On Holding AG is celebrating its 15-year anniversary this year but is already handling its business and growth like a real grown-up adult.

“While every single year has been a new adventure, 2024 was particularly defining as we solidified our global brand presence,” said company Executive Co-Chairman and Co-Founder David Allemann as he reminisced about the birth and growth of his brand on a conference call with analysts. “This strength translates to the growth we have publicly committed. 1.5 years ago, we shared our strategic direction for the three-year timeframe from ‘24 to ‘26 with you, On’s strategic ambition to grow into the most premium global sportswear brand and the financial ambition to achieve a 26 percent net sales CAGR, a gross profit margin of north of 60 percent and an adjusted EBITDA margin of over 18 percent.”

Net sales for the year amounted to CHF 2.32 billion, reflecting a full year growth rate of 29.4 percent on a reported basis and 33.2 percent on a constant-currency (cc) basis. On said it achieved a gross profit margin of 60.6 percent, net income of CHF 242.3 million, and an adjusted EBITDA margin of 16.7 percent, and ended the year with a strong cash balance nearing CHF 1 billion.

Fourth Quarter 2024
In the fourth quarter, the company’s net sales increased 35.7 percent (+40.6 percent cc) to CHF 606.6 million. The strong performance was said to be supported by On’s ability to convert on the rapid rise in brand awareness across the globe.

“We had ended the holiday season with the ambition to drive significant growth through our own channels,” noted company CFO and Co-CEO Martin Hoffmann on the call. “Both our online and retail formats drove record traffic and highest ever quarterly transaction volumes, resulting in an overall record DTC (direct-to-consumer) share of 48.8 percent and CHF296.2 million, significantly higher than any previous quarter in our history.”

Direct-to-Consumer (DTC) sales channel growth increased 43.4 percent (+48.2 percent cc) to CHF 296.2 million.

“In 2024, we launched 19 new retail stores in iconic locations,” Allemann noted. “Think Champs-Elysees in Paris, Vittorio Emanuele in Milan, Ross Street in Chicago, and Emporium, Melbourne. These are just stores, they’re brand building hubs, essential for our growth and it’s working. In cities like Paris and Milan, we’ve seen a significant increase in regional awareness, proving that a physical presence drives digital momentum.”

He said that at the same time they are also building retail presence in markets with the brand’s first distributor-led retail stores opening in Santiago de Chile and Jakarta just a few months ago.

“A physical store acts as a flag in the ground, a lynch pin for emerging markets for all. In 2025, we’re looking forward to expanding our presence further in other parts of Southeast Asia as well as the Middle East,” Allemann said.

Wholesale sales channel increased 29.1 percent (+34.2 percent cc) to CHF 310.4 million. Hoffman said this growth continues to be driven by the company’s selective expansion with key accounts like Dick’s, JD, and Footlocker, as well as the expansion of shelf space and market share with many of On’s existing partners.

“While our own channels were able to capture a record high share of demand in the overall marketplace, we are thrilled that our partners similarly saw exceptional sellout growth during the holiday season, a further validation for the brand momentum we are seeing,” Hoffman shared.

Third, high impact presence in global markets. Our world is more fragmented. Life moments and society transcending topics that once united us have become rare and golden. It’s harder to combine these universal experiences that connect generations and cultures on a massive scale. On is navigating the noise and distraction with more than just visibility, but with creativity, relevance, and the right strategy. Brands that cut through are more valuable than ever. We have two key priorities for penetrating global markets, live sports moments, and premium retail stores.

Regional Sales Summary

Americas Region net sales increased 28.1 percent (+33.9 percent cc) to CHF 385.1 million.

“The brand building efforts outlined by David have led to visibly increasing traffic and very strong performance in both channels,” Hoffman continued. “And we continue to be incredibly happy with how our controlled wholesale expansion supports On’s reach and accessibility in the region. At the same time, we observe a meaningful acceleration and contribution from high-growth markets in Latin America.”

Hoffman noted that On’s largest market in the region, Brazil, more than doubled net sales compared to the prior year.

“Some might say this is a result of the Joao Fonseca effect, the latest Brazilian superstar and member of the On tennis roster, with particularly strong growth visible in the apparel business,” the CFO speculated.

EMEA Region net sales increased by 31.0 percent (+33.1 percent cc) to CHF 147.4 million.

“In EMEA, Q4 marked the final quarter of lingering year-over-year impacts from the strategic store closures at the end of 2023,” Hoffman highlighted. “We are therefore thrilled to see the significant acceleration in EMEA in the quarter, showing the potential of the region to contribute even more strongly to our growth paths going forward.”

He said the growth is “strongly supported by exceptional growth” in some of the brand’s more nascent markets, such as Southern Europe, particularly in France and Italy, where he said the retail stores in Paris and Milan have created a noticeable halo effect.

Asia-Pacific Region net sales jumped 117.5 percent (+124.6 percent cc) to CHF 74.1 million.

Hoffman said the “incredible growth” was visible across the entire region, with Japan and China continuing to be the key drivers in the region.

“During 2024, we became an even more global brand, executing towards our aspiration to grow China to 10 percent of our sales beyond 2026. We expanded our brand and distribution networks throughout the country, elevated the team and started to develop more China-centric products,” the CFO said.

“From a smaller base, South Korea, Australia, Hong Kong, as well as markets in Southeast Asia are accelerating significantly and further contributing to the broad-based momentum and success,” he said. “The standout moment for Q4 was the opening of our second Hong Kong store in November, quickly growing to be on par with our first location and ranking among the top performing stores in our global portfolio.”

Category Sales Summary

Footwear (Shoes) category net sales from shoes increased by 33.6 percent (+38.5 percent cc) to CHF 568.8 million for the fourth quarter.

“Growth continues to be driven by our performance running products,” noted Hoffman. “As touched on earlier, 2024 has been the year of deepening our focus on key franchises. It’s clearly paid off in Q4 with the Cloudmonster and Cloudsurfer contributing significantly to the growth. Running is in our DNA, and we are extremely excited to continue to drive our market share with the great product lineup in 2025, kicked off by the Cloudsurfer 2 launch a couple of weeks ago.”

Hoffman said that after a period of successfully focusing on the diversification of the brand’s product portfolio and expanding its performance running share, the latest iteration the classic Cloud franchise (Cloud 6) will return to being a significant contributor to growth in 2025 and beyond.

“While the full-scale launch will happen in a few days, demand from our partners over the past months has been amongst the highest we have seen yet,” he said.

Allemann described the Cloud 6 as a refresh of an icon, keeping its signature comfort, versatility, and functionality.

“The Cloud has grown from a running shoe into an everyday essential and one of our most beloved franchises,” Allemann said. “It’s become synonymous with all, strengthening our overall brand. And with the full release just days away, we’re already seeing strong momentum.”

He also talked about the emerging LightSpray franchise as an example of a product branch brand that will support the innovation positioning of the main On brand.

“In other words, On is building a portfolio of strong product brands that support On as the parent brand,” he said.

Hoffman confirmed that at the core of the brand strategy is still a focus to win in the running community.

“During the last 18 months, we have introduced an explosion of new, highly innovative products. We have built new levels of credibility through the winds of our athletes and our presence at the largest running events,” Hoffman shared.

“We have reached millions of new and existing fans. Our top three running franchises, Cloudmonster, Cloudsurfer, and Cloudrunner, have grown between 60 percent and 140 percent during 2024. We reached more younger customers than ever before. The share of products sold to customers 35 and younger has increased between 6 and 8 percentage points for these three franchises.”

Hoffman said 2024 was a breakout year for the brand’s new verticals, tennis and training, establishing On as the brand of choice for consumers seeking the unique combination of performance, design and sustainability beyond the running core.

“Our ambition to be a true head-to-toe sportswear brand is solidified in the fact that we have reached more than CHF100 million in net sales from apparel,” he said.

Apparel category net sales increased 77.5 percent (+82.5 percent cc) to CHF 32.6 million in the fourth quarter.

Hoffman shared the apparel in the company’s DTC channels grew by 67 percent, resulting in a significantly higher DTC mix compared to the footwear category.

“During 2024, we renewed the vast majority of our products, expanded our product offerings across running, tennis and training. We introduced different fits and elevated the consistency of our sizing,” Hoffman said.

He said the On brand “significantly invested” into its capabilities to drive sales growth in selected key accounts and its DTC channels.

“With that, apparel is set up to drive strong growth combined with a strong margin profile going forward,” the CFO said. “Our success in apparel directly correlates to our successes in On retail.

“Powered by our retail expansion, 2024 marked a significant year for On’s apparel business with elevated collections and brand building campaigns centered around Zendaya and training,” Allemann suggested. “Proprietary research reveals that these efforts have significantly increased consumer perception of On as a head-to-toe sportswear brand. The expansion of On stores is elevating the visibility and growth of the apparel category for On to a next level.” He said On will continue to drive apparel-first categories such as training in 2025.

“Our latest training collection was launched in January with The Body is Art campaign featuring FKA Twigs to enhance our brand presence in gyms,” Allemann continued. “The campaign highlights our approach to training apparel by showcasing an artist who integrates high performance movement with music, arts and culture. So, bottom line, showcasing the On brand head-to-toe in landmark stores in major cities and in live sporting events remains a key to brand growth.”

Hoffman said On is now operating in more than 10,000 square meter retail space.

Accessories category net sales increased 80.0 percent (+85.6 percent cc) to CHF 5.2 million in the fourth quarter.

Income Statement Summary
Driven by the significant DTC share expansion and strong full-price demand throughout the holiday season, On said it achieved a record-breaking gross profit margin of 62.1 percent in Q4 2024, the highest in the company’s public history, and a 170 basis-point improvement year-over-year. Gross profit increased 39.5 percent to CHF 376.8 million in Q4 from CHF 270.2 million in Q4 2023.

Net income amounted to CHF 89.5 million, or 14.8 percent of net sales, in the fourth quarter, compared to a net loss of CHF 26.8 million, or negative 6.0 percent, in the prior-year Q4 period. Adjusted net income increased to CHF 107.7 million in Q4 from a loss of CHF 16.3 million in the prior-year quarter.

Basic EPS Class A (CHF) increased to CHF 0.28 in Q4 from a loss of CHF 0.08 per share in Q4 2023; diluted EPS Class A (CHF) increased to CHF 0.27 per share in Q4 from a loss of CHF 0.08 per share in the fourth quarter of 2023. Adjusted basic EPS Class A (CHF) increased to CHF 0.33 per share in Q4, compared to a CHF 0.05 loss per share in Q4 2023 and Adjusted diluted EPS Class A (CHF) increased to CHF 0.33 per share in Q4, compared to a loss of CHF 0.05 per share in the prior-year quarter.

Adjusted EBITDA increased by 38.3 percent to CHF 99.4 million, or 16.4 percent of net sales in Q4, compared to CHF 71.9 million, 16.1 percent of net sales in Q4 2023.

The company said that significant strides made in 2024 across all strategic building blocks, as outlined at the 2023 Investor Day, provide On with a stronger foundation than ever before, enabling continued strong growth and profitability expansion in 2025.

Full-Year Summary
(full-year 2024 compared to full-year 2023)

  • Net sales increased by 29.4 percent to CHF 2.32 billion, or by 33.2 percent on a constant currency basis;
  • Net sales through the DTC sales channel increased by 40.3 percent to CHF 942.8 million, or by 44.6 percent on a constant currency basis;
  • Net sales through the wholesale sales channel increased by 22.8 percent to CHF 1,375.5 million, or by 26.3 percent on a constant currency basis;
  • Net sales in Europe, Middle East and Africa (“EMEA”), Americas and Asia-Pacific increased by 18.2 percent to CHF 577.8 million, 27.4 percent to CHF 1,480.3 million and 84.5 percent to CHF 260.2 million, respectively;
  • Net sales in EMEA, Americas and Asia-Pacific increased by 19.9 percent, 31.2 percent and 95.6 percent on a constant currency basis, respectively;
  • Net sales from shoes, apparel and accessories increased by 28.5 percent to CHF 2,199.6 million, 46.7 percent to CHF 101.0 million and 49.5 percent to CHF 17.7 million, respectively;
  • Net sales from shoes, apparel and accessories increased by 32.3 percent, 51.0 percent and 54.3 percent on a constant currency basis, respectively;
  • Gross profit increased by 31.7 percent to CHF 1.41 billion from CHF 1.07 billion in 2023;
  • Gross profit margin increased to 60.6 percent from 59.6 percent;
  • Net income increased by 204.5 percent to CHF 242.3 million from CHF 79.6 million;
  • Net income margin increased to 10.4 percent from 4.4 percent;
  • Basic earnings per share (“EPS”) Class A (CHF) increased to 0.75 from 0.25;
  • Diluted EPS Class A (CHF) increased to 0.74 from 0.25;
  • Adjusted EBITDA increased by 40.0 percent to CHF 387.6 million from CHF 276.9 million;
  • Adjusted EBITDA margin increased to 16.7 percent from 15.5 percent;
  • Adjusted net income increased to CHF 317.4 million from CHF 112.4 million;
  • Adjusted basic EPS Class A (CHF) increased to 0.98 from 0.35; and
  • Adjusted diluted EPS Class A (CHF) increased to 0.97 from 0.35.

Balance Sheet Summary
Hoffman said the company “slightly increased” the level of capital expenditure to 2.8 percent of net sales in 2024 compared to 2.6 percent in 2023. He said this was largely a result of the company’s ongoing retail expansion.

“One position I’m particularly proud about is net working capital,” he highlighted. “As percent of net sales, net working capital improved from 27.7 percent in the prior year to 21.5 percent in 2024. This is the reflection of our culture of innovation and excellence and the ability of our team to drive financial strengths across the P&L and balance sheet.”

On Holding achieved an operating cash flow of CHF 510.6 million in 2024, more than doubling year-over-year.

Resulting total cash balance stood at CHF 924.3 million at the end of the year, significantly up from CHF 494.6 million at the end of 2023.

Outlook
Building on the financial results in 2024 ahead of guidance, On said it is tracking ahead of the trajectory implied by its mid-term targets outlined at the 2023 Investor Day.

In 2025, On said it is confident in its ability to continue on this path and achieve a constant-currency net sales growth rate of at least 27 percent for the full year. At current spot rates, this translates to full-year reported net sales of at least CHF 2.94 billion. Due to prior-year comparison dynamics and timing of key product launches, including the Cloud 6, On said it anticipates a higher growth rate in the first half of the year.

The company said that, supported by On’s premium brand positioning and the continued expansion of its DTC channel, and factoring in an anticipated foreign exchange headwind due to the strengthened U.S. Dollar against the Swiss Franc, On expects to maintain its gross profit margin at around 60.5 percent for the full year 2025.

Driven by the strong gross profit margin and anticipated operational efficiency gains, On said it is steadily progressing toward its ambitious mid-term target of achieving an adjusted EBITDA margin of over 18 percent in 2026. In 2025, On anticipates to achieve a full year adjusted EBITDA margin in the range of 17.0 percent to 17.5 percent.

In its 2024 20-F filing with the SEC, On warned that the new Trump tariffs could have an adverse impact on its outlook.
The new 25 percent tariffs on imports from Canada and Mexico, and an additional 10 percent on top of the 10 percent tariffs already in place on China-source product, took effect after midnight last night.

Its good to warn the market, but the tariffs look to be much ado about nothing, unless EU tariffs come up next.

On Holding reported in 2024 that it sourced about 90 percent of its shoes and approximately 60 percent of its apparel and accessories from Vietnam. The company last year sourced about 7 percent of its apparel and accessories from China. None of On’s running shoes were sourced from China last year, the company said. On also did not source any goods from Canada or Mexico in 2024.

Image courtesy On Holding AG