Caspar Coppetti, executive co-chairman and co-founder of On Holding AG, told a group of analysts on a conference call on Tuesday that demand for the On brand remains incredibly strong.

“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,” Coppetti said on the May 13 call. “Beyond our financial results in the first quarter, we have seen this vision come to life over recent months.”

Coppetti said the company is rapidly expanding the brand awareness and reaching new audiences through “innovative products, strategic partnerships and culture moments that resonate deeply.” Coppetti also said “soft wins” took center stage in the early part of the first quarter, with Roger Federer generating significant buzz for the On brand and causing “a ripple effect across social and traditional media alike.”

“This momentum continued into a larger soft wins running campaign with the new Cloudsurfer 2 at the forefront,“ he said. “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 other new launches in the quarter, a true highlight for me was the launch of the Cloud 6,” Coppetti continued. “As On’s largest product launches, we’re thrilled to see the Cloud once again tying us closer with existing customers while also reaching new audiences who are discovering it for the first time,“ the brand co-founder shared. “After a few years of focus on diversifying our product portfolio, the whole ARM team has been patiently waiting for this opportunity to ignite our icon with renewed energy and once again share the story of the Cloud with the world.”

Coppetti said the Cloud is a strong example of how On continuously refines and elevates new launches to deliver a 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,“ Coppeti noted. “Beyond consistent and continuous product innovations, authentic partnerships are key to growing On’s cultural relevance.”

Coppetti said that while product franchises continue to fuel strong commercial momentum, the company believes 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,“ Coppetti said. “At the same time, pop-ups in key global locations such as Boston during Marathon week are already bringing this innovation closer to runners and fans of the On brand.”

Coppetti stressed that LightSpray represents a “radical shift“ in materials, automation, supply chain, production, and steps towards circularity. He said the company is laser-focused on unlocking its full potential.

“That’s why we’re actively building a future-facing team, hiring computational engineers, robotics specialists and plant engineers to support this next phase,“ Coppetti shared. “I’ve had the privilege to visit some of the production sites we are 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 On, a major leap toward a more resilient and locally diverse supply chain.“

First Quarter Sales Summary
On Holding generated net sales of CHF 726.6 million in the first quarter, growing 43 percent year-over-year on a reported basis and 40 percent on a constant currency (cc) basis.

On Holding AG reports in the Swiss franc (CHF) currency.

“This marks the highest quarterly net sales in the company’s history and is the result of the continued strong demand that we are seeing across all our channels,“ noted company CFO Martin Hoffmann, who will step into the role as co-CEO on July 1.”

The DTC (direct-to-consumer) channel again fueled growth, increasing by 45.3 percent (+42.4 percent cc) year-over-year, reaching net sales of CHF 276.9 million. He said the growth came in ahead of expectations and has further resulted in an increased DTC share of 38.1 percent of total sales in Q1 2025, up from 37.5 percent in Q1 2024.

“Both e-comm and retail are contributing strongly to this result, and we are seeing the synergies across the two,“ Hoffman noted. “In e-comm, we remain very pleased with the global momentum and continued full price execution across our own website and online marketplaces.”

The brick-and-mortar retail business, which comes off a smaller base, reportedly continues to showcase exceptional momentum from new store openings and “meaningful increases in existing store productivity.“ Hoffman said the store rollout and strong growth of this channel are 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,“ he shared. “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 41.5 percent (+38.6 percent cc) year-over-year, reaching CHF 449.7 million in the first quarter.

“The demand for our brand is fully reflected in strong sellout numbers of our wholesale partners globally,“ Hoffman suggested. “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, and we’re excited to see it once again contributing strongly to our growth.”

Regional Summary

EMEA Region
The Europe, Middle East and Africa region grew by 33.6 percent (+33.0 percent) to CHF 168.6 million. Hoffman noted that constant-currency growth came from strong growth rates across all channels. He said the company was excited to see increasing contributions from less established markets like Spain, Belgium, the Netherlands, and the Scandinavian markets. In France, the boost from the Olympics established the market among the top markets in Europe in terms of net sales.

Americas Region
The Americas region net sales grew 32.7 percent (+28.6 percent cc) year-over-year to CHF 437.4 million.

“We continue to see strong performance across our key strategic retail partners in the U.S., with regions like the Southeast and West Coast outpacing the broader market,“ Hoffman shared. “Reflecting this momentum, our own retail stores in Miami and Albuquerque are delivering standout results. We are also excited to open our second California store in Q1, located in Newport Beach, which recorded the highest apparel share among all U.S. stores during the quarter.

Asia Pacific Region
In the Asia Pacific region, Hoffman said “the incredible momentum“ continued into Q1, with net sales growing 130.1 percent (+128.9 percent cc) year-over-year to CHF 120.6 million in Q1.

“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,“ Hoffman said. “As we have previously spoken about, growth continues to be very broad across the region.

Hoffman said China, Japan, Australia, Korea, and the company’s distributor markets in Southeast Asia more than doubled in net sales. “Momentum in China continues to accelerate, achieving the strongest growth across the region,“ Hoffman noted. “Just two weeks ago, we opened our first flagship store in China, in Chengdu’s super premium Tai Koo Li.”

Product Category Summary

Footwear
Net sales from Shoes grew 40.5 percent year-over-year to CHF 680.9 million in the first quarter.

“Our strategic focus on building key franchises is paying off,“ Hoffman said. “With the CloudServer2 launch, the continued strength of the Cloudmonster, the Cloudrunner, our new race product, and our running franchises achieved some of the strongest growth rates,“ Hoffman shared. He said the entire Cloudsurfer franchise got a lift from a print campaign around Cloudsurfer 2, with Cloudsurfer Next seeing a notable lift in momentum following the launch.

Outside of running, the new Cloud 6, the Cloud Tilt, CloudNova, the Roger, and the new CloudZone reportedly drove “significant“ growth.

Apparel
Net sales from Apparel reached CHF 38.1 million for the quarter, said Hoffman, the highest quarterly net sales in On’s history, increasing by 93.1 percent year-on-year.

“While this growth rate is partly attributable to the prior year base, we are highly energized by the success and feedback for our product lineup,“ said Hoffman. Apparel momentum is said to be off to a strong start in 2025, powered by “standout“ launches in running, movement and tennis.

“Our trending campaign with FKA Twigs launched earlier this year drove significant gains in the apparel share across key e-commerce regions,“ he noted. “Meanwhile, other formats such as shop-in-shops with strategic retail partners delivered outstanding results.”

Income Statement Summary
Gross margin increased 20 basis points year-over-year to 59.9 percent, up from 59.7 percent in Q1 2024, which the company reported to reflect increased DTC share in the quarter versus the prior-year Q1 period as well as “the power of the premium position of the brand.“

SG&A expenses, excluding share-based compensation, accounted for 47.3 percent of net sales in Q1, down from 48.8 percent in the Q1 period last year.

“We continue investing in all parts of the business while driving operational efficiencies, most reflected in the distribution expense line,“ Hoffman noted. “While we currently continue to fulfill higher-order volumes through our LA warehouse, we remain highly focused on progressing with our new automated Atlanta facility.”

The resulting adjusted EBITDA margin for Q1 was 16.5 percent of net sales, up from 15.2 percent in the first quarter of 2024.

Net income reached CHF 56.7 million, despite the “sizable unrealized FX loss“ due to the lower U.S. dollar at the end of the quarter.

Balance Sheet Summary
The company’s cash position was CHF 871.8 million at the end of Q1, down from CHF 924.3 million at the end of 2024. The decrease was said to be primarily driven by the higher net working capital, the consequence of the strong growth and larger wholesale quarter, which resulted in a temporary increase in accounts receivable.

Capital expenditure was CHF 12.1 million in Q1 2025, representing 1.7 percent of net sales, said to be broadly in line with the 1.8 percent recorded in Q1 2024.

Inventory remained relatively stable compared to year-end levels, standing at CHF 399.3 million at the end of the quarter.

Outlook
“Over the last months, we have focused our energy on elevating our processes and capabilities across all touch points, and we are very happy with the progress we have made,“ Hoffman shared. “These efforts have laid the foundation for what we share here today and empower us to dream even bigger as we look beyond 2025.“

Hoffman said the company is approaching the remainder of the year with a performance-driven product pipeline, strong brand momentum, high energy levels across the team, the right inventory, and a strong cash position.

“On the back of our strong performance in Q1, the sustained high demand for our 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 percent, “Hoffman announced.

“Based on the latest spot rates, reported net sales are projected to reach at least CHF 2.8 billion,“ Hoffman continued. “This updated outlook implies a constant-currency net sales growth rate of close to 25 percent for the remaining nine months of the year.”

Hoffman said that, based on the strength of the order book for the last weeks of the Spring/Summer 2025 season and the upcoming Fall/Winter 2025 season, the company sees 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,“ Hoffman said.

On is now projecting gross margin to range between 60 percent to 60.5 percent for the full year.

“Despite the 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,“ Hoffman noted.

“Consequently, and given the sizable Swiss Franc cost base, we now expect our adjusted EBITDA margin to be in the range of 16.5 percent to 17.5 percent,“ Hoffman said. “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 who are on this journey with us.“

Image courtesy On Holding AG