holding AG (ONON) on Quality Stocks' Substack. In this article, we will summarize the bulls' thesis on ONON. On Holding AG (ONON)'s share was trading at $58.53 as of 3rd June. ONON's trailing and forward P/E were 76.41 and 55.25 respectively according to Yahoo Finance. A professional football team running onto the field, in an iconic stadium of the company. On Holding has consolidated its leadership under a single-CEO structure, with Co-CEO and CFO Martin Hoffmann assuming the role of sole Chief Executive Officer as of April 1st. This transition comes amid a period of exceptional growth for the company, which continues to outperform its broader footwear market. Posting a 43% year-over-year revenue increase to $727 million—far exceeding analyst expectations of $680 million—On demonstrated strong execution across both Direct-to-Consumer and wholesale channels, which grew 45% and 41%, respectively. This favorable channel mix, with a tilt toward higher-margin DTC sales, contributed to gross margins expanding to 60%, reinforcing On's premium brand positioning. The company subsequently raised full-year guidance, now targeting 28% revenue growth, reflecting continued confidence in its trajectory. Amidst a shifting industry landscape where legacy giants like Nike are losing share, On stands out as a disruptive force with compelling brand momentum. However, this rapid expansion has led to a premium valuation, with shares trading at over 60 times earnings, leaving little room for error and limited downside protection. Despite having nearly doubled since its April low, the stock's elevated multiple suggests that patient investors might consider awaiting a pullback. Going forward, the critical variable to watch is market share: sustained share gains are central to On's thesis, and any signs of stagnation or reversal could materially alter the investment case. For now, On remains a high-growth, high-conviction story, albeit one priced for perfection, and dependent on continued flawless execution to justify its valuation. We previously covered a on ONON written by Sanjiv on Substck. The thesis highlighted its strong DTC-led growth, premium positioning, and rapid global expansion—validated by a 16.1% stock price increase since then and a 28.5% YoY revenue surge and its first year of positive free cash flow. The latest update by Quality Stocks reinforces this momentum, with 43% revenue growth and margin expansion, but cautions that ONON's high valuation (60x earnings) leaves little room for missteps. While the growth story remains intact, new investors may want to await a better entry point. On Holding AG (ONON) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 53 hedge fund portfolios held ONON at the end of the first quarter which was 49 in the previous quarter. While we acknowledge the risk and potential of ONON as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-05-2025
- Business
- Yahoo
Why On Holding AG (ONON) Surged Last Week
We recently published a list of . In this article, we are going to take a look at where On Holding AG (NYSE:ONON) stands against other stocks that surged yesterday. Wall Street's main indices were a mixed bag anew on Thursday, with the tech-heavy Nasdaq the sole loser, as investors continued to digest results of more corporate earnings and key economic data. The Nasdaq was down by 0.18 percent. In contrast, the Dow Jones grew by 0.65 percent while the S&P 500 rose by 0.41 percent. Beyond the major indices, 10 companies finished stronger on the back of impressive corporate earnings and planned mergers and acquisitions. In this article, we explore the specific reasons behind their surge. To come up with the list, we considered only the stocks with a $2 billion market capitalization and $5 million in trading volume. A team of athletes showcasing the company's athletic footwear in an outdoor stadium. On Holding saw its share prices grow by 4.62 percent on Thursday to finish at $60.25 apiece following a bullish outlook for the rest of the year. In a statement earlier, On Holding AG (NYSE:ONON) said it expects full-year net sales to grow by 28 percent from the same period a year earlier. '[On Holding] continues to experience strong demand across channels, regions, and product categories. The company looks to further build on this global brand momentum with an exciting product pipeline for the rest of the year,' the company said. In the first quarter of the year, On Holding AG (NYSE:ONON) achieved a 43-percent increase in net sales, at CHF726.6 million versus the CHF508.2 million in the same period last year. The figure, however, failed to push its net income higher, having ended 38 percent lower at $56.7 million versus $91.4 million year-on-year. Following the results, investment firm Goldman Sachs maintained its 'hold' recommendation on its stock, while giving the company a $64 price target. On the same day, investment firm Needham raised its price target for On Holding AG (NYSE:ONON), to $62 from $55 previously, while also recommending to buy the stock. Overall, ONON ranks 9th on our list of stocks that surged last week. While we acknowledge the potential of ONON as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ONON but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: and . Disclosure: None. This article is originally published at . Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-05-2025
- Business
- Yahoo
Q1 2025 On Holding AG Earnings Call
Jerrit Peter; Head - Investor Relations; On Holding AG Caspar Coppetti; Co-Chairman, Co-Founder, Executive Director; On Holding AG Martin Hoffmann; Co-Chief Executive Officer, Chief Financial Officer; On Holding AG Jonathan Komp; Analyst; Baird Chad Britnell; Analyst; Morgan Stanley Aneesha Sherman; Analyst; Bernstein Jay Sole; Analyst; UBS Aubrey Tianello; Analyst; Exane BNP Paribas Anna Andreeva; Analyst; Piper Sandler Tom Nikic; Analyst; Needham & Company Cristina Fernández; Analyst; Telsey Advisor Group John Kernan; Analyst; TD Cowen Operator Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the On Holding AG Q1 2025 results conference call. (Operator Instructions) I would now like to turn the call over to Jerrit Peter, Head of Investor Relations. Please go ahead. Jerrit Peter Good afternoon, good morning to our investor community. Thank you for joining On 2025 first-quarter earnings conference call and webcast. With me today on the call are On Executive Co-Chairman and Co-Founder Caspar Coppetti; and CFO and Co-CEO, Martin Hoffman. Before we begin, I will briefly remind everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our 20-F filed with the SEC on March 4, for a detailed discussion of such risks and uncertainties. We will further reference certain non-IFRS financial measures such as adjusted EBITDA and adjusted EBITDA margin. These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Please refer to today's release for a reconciliation to the most comparable IFRS measures. We will begin with Caspar followed by Martin leaving through today's prepared remarks, after which, we are looking forward to opening the call for a Q&A session. Before I hand it over, allow me to close the introduction on a personal note. I'm very excited to announce that I will be taking on a new role within On following this quarterly cycle, and therefore, today will mark my last earnings call at capacity. It has been an incredible privilege and honor to represent On to our research and investor coming over the past years. and I hope many of our paths cross again in the future. Thank you so much for all your trust and support. With that, I'm now happy to turn it over the call to Caspar. Caspar Coppetti Thank you, and welcome, everyone, to our first-quarter 2025 earnings call. We're excited to have kicked off the continued exceptional brand momentum, clearly reflected in the numbers we're presenting today. Net sales exceeded CHF725 million, reflecting a year of growth of 40% on a constant currency basis. The strength of our direct-to-consumer business and its increased share resulted in an increased gross profit margin of 59.9%. We are proud to see our focus on premium execution and operational efficiency result in an even higher margin expansion on the adjusted EBITDA line, reaching 16.5% in the quarter. The results speak for themselves. Demand for On remains incredibly strong. Our brand promise to ignite the human spirit through movement along with On's positioning as the most premium global sports for brand in the marketplace are resonating with our fans, allowing us to capture market share and drive On's success. We are committed to this premium brand and product products and see it as a differentiator in our space. And we are confident that it provides us with the tools to navigate the uncertainty that comes with operating a global business and supply chain in the current environment and beyond. Martin will elaborate further on this later on this call. You can rest assured that all decisions we are taking are first and foremost, a reflection of our long-term strategy and brand position, setting ourselves up for continued success in the future as the most premium global sportswear brand. Beyond our financial results in the first quarter, we have seen this vision come to life over recent months. We're rapidly expanding brand awareness and reaching new audiences through innovative products, strategic partnerships, and culture moments that resonate deeply. Early in the quarter, the concept of soft wins took center stage with Elmo and Roger Federer generating significant buzz around the On brand and ripple effect across social and traditional media like. This momentum continued into a larger soft wins running campaign with the new Cloudsurfer 2 at the forefront. The second generation of one of our most beloved models has already gained strong global traction. Cementing its position as a key running franchise in our portfolio. Among the new launches in the quarter, a true highlight for me personally was certainly the launch of the Cloud 6. As On's largest product launch ever, we're thrilled to see the Cloud once again tighten us closer with existing customers while also reaching new audiences or discovering it for the first time. After a few years of focus on diversifying our product portfolio, the whole On team has been patiently waiting for this opportunity to ignite our icon with renewed energy and once again share a story of the Cloud with the world. The Cloud also serves as a strong example of how we continuously refine and elevate new launches to deliver more premium product. Introduced at a price point above its predecessor, the Cloud 6 reflects how our premium positioning enables pricing power without compromising consumer demand. Beyond consistent and continuous product innovation, authentic partnerships are key to growing On's cultural relevance. In April, we introduced our latest move and [livestock] campaign with Zendaya. The fictional film trailer, setting space reflects On's continued commitment to push in the boundaries of visual storytelling and culture connection. The campaign highlights key products from our spring summer collection, including On's bleak new low-profile model, the Cloudzone. And for consumers seeking a refined lifestyle look. Even more importantly, the campaign reinforces our focus to build On from the feet up by introducing our fans to On's apparel and accessories at every touch point. Ahead of any impact from On's most recent campaign, we have continued to observe the meaningful alteration within our apparel business, with net sales also doubling during the first three months of the year. While our product franchises continue to fuel strong commercial momentum, we believe transformational innovations like LightSpray will truly allow On to provide a differentiated offering and define the future of sportswear. 2025 will be a key year for testing and optimizing this technology as we lay the foundation for global scalability in the future. At the same time, pop-ups in key global locations such as Boston during the marathon league, are already bringing this innovation closer to runners and fans of the On brand. We hope some of you had the chance to try the Cloudboom Strike LightSpray and our Boston pop-up. Looking ahead to later in the year, we're continuing our global tour to further connect innovation with our core communities, engaging directly with runners in cities like Berlin, Zurich, and Tokyo during the World Athletics championships. LightSpray represents a radical shift in materials, automation, supply chain, and production as well as steps towards circularity. And we're incredibly honored to have been recognized by Fast Company as the number one most innovative company in the design category with this groundbreaking technology. We are now laser focused on unlocking its full potential. That's why we're actively building a future-facing team, hiring computational engineers, robotic specialists, and plant engineers to support this next phase. I've had the privilege to personally visit some of the production sites that we are currently exploring, and it became apparent that what we are setting up is quite literally the future, clean, efficient, and fully automated manufacturing combined with high side flexibility, a step change for the industry and for on a major league toward a more resilient and locally diverse supply chain. While LightSpray is undoubtedly a key part of the future, our relentless focus on innovation and excellence across our operations and supply chain remains central to our vision. The numbers that we are sharing today reflect 12 to 18 months of focused execution, driven by improved capabilities in planning, production, supply chain, and order management. We have also added strength in key leadership roles and deepened in-house capabilities to support long-term scalability. Together, these efforts are enabling us to do a much better job at having the right product at the right place at the right time. Finally, I want to take a moment to reflect on the recent leadership evolution we announced a few weeks ago. On behalf of the Board, I want to sincerely thank Mark for his incredible leadership over the past 12 years. Mark, your dedication, vision and passion have left an unforgettable mark on On, and we're all better for having walked, or precisely, for having run fast with you. Mark will continue as Co-CEO through the end of June and then transition into an advisory role to the Board. Looking ahead, we're fortunate to have Martin stepping into the role of sole Chief Executive Officer from July 1. The Board has full confidence in Martin's ability to serve as CEO and lead On together with us founders, as the incredible On team. Together, we will continue to deliver On's strategy of sustained growth and profitability while continuing to foster the strong culture that makes every On office such a unique and inspiring place to step in every day. On a separate note, we're looking forward to next week's Annual Shareholder Meeting, where Helena Helmersson is standing for election to our Board. Helena brings extensive experience from our leadership at H&M and her expertise in operations in retail will be incredibly valuable as we scale. We appreciate your support for her and the other proposals put forward by the Board. With that, over to you, Martin. Martin Hoffmann Thank you, Caspar, and hello, everyone. It goes without saying that having had the opportunity to share the CEO role closest friends over the past years has been the experience of a lifetime. Mark, finishing this the most unforgettable journey. And thank you for the countless exciting, challenging, fun, and inspiring moments throughout the years. For us and for On, it marks the end of an amazing chapter. And it marks the beginning of a new one, one that I'm incredibly excited and grateful for. I'm extremely honored to take on the next chapter of this journey together with my partners and the rest of the On team. A few weeks ago, our full team came together to celebrate On's 15-year anniversary at our Global Summit. It was one of the most powerful moments I have ever experienced at all. The Global Summit isn't just our key annual commercial event. It's where our future takes flight. It's where we ignite the collective ambition of our global teams and partners for 2026, aligning us on a shared strategic vision and bringing the soul of our brand and the innovation of our products to life. Here, we don't just preview future assortments. We provide our markets with the inspiration and tools to execute with unparalleled excellence, building the commercial energy that propels us forward. Beyond the business, the summit is a powerful testament to our team. Celebrating On's 15th anniversary reminded us that these moments of connection are at the heart of our success. It's in these vibrant gatherings that our unique culture shines brightest, fueling our inspiration and celebrating the various sense of On. This shared energy and profound connection to our mission to ignite the human spirit from movement is the unwavering force that guides us as we continue to evolve and reach new heights. Thank you team for making this a once-in-a-lifetime moment. As Caspar highlighted, 2025 is off to an incredible exciting start. We've launched the year with a powerful wave of new products and brand campaigns across running lifestyle antennas, not to mention our full apparel line, which is continuing its impressive climb in market share across all regions and channels. We've introduced successful updates that bring fresh energy to some of our most important franchises, including the Cloudsurfer 2 and the Cloud 6 and, of course, entirely new Cloudzone. In the coming months, we are excited to deliver even more newness to the running community, highlighted by clinical innovation in our Cloudboom franchise and renewed energy and focus with launches in the high-performance trail running segment. While staying true to our vision to be the most premium global sportswear brand, we understand that our growing scale demands medical attention to detail and a strong commitment to elevating the premium experience across every touch point, from product and merchandising to retail customer service and operations, every area plays a vital route and how we bring that vision to life globally. Over the last months, we have focused our energy on elevate our processes and capabilities across all touch points. We are very happy with the progress we have made. These efforts have laid the foundation for what we share here today and empower us to dream even bigger as we look beyond 2025. We have reached net sales of CHF726.6 million in the first quarter, growing 43% year over year on a reported basis and 40% on a constant currency basis. This marks the highest quarterly net sales in the history of the company and is the result of the continued strong demand that we are seeing across all our channels. Our D2C channel has again fueled our growth, increasing by 45.3% year over year on a reported basis and 42.4% on a constant currency basis, reaching net sales of CHF26.9 million. This growth ahead of our expectations has further resulted in an increased D2C share of 38.1% in Q1 '25, up from 37.5% in Q1 '24. Both e-com and retail are contributing strongly to this result, and we are clearly seeing the synergies across the tool. In e-com, we remain very pleased with the global momentum and continued full-price execution across our own website and online marketplaces. From a smaller base, retail continues to showcase exceptional momentum from both new store openings and meaningful increases in existing store productivity. The store rollout and strong growth of this channel is visible across all regions. But if I had to pick one highlight this quarter, it would be the continued strength of our Tokyo store, which even surpassed our Regent Street store in London in terms of net sales. Across both e-comm and retail, we continue to invest in our tech capabilities to elevate the experience for our customers and to drive additional operational efficiencies. Wholesale grew by 41.5% year over year, reaching CHF449.7 million in the first quarter. On a constant currency basis, the growth was 38.6%. The demand for our brand is fully reflected in strong sellout numbers of our wholesale partners globally. This allows us to drive high same-store growth rates while maintaining a very controlled speed in expanding our store network. Retailer demand for the new Cloud 6 franchise has been exceptionally strong worldwide. We're excited to see it once again contributing strongly to our growth. Now let me dive into the development by region. Starting with Europe, Middle East, and Africa, which grew by 33.6% on a reported basis in the quarter and reached CHF168.6 million. On a constant currency basis, growth was 33%, with strong growth rates across all channels. We're excited to see increasing contributions and [branding] from less established markets like Spain, Belgium, the Netherlands, as well as our Scandinavian markets. In France, we maintained the brand post Olympics, establishing France amongst the top markets in Europe in terms of net sales. Moving on to the Americas. Net sales in the region grew by 32.7% year over year to CHF437.4 million with a constant currency growth at 28.6%. We continue to see strong performance across our key strategic retail partners in the US with regions like the Southeast and West Coast outpacing the broader market. Reflecting this momentum, our own retailers in Miami and Abbot Kinney are delivering standard results. We are also excited to open our second California store in Q1 located in Newport Beach, which recorded the highest apparel share all US stores during the quarter. In the Asia Pacific region, the incredible momentum continued into Q1. Net sales grew by 130.1% on a reported basis to CHF120.6 million in Q1. On a constant currency basis, growth was 128.9% year over year. In March, I had the pleasure to visit our team in Shanghai, and I already look forward to experiencing the incredible energy around the World Championships in Tokyo later this year. As we have previously spoken about, growth continues to be very broad across the region. China, Japan, Australia, Korea, and our distributor markets in Southeast Asia more than doubled in net sales. Momentum in China continues to accelerate, achieving the strongest growth across the region. Impactful campaigns like soft wins have elevated brand awareness by more targeted Tmall initiatives such as Heybox and new fashion week as potable increase in market share on the platform. Just two weeks ago, we opened our first luxury store in China, in Chengdu's super premium Taikoo Li. Turning to our performance by product category. Net sales from shoes grew by 40.5% to CHF680.9 million in the first quarter. Our strategic focus on building key franchises is paying off. With the Cloudsurfer 2 launch, the continued strength of the Cloudmonster, the Cloudrunner, and our new race products, our running franchises achieved some of the growth rates. The brand building campaign around the Cloudsurfer 2 created a clear halo across the entire Cloudsurfer franchise. In particular, the Cloudsurfer Next, has seen a notable lift in momentum following the launch. In July, we look forward to expanding the franchise, building on the energy with the introduction of the Cloudsurfer Max. Outside of running, the new Cloud 6, the Cloudtilt, Cloudnova, THE ROGER, and the new Cloudzone drove significant growth. Moving on to apparel. Net sales reached CHF38.1 million for the quarter, the highest quarterly net sales in history increasing by 93.1% year on year. While this growth rate is partly attributable to the prior year base, we are highly energized by the success and feedback of our product lineup. At our Global Summit, the team staged a full-scale fashion show unveiling our complete head-to-toe offering for spring, summer '26. The energy and anticipation in the room were undeniable, and the Q1 numbers tell the same story. Apparel momentum is off to a strong start in 2025, powered by standout launches in running and movement and tennis. Our training campaign with FKA twigs launched earlier this year drove significant gains in the apparel share across key e-commerce region. Meanwhile, other formats such as shop-in shops with strategic retail partners, delivered outstanding results. At our [self-feature] pop-up in London, which opened earlier in the quarter nearly every second item purchased for either apparel or an accessory. Moving down the P&L. Our gross profit margin increased to 59.9%, up from 59.7% in Q1 '24, which reflects the increased D2C share versus the prior year period as well as the power of the premium position of the brand. SG&A expenses, excluding share-based compensation, accounted for 47.3% of net sales in Q1 down from 48.8% in the same period last year. We continue investing in all parts of the business while driving operational efficiencies, most reflected in the distribution expense line. While we currently continue to fulfill higher order volumes through our L.A. warehouse, we remain highly focused on progressing with our new automated Atlanta facility. The resulting adjusted EBITDA margin for Q1 is 16.5%, up from 15.2% in the first quarter of 2024. We are pleased to report that our net income reached CHF56.7 million, even after considering the sizable unrealized FX loss due to lower US dollar at the end of the quarter. Moving on to our balance sheet. Capital expenditure were CHF12.1 million in Q1 '25, representing 1.7% of net sales, broadly in line with the 1.8% recorded in Q1 '24. Inventory also remained relatively stable compared to year-end levels standing at CHF399.3 million at the end of the quarter. Our cash position was CHF871 million at the end of Q1, down from CHF924.3 million at the end of '24. The decrease was primarily driven by the higher net working capital, a consequence of the strong growth and larger wholesale quarter, which resulted in a temporary increase in accounts receivable. With that, I would like to look ahead. We are approaching the remainder of the year with an exciting and highly performance-driven product pipeline with strong brand momentum, with high levels of energy across our team, with the right inventory, and a strong cash position. Entering Q2, we continue to observe strong consumer demand for our products with all global markets and channels. Our pipeline of new product launches in the second half of the year includes running products like the Cloudsurfer Max; the Cloudflow 5; and Cloudboom Max, our first super shoe for the everyday runner; as well as newness in our tennis and training verticals. Strong pre-orders for the half of the year from our wholesale partners already reflect the strength of our products. Our strong foundation for sustained growth is further supported by the elevated brand awareness, as a result of the successful brand campaigns that we have executed in the later half of 2024 and the first quarter of 2025. While we ended the remainder of the year with a lot of tailwind, the ongoing discussions and pending decisions surrounding potential incremental tariffs in the United States introduce a considerable degree of uncertainty into our planning and may create a dynamic market environment. This includes more volatile foreign exchange rates with nearly all our key operating currencies significantly depreciating in value relative to the Swiss franc in recent weeks. Within this, it's paramount that we are focused on what we can control and continue to build our company towards our vision to be the most premium global sportswear brand. This means delivering on our brand promises to our fans while ensuring we continuously invest into what differentiates us in the long term: highest quality standards, cutting-edge innovation, premium customer experiences and service, sustainability and social impact. In line with this ambition, we continuously assess our global pricing strategy, within the movement of the industry and take actions where appropriate to maintain our premium position. At the same time, we will continue to drive operational efficiencies across the P&L to give us as much flexibility as possible while investing in growth in this uncertain environment. On the back of our strong performance in Q1, the sustained high demand of products across the globe as well as our premium position and premium offering, we are increasing our constant currency growth rate outlook for 2025 to at least 28%. Based on the latest spot rates, reported net sales are projected to reach at least CHF2.86 billion. This updated outlook implies a constant currency net sales growth rate of close to 25% for the remaining nine months of the year. Based on the strength of our order book for the last weeks of the spring, summer '25 season and the upcoming fall, winter '25 season, we see opportunities to accelerate beyond these numbers in a continued favorable consumer environment. So we remain cautious as we look into the second half of the year in the light of the macroeconomic uncertainties we are observing. The recent global trade policy shifts have introduced higher levels of planning uncertainty. This includes the additional tariffs in place during the 90-day pause period, the risk for increased tariffs and freight expenses as well as general volatility within the global supply chain. We will closely track and manage the broad-based currency effect from the above-mentioned depreciation of all key operating currencies against the Swiss francs for the remainder of the fiscal year, while taking it into consideration within our profitability outlook for the full year. As a result of these factors, we are embedding this higher degree of uncertainty in our gross profit margin and adjusted EBITDA margin outlook. We now project our gross profit margin to be in the range of 60% to 60.5% for the full year. Despite these uncertainties and given our strong position in the market, we remain committed to ongoing strategic investments in initiatives that will drive long-term sustainable growth, including investments to drive brand awareness and market share gains, impactful initiatives such as LightSpray technology enhancement and other key projects that drive innovation and excellence. Consequently, and given the size of the Swiss franc cost base, we now expect our adjusted EBITDA margin to be in the range of 16.5% to 17.5%. With this clear direction and commitment as well as the strength of our brand, we are convinced that our partners and fans will continue to invest into the most premium offering in the market, setting us up for long-term success from this position of strength. My thank you today goes to all of our partners that are on this journey with us. We are so grateful to be working together as we navigate these uncertainties at Dream On. With that, Caspar and I would like to open up the session to your questions. But before I hand over to the operator, I would like to say thank you to you, Jerrit, for your amazing work, leading Investor Relations since the IPO. It means a lot to me that we will continue to work together as you move into your next chapter at On. And I look forward to welcoming [Liv Ratlinger] in her new role. Now we are ready to begin the Q&A session. Operator (Operator Instructions). Jonathan Komp, Baird. Jonathan Komp Yes. Caspar, Martin. Good afternoon. I want to follow up and ask about brand awareness. I know in the past, you've shared some pretty positive development the increases you're seeing. Could you do a little bit more about what you're seeing across regions after some of the big brand campaigns you've had? And then when you think more specifically about the Americas business, could you maybe just talk through some of the drivers of growth that you see for the balance of the year? Caspar Coppetti Thanks for the question, John. You're spot on. This is first quarter, the exceptional results that we've seen are really a result from our brand efforts. As many of you know, last year, we started shifting more investment into the upper funnel because we realized that in our most important markets, but global in general, there's still a lot of people that haven't heard of On or have a hard time reading the logo what have you. So the initiatives that we've taken following -- coming out of the Olympics, of course, but then also we had the Super Bowl ad with Elmo and Roger that went viral. We've continued down this course, which is the Zendaya campaign. These things are really resonating. And we're also doing very market-specific things, for example, in China and other regions. But it's really global initiatives that are driving the brand demand. And maybe, Martin, you want to comment a bit more on the US specifically? Martin Hoffmann Yeah. Hi, John. Very happy to do that. So if we look on a global scale, we really see that our momentum doesn't stop at the end of Q1. We actually just had the strongest month in the history of the company in April. And this is true from a global perspective. So all regions have seen strong growth continued into April. If you look at the US specifically, I feel the picture that we see globally is the picture of the US as well with all our brand campaigns resonating very strongly. Our new products had a very strong start, driving growth. For us, it's important to win market share in running both our own specialty retailers as well as our general sporting goods retailers. And that really allows us to be, at the moment, extremely careful in terms of store expansion in the US. So we're very much on the breaks there on adding more doors. We still do this, but at a very controlled speed. We have planned a couple of new On retail stores across the US. And we see that they are working exceptionally well in the cities that we are in at the moment. The same-store growth that we have seen in Miami, in Abbot Kinney, in New York, is really, really strong. It's just a testament to the parent that we have. Then let's not forget that, especially in Q2 last year, we had disruptions on the operations side, which especially impacted our D2C business in the US. We feel in a much better position now. And so there's also a base effect. And then we still have a strong product pipeline to drive growth, and this is reflected in the strong preorders going forward. Operator Alex Straton, Morgan Stanley. Chad Britnell This is Chad Britnell on for Alex Straton. My first question kind of touching on John's question, but the first question is on the improved constant currency growth outlook for the full year. It looks like guidance down beds that are 2Q to 4Q growth than prior. So first, what region specifically are you planning better versus your previous outlook? And then any updated color on the shape of growth by channel for the remainder of the year would be helpful as well. Caspar Coppetti So if we look into the outlook, we said it on the call. We are applying quite a high level of prudence in the outlook. I just mentioned, we have seen the strongest month in the history of the company in April. So a really good start into that remainder of the year. And at the same time, we factor in the potential for that we see a slowdown in consumer demand driven by the uncertainties that are out there. But based on what we observe at the moment internally and in our channels and that our tier count partners, we don't see this. We see a very strong brand. We see our products and our brand awareness driving growth, and this is true across all the different channels. So nothing much has changed, but we also didn't increase the year-to-go outlook and basically state where we were and passed on the beat from the first quarter. With the perspective that our order book, our internal outlooks show that there's also an opportunity to end up with a higher growth rate. And this is really across all the different channels. We just mentioned e-comm remains very strong. You have seen that our D2C channel has been outperforming the wholesale channel in Q1. We have done a lot of investments into our capabilities in order to show case the product in a better way on our app, on our website, on our marketplaces. This is also visible in the strong apparel number, which is very much D2C driven as well. As I said before, our retail stores are driving significant growth all across the different regions. And so does our wholesale partners and our key accounts that continue to see very strong growth. So for us, this is a global story. So we spoke about Asia Pacific, where nearly all markets more than doubled the business in the first quarter. Europe, where all the strategic initiatives that we went through last year are really showing a positive effect in driving growth, including some of the younger markets that are really accelerating. And then as I said before, the US is the growth engine of the brand. And yeah, it's a very healthy business there. Operator Aneesha Sherman, Bernstein. Aneesha Sherman So I'm curious about what mitigation efforts you have already undertaken to minimize the headwinds you're facing from some tariffs, if any? And Martin, you referred to pricing strategy in your opening comments, are there any increases currently built into your margin guide? And to what extent do you think you're able to pass on some of the impacts in tariffs in terms of consumer pricing? Martin Hoffmann So it's very important to understand that all the outlook that we presented is under the assumption of the tariffs that are currently in place. So specifically for Vietnam, the 10% additional tariff during the past period that we are currently on. So that's the base for our outlook. As we said before, I think in those uncertain times, it's super important to focus on what the brand stands for and what the company stands for. And we want to be the most premium performance sportswear brand. And that requires us to have high-quality products to lead with innovation, to provide a customer with a unique customer experience to invest in sustainability and social impact. And we have done this over the last one, two years more than ever before. And this has really put us in a strong position to have earned pricing power in the different markets that we are in. And we want to separate ourselves even more from our competitors. And so we are in a position to increase prices and we will do this. So in the normal course of our business, starting with the fall/winter season in July. We will initiate a pricing round in the US on selected styles in order to really differentiate our products even more from our competitors on the premium position. And this really puts the brand in a unique position and where we think we can drive even more from a position of strength. And at the same time, of course, that also helps us to mitigate some of the tariff impacts that we are seeing and that are embedded. And therefore, we also stayed with our gross profit margin guidance very close to where we were before and very close to our long-term aspiration, factoring in the FX impact that we see and that we spoke about. But from a tariff perspective, we will widely mitigate the impact. Operator Jay Sole, UBS. Jay Sole I'd love to ask a little bit more about apparel. You mentioned your excitement around what you're seeing there. Can you just talk about what has made current apparel offering is so successful in sort of what's changed over the last couple of years to get you to a point where your enthusiasm sounds pretty clear. Caspar Coppetti Thank you, Jay, for pointing this out. And this is actually my highlight for the quarters that we've had such a tremendous progress on apparel, which, as you know, is a key building block for our future growth. Look, it's a combination of the homework that we've done over the course of '24 in two steps, we harmonized sizing. So our size and corresponds a little bit better to what consumers are used to from other brands, and that has really helped drives down return rates and increased repeat chair on apparel. But then more specifically, we see a lot of success in especially three categories: running, training/movements or anything you do at the chain or a class-based activity in the gym, and then tennis. And so we're building on these three pillars. Martin mentioned already in the prepared remarks, we had a really strong campaign with FKA twigs. We have now just doubled down a couple of weeks ago with Zendaya with the first kit product that we put out there. And we're going to continue on this path. So you're going to see basically running training and tennis as the main stories throughout the rest of the year. Some of our own retail stores are not really pushing high double-digit numbers on apparel share. Our-- yeah, if you do something special, I think Mark mentioned it as well, we -- have like a 50% apparel share, which is very encouraging for what we're planning to do in the future. Jay Sole Got it. If I can follow up on that. Are you seeing some of that momentum in apparel also affect the wholesale business? I mean do you expect the wholesale apparel business to start to accelerate based on the success that wholesalers are seeing in your DTC channel with the apparel? Caspar Coppetti Absolutely. Look, I also like the business has become more complex. And so we've been doing our homework to just get operationally better and apparel, it's very, very important to have the right selection, enough color choice and so on in those retail partners. So this has been a bit of a learning curve where our also wholesale partners have really helped us get sharper. And that's now in effect, and it's really yielding results. Apparel generally needs space to be presented for the -- you have -- we put a couple of styles on the wall, and you're there with the this apparel, you need to present in another way. So our own retail experience has helped us also serve our wholesale partners better. Operator Aubrey Tianello, BNP Paribas. Aubrey Tianello I wanted to follow up on the store rollout. And I know it's still early, but over the past year or so, you really started opening up flagships and larger stores outside of China. Any color you can provide us on how they're performing in terms of revenue productivity or margin profile. And how would you say you're currently tracking relative to the long-term target of getting to 10% revenue share from the stores. Caspar Coppetti Yeah, very happy to do this, Aubrey. So at the moment, we have 53 stores opened globally. Around 30 are in China and 20 are outside of China. If you looked at the 20 outside of China, then 18 of the 20 have exceeded the expectations that we had. And there are a couple of stores that by far exceeded the expectations, which gives us a lot of confidence into that channel. And this is both true on top line as well as bottom line. So the stores really become powerhouses for the brand to experience the customer, and it's really our opportunity to showcase the full breadth of the brand. In China, our stores are smaller on average, but we just opened, as I said in the remarks, our first flagship store in Chengdu. So this is really elevating the experience now in China as well. So if we look at the success of retail and if we think into the future, then it becomes very clear that owned retail will play a very important part in the strategy to make the brand even more premium. It will be a super important pillar for our power strategy, and it will also allow us to bring more premium product to the market. While at the same time, we are fully committed to our omni-channel sales model and our commitment to our retail partners is fully there. So we are on track to open 20 to 25 stores on an annual basis. And this that we are on track to the 10% I wouldn't be surprised if we are actually exceeding the 10% because of the strength and also the continued same-store growth that we are seeing. And what is really good to see. And with retail, we have some very clear test markets like in France, like in Italy, where we didn't have a strong presence before. It's really good to see the spillover from own retail into e-comm and that really both channels drive the growth to each other. And this is also how we build the tech capabilities at the moment. So we really invest into omni-channel capabilities, understanding the customer in both channels. And so we're extremely happy with that journey of expanding on retail. Operator Anna Andreeva, Piper Sandler. Anna Andreeva Best of luck to Jerrit and Mark and also congrats to Martin. We wanted to ask about Cloud 6. You mentioned it's resonating with both new and existing customers. Can you talk about the demo of the new On consumer that you're seeing with that, and if that's different by geography? And then just a quick follow-up. You mentioned April was the best month in company history globally. Is it -- should we think that similar momentum from 1Q is continuing quarter to date? Or just any quantification of that would be great. Caspar Coppetti Thanks a lot. I can take the question on Cloud 6. So Cloud is now about nine years old, and it's been a key driver for the business. So we've taken a conscious decision over the last two years to take the foot off the gas a bit on the Cloud. And that was Cloud 6, we're relaunching it as an icon. And it really goes across demographics. Definitely a strong uptake by a younger consumer. You may have seen also the photography and campaign around it. it's resonating well in the sneaker channels in the US, in Europe, especially in Asia. And it looks like the demos are all finding their own variant of the cloud that they are most into. We have tremendous success with the cloud waterproof in many regions. We have younger versions like Cloud Coast. And you're also going to see a couple of very sharp collaborations where we're bringing culture relevance to this icon. So we couldn't be happier with how the launch has gone and maybe also for everybody that is thinking about price increases. We have launched the Cloud 6 at $10 higher in the base model. And then we've also taken the variance up even higher, and we have not seen any price sensitivity on the demand side for that. In fact, it's been our most successful launch ever. Martin Hoffmann Yeah. And then just on Q1, Q2. So you know we are not guiding on the quarter. I think the message on April is really to show that the strength of the brand is there, the demand continues to be strong. Let's remember, last year, we had a very strong launch with the Cloudrunner in the second quarter versus this year with the Cloud and the Surfer, it was more in Q1. So we need to factor that in. On the other side, we had the operational impacts last year, which we don't foresee this year. It's more looking at the long-term outlook and also looking into '26. Really, the message is we were projecting to double the business over the course of two years which embedded a 26% CAGR. We have grown 33%. Last year, we had a 40% growth in Q1. Our outlook is on 28%-plus for the full year. We are well ahead of our growth aspiration. We talked about some of the strategic initiatives that are in there with China, with retail, with apparel. They are all proven to be working. And I think this is the important message that we are confident in what we are doing, and we will further scale those elements of growth. Operator Tom Nikic, Needham & Company. Tom Nikic I want to ask about the wholesale channel. Some brands that -- I wouldn't say you compete with them, but some footwear brands out there have said that wholesale partners have taking a more cautious view towards the second half of the year and that we should expect some more cautious ordering patterns from them. Have you seen anything like that? Or is your brand momentum just so strong that your wholesale order book is pretty much as you would expect? Caspar Coppetti Thanks. We're not seeing any of that. We're not seeing any cancellations in the order book. We also have to keep in mind that we have always been very diligent in planning our wholesale business. And so this is a very close exchange between us as partners, and we see their sell-through, we share what we have we can offer them at this point and what goes into other channels. And so no, there's no change in behavior that we're observing at this time. Operator Cristina Fernández, Telsey Advisor Group. Cristina Fernández Congratulations on the strong momentum. I also wanted to ask on wholesale, but different way. Earlier in the year, you had talked about 5% to 6% growth in wholesale doors for the year. Today, if I heard you correctly, you mentioned you were pausing some door growth in the US. So has that outlook changed? And if so, what's the door count growth for the year? And what are the key drivers? Martin Hoffmann Hi, Cristina. No, that outlook hasn't changed. So we still see the growth in the mid-single digits. As I said before, the -- if the demand for the brand is strong, you can be much more on the brakes by expanding your wholesale network because we want to grow in the long term, and we want to grow within the corridor that we set ourselves. And that's what we are doing. At the same time, as Caspar said, we put a lot of emphasis on making sure that the channel inventory is very clean. And at the same time, yes, we continue to expand but in a controlled way. We continue to open doors with our wholesale partners. We have some of the income markets, of course, where we have more opportunities for door openings. But as said, it's a very much controlled path, and we are very much in control of how much inventory we ship into the channel to make sure that they continue to drive a high share of full-price business which is super important for them, for us. We spoke about this. It also helped both channels during the holiday season to be set up in the right way. So that's our goal and that's our core focus and it all comes out of the perspective that we want to be the most premium brand. Operator John Kernan, TD Cowen. John Kernan Thanks for squeezing me in. Martin, how have your responsibilities or how are they going to evolve now with given Mark's departure? And is there any change in strategy going forward? Martin Hoffmann You already see, I need to add twice as many questions that before. I think the most important is we're looking for a CFO. So really need someone on my side to lead for the finance perspective. We have a super strong internal team. We are deep in the variation at the moment of internal, external candidates for the CFO role. Mark and I shared basically a lot of things in the past. So we had a lot of insights into each other's businesses and parts of the business. So there are not many blind spots for myself, I need to find my way in. And at the same time, we are very clear on the strategy. Nothing is changing there. The whole team is very clear and where we want to go for the next years. So I think this is a smooth transition from the 2:1. And at the same time, it's not 2:1. But we were a group of five and now we are a group of four to lead the company. And Caspar, David, Olivier are very much involved on the product side, on the brand side, which, of course, is a super important part of the business. And so we have a lot of exchange in that group. So yeah, it's going to be more lonely, but I think in terms of the actual transition, this will be very smooth. John Kernan Helpful. Thank you. If I could just sneak one more question in. Just any update on the automation projects as we get into the back half of the year. And then the scalability of LightSpray going forward, can you talk to initiatives there and what you see long term for that business? Caspar Coppetti Yeah, happy to take that on LightSpray. Look, LightSpray a revolution in material, in automation, in sustainability and in producing closer to consumers and we're laser focused in making it happen. We can't share a timeline yet. What we can share is that a month ago, we made the first Cloudboom LightSpray that were actually produced here in Zurich available to consumers through our most premium running specialty stores there are more launches planned of LightSpray products throughout the year as we're starting to build these production capabilities. But I don't want to use too much thunder launches are arming and you'll know about them first. Martin Hoffmann And then just a quick note on the automation project in our Atlanta warehouse. It's progressing well. We are still in the life testing phase. Majority of our D2C volume is already processed in an automated way. At the same time, still try to keep the load low and manageable for B2B. And so a lot of that still comes out of L.A., and over the next months. that load will increase. And so we will test that installation under basically, full load. But so far, the lights are on green. Operator Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect. Sign in to access your portfolio
Fashion Network
14-05-2025
- Business
- Fashion Network
Swiss Sneaker brand On lifts sales outlook as customers snap up new Cloud 6
On Holding AG nudged its sales growth forecast higher after a robust first quarter that saw strong demand for the Swiss sneaker maker's high-priced footwear in spite of growing uncertainty in the global economy. The Roger Federer -backed company now sees 2025 revenue growing by at least 28% to 2.86 billion Swiss francs ($3.4 billion) on a constant currency basis, On said Tuesday, a percentage point higher than the previous target. That's slightly behind the average of analyst estimates. Zurich-based On has become one of the top performers in the sneaker world, expanding from its core running shoes to other areas like tennis, training and apparel. Founded in 2010, the brand has grown rapidly in recent years, eating into market share of bigger players including Nike Inc. and Puma SE. The company's sales rose more than analysts expected in the first quarter to 727 million Swiss francs, up 40% from a year ago in constant currency terms. On's higher forecast assumes current levels of US tariffs remain in place. President Donald Trump initially set trade-sapping rates on countries including Vietnam and Indonesia — key production hubs for the sports footwear industry — before significantly reducing them for a 90-day window that expires in July. While it's unclear how exactly the trade war will play out now, On's leaders said the company can handle whatever comes. 'Come hell or high water, On is in a good place to weather any storm right now,' co-founder Caspar Coppetti said in an interview. 'The brand is extremely strong, the demand is there and the new product innovations are sticking.' On has the most expensive running shoes in the industry on average and is already moving to edge prices higher in the US starting in July — and potentially elsewhere heading into next year. That approach hasn't scared off consumers so far, with no drop in demand for the Cloud 6 model when it hit shelves this year for about $10 more than the previous iteration at about $160, Coppetti said. The company's gross profit margin ticked up in the first quarter to 59.9%, slightly ahead of estimates. Revenue in the period jumped 33% in the Americas, 130% in Asia-Pacific and 34% in Europe, the Middle East and Africa. 'We've had a great start to the year and we see that demand remains strong,' said co-Chief Executive Officer Martin Hoffmann, adding that April was a record month for sales. Despite the sales momentum, On trimmed the lower end of its gross profit margin target range for the year, saying it will probably wind up between 60% and 60.5%. The previous guidance was 60.5%. On's shares are up about 65% in the past year in New York, outperforming rivals Nike, Puma and Adidas AG, though they've dropped about 6% so far in 2025.
Yahoo
13-05-2025
- Business
- Yahoo
Why On Holding AG (ONON) Skyrocketed On Tuesday
We recently published a list of . In this article, we are going to take a look at where On Holding AG (NYSE:ONON) stands against other firms that are crushing the market. The stock market finished the trading day on a mixed note, as investors continued to digest April inflation figures, which came out lower than expected. On Tuesday, the Labor Department reported that the Consumer Price Index for April rose by only 0.2 percent last month, bringing the annual inflation rate to 2.3 percent, its lowest annual rate since February 2021. Among Wall Street's main indices, only the S&P 500 and the tech-heavy Nasdaq registered gains, by 0.72 percent and 1.61 percent, respectively. The Dow Jones, on the other hand, was down by 0.64 percent. Beyond the major indices, 10 companies finished the session with strong gains amid a flurry of positive developments, including ratings upgrades and impressive corporate earnings, among others. In this article, we name Tuesday's 10 top performers and detail the reasons behind their rally. To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5-million trading volume. A team of athletes showcasing the company's athletic footwear in an outdoor stadium. ON Holding AG grew its share prices by 11.83 percent to finish at $57.38 apiece as investors cheered the company's bullish business outlook for the rest of the year. In a statement, On Holding AG (NYSE:ONON) said it now expects its full-year net sales to grow by 28 percent. 'On continues to experience strong demand across channels, regions, and product categories. The company looks to further build on this global brand momentum with an exciting product pipeline for the rest of the year,' it said. In the first quarter of the year, On Holding AG (NYSE:ONON) achieved a 43-percent increase in net sales in the first quarter of the year, at CHF726.6 million versus the CHF508.2 million in the same period last year. This, however, failed to push its net income higher during the period, ending 38 percent lower at $56.7 million versus $91.4 million year-on-year. On the same day, investment firm Needham also raised its price target for On Holding AG (NYSE:ONON), to $62 from $55 previously, while also recommending to buy the stock. Overall, ONON ranks 8th on our list of firms that are crushing the market. While we acknowledge the potential of ONON as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than ONON but that trades at less than 5 times its earnings, check out our report about this . READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
