On Holding Beats Q1 Estimates, Raises Profitability Outlook

CNBC reported Tuesday that Swiss sportswear company On Holding delivered a first-quarter beat on both revenue and earnings per share, prompting management to lift its full-year profitability guidance. The results arrive as rival Nike continues to lose ground in key international markets.

On Holding Earnings Top Expectations Across the Board

On Holding posted Q1 revenue of 831.9 million Swiss francs, ahead of the 823 million francs analysts had forecast. Adjusted earnings per share came in at 37 Swiss cents, well above the 27-cent consensus estimate. Net income for the quarter nearly doubled year-over-year to 103.3 million francs. Total sales grew 14.5% compared with the same period last year. The strong top-line result was driven primarily by wholesale, which rose 13.3% to 509.6 million francs and surpassed analyst forecasts. Direct-to-consumer revenue grew 16.4% to 322.3 million francs but fell modestly short of the 326 million francs Wall Street had pencilled in.

Margin Guidance Raised Despite Macro Uncertainty

On Holding now expects its gross profit margin to reach at least 64.5% for the full year, up from a prior target of 63%. Its adjusted EBITDA margin guidance was lifted to a range of 19.5%-20%, compared with a previous band of 18.5%-19%. Co-CEO Caspar Coppetti told CNBC the company serves an affluent and aspirational consumer that is somewhat insulated from broader economic pressures, including energy price volatility. On is maintaining a 20% tariff assumption on Vietnamese imports in its guidance despite a recent U.S. Supreme Court ruling that paused that duty. Coppetti said the company has applied for a tariff refund but prefers to plan conservatively while the situation remains unresolved.

Also Read: Nike Reports Quarterly Revenue Decline as It Navigates Turnaround

Background: A Brand Built on Premium Positioning

On Holding has grown rapidly since going public in 2021, carving out a niche among higher-income consumers willing to pay premium prices for performance footwear. Despite that momentum, the stock has fallen nearly 27% year to date, as some investors question whether the brand can scale into a genuine global heavyweight. The company is investing in apparel and expanding into new sports including tennis to broaden its addressable market.

Also Read: How Premium Sportswear Brands Are Outpacing Legacy Players

China Sales Highlight a Growing Divide With Nike

On Holding’s China business is expanding at a high-double-digit percentage rate, with apparel now accounting for roughly 30% of sales in the region. That compares with a companywide apparel penetration rate of around 6%. Coppetti attributed the strength to the brand’s Swiss identity and reputation for quality, noting that Chinese consumers are increasingly drawn to either homegrown labels or distinctly differentiated international ones. Nike, by contrast, has seen persistent sales erosion in China as local brands capture domestic loyalty.

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