On Holding AG appeared to disappoint investors by not raising revenue guidance for the year, but otherwise reported another gangbuster performance in the first quarter, with sales and earnings handily topping analysts’ expectations with the help of the brand’s expanding appeal to younger audiences. “The year is off to an extremely strong start,” said Founder and Co-CEO Caspar Coppetti on an analyst call.

He added, “At the same time, On’s disciplined focus on premium execution delivered exceptionally strong gross profit and adjusted EBITDA margins, a clear reaffirmation of our premium strategy. Demand is incredibly broad-based. Our strategy is resonating across regions, categories and channels, reaching more fans than ever before.”

On reported revenue of $1.07 billion, compared to Wall Street’s expectations of $1.06 billion. Adjusted earnings per share came in at 40 cents, higher than the 35 cents Street forecast. Shares of On slid 20 cents to $33.84 on the day.

Net sales increased 14.5 percent year-over-year (y/y), or by 26.4 percent on a constant-currency (cc) basis, to CHF 831.9 million, exceeding the CHF 800 million mark for the first time in a quarter.

Highlights of the quarter include strong constant currency double-digit growth in the Americas, in EMEA and in APAC.; as well as well over 50 percent constant currency growth in apparel globally. Said Coppetti, “As our business becomes more global and more multidimensional, our vision to be the most premium global poster brand is only becoming clear we are even more committed to continuing to chart our own course.”

He said On’s brand tracker showed a “sharp increase” in awareness with runners, especially in the U.S. In Q1, On grew nearly 30 percent with run specialty accounts in Europe. Coppetti said, “At the same time, we continue to win new customers in everyday running through our closer relationships with leading sports retailers in markets, including the U.S., Japan and Europe. Running is where we continue to prove the power of our innovation and our great product with authentic communities. And it continues to open doors far beyond running, creating deep engagement, growing our relationship with the movement class.”

He also said On is continuing to see “exceptional momentum” in lifestyle, helping the brand reach younger consumers. Coppetti said, “Products like Cloudtilt are designed for sneaker tastes with the comfort, design language and premium feel that young consumers are looking for. The proof is in the numbers. In Q1, Cloudtilt and Cloudtilt Remix saw exceptional growth in all regions with Cloudtilt becoming the #1 salad foot Locker in Europe by wide margin in March. Additionally, partnerships with leaders in the sneaker space are helping us acquire new young consumers at attractive margin profiles while continuing to enhance our premium positioning.”

He said the Cloudswift relaunch and female-focused, head-to-toe silhouette launch with actress Zendaya are particularly holding appeal with younger audiences. Said Coppetti, “In Q1, 18- to 24-year-olds significantly increased their share of our DTC customer base, the largest increase we have seen since our data began, and this trend has accelerated into early Q2. Our Q1 brand tracker also showed strong progress in both performance and style cues.”

Among other categories, he said tennis “continues to deliver outstanding results in footwear” while  training “is also bringing thousands of new customers to the brand every quarter.” He added that the strengthening demand across wider groups is bolstering On’s margin profile. Coppetti said, “In an increasingly promotional market, we are even more committed to our full price strategy. We are reaching new consumers, but we’re doing it with quality and discipline.”

Channels

DTC channel net sales increased 16.4 percent (+28.7 percent cc) y/y to CHF 322.3 million.

“Within direct-to-consumer, our own stores continue to elevate the physical brand experience for our fans in key cities around the world. This allows us to deepen our brand presence in existing markets as well as to accelerate our growth in markets with fewer potential wholesale partners,” said outgoing CEO and CFO Martin Hoffmann on the call. “We now have a growing number of stores in the second and third years of operations, including Miami, Milan and our first store in Tokyo. And we are thrilled to see continued meaningful same-store growth and improvement of key retail metrics across this group and beyond. This is an important signal as we continue to scale retail.”

Upcoming store openings include locations in Stockholm, São Paulo, and Sydney.

Wholesale channel net sales increased 13.3 percent (+25.1 percent cc) y/y to CHF 509.6 million. Said Hoffmann of wholesale, “We continue to see great momentum with our global key accounts, including Dick’s Sporting Goods, Foot Locker and JD Sports. Even with these major partners, we are only present in around 50 percent of doors, giving us a meaningful multiyear runway for further openings while preserving the controlled nature of our expansion and premium quality of our distribution.”

Regions

The Americas region net sales increased 3.1 percent due to “significant” foreign-currency headwinds while gaining 17.1 percent cc y/y to CHF 450.7 million, a new quarterly record.

Hoffman said of the Americas’ performance, “We are pleased with the continued increase in awareness and our maintained commitment to premium execution and full price sales. Overall awareness crossed the 30 percent  mark for the first time, an important milestone. Our latest campaign with Zendaya, an outreach to younger and more lifestyle-oriented consumer, has already generated over 20 million highly engaged views in the U.S. alone. Together, these prove our continued diversification of our customer base, setting the brand up for long-term success.”

Europe, Middle East and Africa (EMEA) region net sales increased 22.8 percent (+25.6 percent cc) y/y to CHF 207.1 million.

Hoffman said this marked the sixth consecutive quarter of more than 25 percent cc-growth in the region with the gains again broad-based. He said, “The U.K., a market with a strong taste-making sneaker community as well as engaged runner base, showed strong momentum. Germany continued to sustain very healthy growth. The regional performance is even more impressive considering the current geopolitical situation in the Middle East, further evidence of the broad-based success and resilience of the region.”

Asia-Pacific region net sales grew 44.4 percent (+61.4 percent cc) y/y to CHF 174.0 million. The region now represents more than 20 percent of global net sales, with growth remaining balanced across subregions and channels. Hoffman elaborated, “Greater China grew well above the regional average. In addition, I would particularly like to highlight South Korea, where net sales more than tripled year-over-year. We grow our markets with conviction. After opening 2 mall-based stores in Seoul in Q4 last year, we opened our first stand-alone location in Hannam, one of the cities sought after and affluent shopping districts for consumers in their 20s and 30s. The store is already driving strong results, performing significantly ahead of expectations.”

Categories

Shoes net sales increased by 12.2 percent (+24.0 percent cc) y/y to CHF 763.7 million.

Hoffman said, “We are very happy to see the majority of growth continue to come from our blockbuster franchises while adding meaningful volumes from newer franchises. The Cloudzone, for example, which launched in early 2025, grew by over 350% in volume from a low base. Performance running maintained excellent momentum, with a strong contribution from the Cloudmonster franchise. The positive feedback on Cloudmonster 3 and Cloudmonster Hybrid is evident in the financial performance, and we look forward to both gaining further momentum in Q2 and beyond. Outside of performance running, the Cloudtilt Remix further elevated the already exceptional performance of the Cloudtilt franchise, strengthening our position in a lifestyle context.”

Apparel net sales grew 45.1 percent (+57.5 percent cc) y/y to CHF 55.3 million. Hoffman said apparel continues to be an “increasingly important entry point into the brand.” with On seeing sequential quarterly improvements in cross-category purchase rates and time to repeat purchase. He said, “Growth was particularly strong in direct-to-consumer, with apparel contributing more than 10 percent of our D2C sales for the first time, proof that apparel is one great example for a new driver of growth.”

Accessories sales surged 70.7 percent (+86.6 percent cc) y/y to CHF 12.9 million.

Profitability
On said it delivered record Q1 profitability, reflecting the desirability of its products, full-price discipline and strong operational execution,

Gross profit margin was 64.2 percent for the quarter, up 430 basis points y/y, which came despite “meaningful headwinds” from higher U.S. tariffs. Hoffman said, “Despite significant investments into performance of our products, our ASP strength combined with new levels of operational excellence allowed us to deliver a further step change in gross profit margin despite the increasing headwind from higher U.S. tariffs.”

Net income increased 82.2 percent y/y to CHF 103.3 million, or 12.4 percent of net sales, in Q1, compared to CHF 56.7 million, or 7.8 percent of net sales, in Q1 2025.

Diluted EPS Class A (CHF) increased to CHF 0.31 in the first quarter from CHF 0.17 in the year-ago quarter.

Adjusted EBITDA margin reached 21.0 percent of net sales, up from 16.5 percent in the prior-year quarter, as the company said it again translates gross profit margin expansion and efficiency gains into higher profitability, while continuing to invest behind its largest long-term growth opportunities.

Adjusted EBITDA increased 45.4 percent to CHF 174.3 million in Q1 from CHF 119.9 million in Q1 2025.

Net Working Capital

Outlook
Following a strong start to 2026, On Holding said it looks to the remainder of the year with high confidence. Brand momentum continues to build across markets, channels and communities, while the company’s premium positioning, disciplined execution and strong innovation pipeline support high-quality, margin-accretive growth.

“Despite ongoing macroeconomic uncertainty, On’s first quarter performance provides a strong foundation for the year,” the company said in its earnings release.

For the full year:

  • Net sales are expected to grow by at least 23 percent y/y on a constant-currency basis. At current spot rates, this implies reported net sales of at least CHF 3.51 billion.
  • Gross profit margin is expected to reach at least 64.5 percent of net sales. This raised guidance is said to reflect On’s operational strength and its ongoing premium execution, and continues to embed a 20 percent incremental tariff rate on products imported to the U.S. from Vietnam. It excludes any potential tariff refunds.
  • Adjusted EBITDA margin is expected to be in the range of 19.5 percent to 20.0 percent of net sales. This reportedly reflects the company’s continued commitment to invest behind the highest-return areas for long-term growth while delivering profitability expansion.

Other than with respect to IFRS net sales and gross profit margin, On only provides guidance on a non-IFRS basis.

Image courtesy On Holding AG