On Holding AG (ONON) shares fell approximately 11 percent in early market trading on Tuesday, March 3, but recovered half of that by early afternoon after the Switzerland-based active lifestyle softgoods and accessories company posted strong Q4 results but issued a softer-than-expected revenue outlook for 2026.

Net sales are expected to grow by at least 23 percent year-over-year (y/y) on a constant-currency basis in 2026. At current spot rates, this implies reported net sales of at least CHF 3.44 billion (~$4.39 bn) for the year ahead.

Telsey Advisory Group issued a note on Tuesday morning maintaining its Outperform rating and its $65 price target for the stock. ONON shares closed at $46.76 on Monday, March 2.

“Momentum for On remained strong in 4Q25, driven by a high sell thru of footwear franchises and balanced growth across regions,” Telsey said in its note. “All metrics were better than expected and the stronger sales flowed through to the bottom line.”

On Holding Co-Founder & Executive Co-Chairman David Allemann told participants on a Tuesday conference call with analysts that the company set ambitious expectations for strong profitable growth for 2025 and what followed went well beyond those goals.

“Demand for our brand accelerated faster than we had planned [in 2025],” Allemann shared with the group. He said On cleared the CHF 3 billion revenue hurdle in 2025 as sales grew 36 percent year measured in constant-currency (cc) terms, and delivered On’s highest-ever gross profit and adjusted EBITDA margins.

“For me, this outperformance is deeply meaningful because it shows our premium strategy is working,” Allemann continued. “And our elevated offer is resonating with consumers even stronger than anticipated. In fact, we see an acceleration in key areas.”

Allemann continued, articulating On’s view of the trend taking in the global market. “Let me zoom out as this acceleration happens on the backdrop of a profound societal shift,” he said. “The traditional leisure class is giving way to the movement class. All signifier[s] of wealth, sedentary comfort and over consumption are being replaced by a desire for vitality. You see the shift in the declining sales of self-indulgent categories.

“Today, status is an investment in the self,” he envisioned. “Health is the new wealth, longevity is the ultimate luxury. For this new ageless athlete, sportswear has shifted from utility to identity, capturing a massive share of their life and their spending power.”

Translation: The top of the pyramid is where the On brand will continue to play now and in the future to meet the consumer where they are playing. The same could be said of fast-growing Arc’teryx – especially in Asia – and many would argue this level is where Nike Brand  expects to play again after getting off track from innovation as their core. The footwear brands that are talked the most about are always aspirational brands and products, not cheap vertical brands or or brands sold at mass-retail or even the mid-tier.

When the Trump Tariffs hit, there were brands that had to think about holding price and there were others that knew they had permission from consumers (and maybe not from retailers) to maintain margins through an ongoing onslaught of temper tantrums from the Oval Office. On Holding is in that class. As is Deckers Brands with its Hoka and Ugg brands. The aforementioned Arc’teryx brand and Solomon Footwear were also seemingly above the fray. Pinnacles don’t often erode because they are hard to reach – and they are defensible.

“We see three defining answers driving our acceleration,” Allemann said after asking rhetorically what the movement class demands from the On brand.

“First, relentless performance innovation. We don’t just talk about innovation. We engineer it,” he stated. “In the past 5 years, we scaled our R&D team by 1,000 percent. Today, over 400 experts, sports scientists, robotic specialists and AI engineers operate out of our Zurich labs.”

Allemann said the On labs in Zurich are home to the only advanced foam competence center outside of Asia and he claimed that On is the the first brand which is able to combine structural engineering with super foams.

“The immediate result is the upcoming Cloudsurfer 3, which is 15 percent lighter, 20 percent softer, and provides 15 percent more energy in push-offs,” he explained. “Over the next couple of years, we will bring this technology to a wide range of On’s everyday running shoes, making cutting-edge innovation accessible for many of our fans.”

Allemann turned to what he dubbed the brand’s crown jewel: LightSpray.

“We are completely rewriting the future of manufacturing by changing the very nature of how a shoe is constructed,” the co-founder explained. “We are no longer building upper. We are spraying them. A robotic arm, spins a 1.5 kilometer continuous filament into a perfect fit upper in exactly 3 minutes. We took 200 assembly steps and reduced them to one.”

He said the process generates 75 percent less CO2 and the entire shoe weighs just 170 grams, claiming that it is one of the lightest elite super shoes ever to compete in a marathon.

“The proof is on the podium, wearing the Cloudboom Strike LightSpray, Hellen Obiri didn’t just win the marathon in New York in November,” he shared. “She shattered a 22-year-old course record. And now we scale. Last week, we opened our newest LightSpray facility in Busan, South Korea (see more at bottom), increasing our production capacity 30-fold compared to 2025.”

Second, Allemann talked about premium inspiration.

“For the movement class, movement isn’t just a work out. It’s their identity,” he said. “They are buying into a brand that intersects with fashion and the zeitgeist. We aren’t following trends. We are co-creating culture. Take our collaboration with Loewe ‘now we need’ [for a] fifth year. We just launched our ace drop featuring the Cloudsolo at $750.” He said the consistent and strong demand they see at this premium price point is a profound validation of On’s premium pricing power.

“The global energy is electric,” the brand’s co-founder stated. “At Paris Fashion Week, our high-fashion collaboration sorted with younger consumers from APAC to London.”

Third, Allemann stressed the importance of a complete expression of the brand from head to toe.

“Performance footwear will always be our anchor,” he stated. “To truly serve this community, we are building a complete sports warehouse. And the breakthrough is happening right now. In 2025, our Apparel business delivered an incredible 76 percent net sales growth at constant currency. Proving we can build a highly profitable multi-category business. We saw apparel share of sales climb across every single region and every single channel, driven primarily by our direct-to-consumer business.”

He continued, “Our foundation is running, but the movement class lives in our gear long after the long run is over. They demand our performance in the gym, on the streets and across entirely new sports. We are capturing these everyday hours with female-focused innovations like our new sense tech fabric. The ultimate proof for this multi-category power, tennis. Demand across all our apparel business was outstanding last year and tennis was our fastest-growing category.”

Reality has to come into play when talking about a brand’s balance of footwear to apparel in any given year. The On brand saw Apparel at ~5.6 percent of total revenues worldwide in 2025, up from ~4.4 percent in 2024, but also noted that the combined Apparel + Accessories business was ~7 percent. Most footwear executives would suggest that anything less than 10 percent is a rounding error – unless you have a CEO with vision to see it through. It provides a good starting point and if it continue on its current track the apparel business has a chance to make a difference in how the brand shows up, but also in gross margins, which are generally higher on the apparel side of the business for most brands.

Not that the brand needs much help on the gross margin front.

Company CEO & CFO Martin Hoffmann added that the On brand’s premium positioning generates high gross margins, which he said are partially reinvested into product innovation, brand experience, the culture and the team. which in turn fuels future growth and even greater profitability.

Fourth Quarter and Full Year Financial Summary

Fourth Quarter Summary
Net sales for the 2025 fourth quarter increased 22.6 percent year-over-year (y/y) to CHF 743.8 million (~$930 mm), or growth of 30.6 percent on a constant-currency (cc) basis.

DTC (direct-to-consumer) channel sales increased 21.7 percent y/y, or 30.0 percent on a constant-currency basis, to CHF 360.6 million (~$451 mm) in Q4. Wholesale channel net sales increased 23.4 percent y/y, or 31.2 percent on a constant-currency basis, to CHF 383.2 million (~$479 mm) in the period.

On Holding AG reports in the Swiss franc (CHF) currency. Any Q4 conversions to U.S. dollars were calculated at an average of 1 CHK to $1.25 for the fourth quarter. For the full year, ON used an average conversion rate of 1 CHK to $1.276. For year-end conversions to euros, ON used 1 CHK to €1.053 as the average for the year.

Regional Sales Summary

  • EMEA net sales in EMEA increased 24.2 percent to CHF 183.0 million (~$229 mm). Constant-currency net sales increased 27.5 percent y/y.
  • Americas region net sales grew 12.8 percent to CHF 434.3 million (~$543 mm). Constant-currency net sales increased 21.3 percent y/y.
  • APAC region net sales increased 70.8 percent to CHF 126.5 million (~$158 mm). Constant-currency net sales increased 85.1 percent y/y.

Category Sales Summary

  • Shoe sales increased 20.8 percent y/y to CHF 687.3 million (~$859 mm) in Q4. Constant-currency net sales increased 28.8 percent y/y.
  • Apparel sales grew 38.3 percent y/y to CHF 45.1 million (~$56 mm) in the quarter. Constant-currency net sales increased 46.0 percent y/y.
  • Accessories sales jumped 117.7 percent to CHF 11.4 million (~$158 mm) in the three-month period. Constant-currency net sales increased 131.3 percent y/y.

Profitability
Gross profit increased 26.1 percent y/y to CHF 475.3 million, or 63.9 percent of net sales, in Q4 2025, from CHF 376.8 million, or 62.1 percent of net sales, in Q4 2024.

Net income decreased 22.9 percent y/y to CHF 69.1 million (~$86 mm), or 9.3 percent of net sales, in Q4 from CHF 89.5 million, or 14.8 percent of net sales in the prior-year Q4 period. Basic EPS Class A (CHF) decreased to CHF 0.21 from CHF 0.28 and Diluted EPS Class A (CHF) decreased to CHF 0.21 from CHF 0.27.

Adjusted net income/(loss) decreased to CHF 83.5 million from CHF 107.7 million (~$135 mm) in Q4. Adjusted basic EPS Class A (CHF) decreased to CHF 0.25 from CHF 0.33 and Adjusted diluted EPS Class A (CHF) decreased to CHF 0.25 from CHF 0.33 in Q4 2024.

Adjusted EBITDA increased 31.8 percent y/y to CHF 131.0 million, or 17.6 percent of sales, in the 2025 fourth quarter from CHF 99.4 million, or 16.4 percent of net sales in the 2024 fourth quarter.

Key Financial Summary at Year End

  • Cash and cash equivalents increased by 10.3 percent to CHF 1,019.9 million from CHF 924.3 million; and
  • Net working capital increased by 14.3 percent to CHF 570.3 million from CHF 498.9 million.

David Allemann, co-founder and executive co-chairman, On Holding AG, said: “Surpassing the CHF 3 billion annual revenue milestone with record profitability is a profound validation of our vision to build the world’s most premium global sportswear brand. We are witnessing a fundamental societal shift, as people globally replace traditional markers of status with a commitment to health, longevity, and performance. On is uniquely positioned to deliver what this discerning consumer demands – from scaling breakthrough innovations like LightSpray to deepening our cultural resonance and delivering our fullest brand expression from toe-to-head. We are building a brand designed for the future of movement.”

Outlook
On Holding reported that, based on its performance in 2025, the company is now entering the final year of its three-year strategy, from “a position of significant strength, accelerating toward its vision of being the most premium global sportswear brand.” The company said it is performing materially ahead of the mid-term targets established at its 2023 Investor Day, driven by a breakthrough innovation pipeline and the global scaling of its premium brand expression.

In 2026, we expect net sales to grow at least 23 percent at constant currency,” shared CEO/CFO Hoffmann. At current spot rates, the company said this implies reported net sales of at least CHF 3.44 billion (~$4.39 bn).

Gross profit margin is expected to reach at least 63.0 percent for 2026.

Adjusted EBITDA margin is expected to be in the range of 18.5 percent to 19.0 percent for the year ahead.

“It is important to recognize that this now factors in a significantly higher base following our Q4 results and therefore, represents a further elevation of our ambition,” he continued. “Reflecting the compounding strength of the own brand as we continue to grow at an exceptional rate. Our continued outperformance has fundamentally shifted our trajectory.”

The company is now implying a three-year constant currency CAGR from 2023 to 2026 of at least 30.5 percent.

“The opportunities ahead are compelling. Underpinned by the continued strength of demand we see across the entire business,” Hoffman concluded.

Image courtesy On Holding AG

See below for additional coverage of the company’s new automated factory in South Korea:

EXEC: On Holding Opens LightSpray Automated Factory in South Korea