The company expects fiscal 2025 net sales to be up at least 31% year-over-year on a constant currency basis, compared with the prior forecast of up at least 28%.
Roger Federer-backed On Holding (ONON) raised its annual forecasts after beating Wall Street estimates for second-quarter sales on Tuesday, as efforts to drive demand for its footwear through marketing initiatives with the likes of Actor Zendaya helped direct-to-consumer channel growth.
On Holding expects fiscal 2025 net sales to be up at least 31% year-over-year on a constant currency basis, compared with the prior forecast of up at least 28%. The company said that at current spot rates, this corresponds to reported net sales of at least CHF 2.91 billion ($3.60 billion), compared to the previous expectation of CHF 2.86 billion.
The second-quarter sales came in at CHF 749.2 million, compared with analysts’ estimates of CHF 704.1 million, according to data compiled by Fiscal AI. The company posted an adjusted loss of CHF 0.09 per share, compared with estimates of profit of CHF 0.21.
Retail sentiment on the stock remained unchanged in the ‘extremely bullish’ territory, with chatter at ‘extremely high’ levels, according to data from Stocktwits.
Shares of On Holding were down nearly 2% at the time of writing before the bell on Tuesday. The stock has lost over 16% of its value so far this year.
On Holding said the substantial increase in direct-to-consumer channel share and favorable foreign exchange developments helped the sportswear maker post a gross profit margin of 61.5% in the second quarter, up from 59.9% in the prior year period.
The company has recently launched products in the running, tennis, and trail categories at full-price points to keep its premium position. On Holding and Deckers Outdoor’s (DECK) Hoka has been gaining market share in the running category, giving tough competition to sportswear giant Nike (NKE).
Last quarter, On Holding had noted that it remains cautious looking into the second half of the year in light of the macroeconomic uncertainties and the recent global trade policy shifts, which have introduced higher levels of planning uncertainty.
Heading into second-quarter results, analysts had noted that an increase in tariffs on U.S. imports from Vietnam and Indonesia is an incremental headwind for the second half of 2025. Vietnam accounts for 90% of On Holding’s footwear imports, while Indonesia accounts for 10%.
The firm also forecast adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin for fiscal 2025 to be in the range of 17% to 17.5%, compared with previously estimated 16.5% and 17.5%.
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