Hoffmann stated that tariffs had no impact during the first half of the year, as On Holding held inventory primarily imported before the new tariffs took effect.
On Holding (ONON) CEO Martin Hoffmann, who is also the chief financial officer at the firm, told Stocktwits in an interview on Wednesday that the Swiss-based sportswear maker was “in a very good position to digest” the tariffs levied by the Trump administration on global trading partners. Hoffmann’s comments bear weight given the fact that Asian countries such as Vietnam, China, and Indonesia are major production hubs for most of the sportswear companies in the world, including Nike, Adidas, Lululemon, and On Holding.
Here’s what we learned from the ON Holding CEO about tariffs, store openings, and other developments:
Q: How has the tariff situation changed since the first quarter, given that extra tariffs have hit Vietnam and Indonesia to begin with, and how is the On Holding team trying to mitigate this?
We are not fans of more tariffs. But it’s also important to understand, and I think this sometimes gets lost in the conversation, our industry has always been exposed to tariffs.
We have been paying 20% duties into the U.S., and now this number, with the latest executive order, goes up to 40% for Vietnam and 39% for Indonesia. When we look at those numbers and this reality and assess our situation, then we actually feel, as a premium brand and as a fast-growing brand, we are in a very good position to digest it and to come up with multiple mitigation measures that are fully in line with our premium strategy that we have as a brand.
Q: Are there any near-term price increases on On Holding’s products to be anticipated, or was there a set of hikes that went into place during the second quarter?
The price increase we spoke about last time happened as of July 1, so they were not part of the numbers in the second quarter. With those price increases, we don’t need additional price increases this year to achieve the gross profit guidance that we updated and increased yesterday.
We still have economies of scale simply by growing, by creating, by building more volumes, driving more efficiencies. We can still reduce our freight costs quite a lot, because we simply get better with demand-supply planning. Yes, as a premium brand, we always have the opportunity to bring new product innovations to the market at a higher price point.
Q: What are the new product launches happening, and has the company tried near-shore manufacturing in the United States to mitigate the higher tariffs?
Currently, the setup of our production requires knowledgeable workers and infrastructure. That is available in Vietnam and Indonesia for the high-quality products that we are producing.
What I expect will happen in our industry is that we will see a drive toward a higher degree of automation, which, in the mid to long term, will then also allow the establishment of factories in other markets.
Q: Any new countries On Holding is expanding into, mainly in Europe and Asia?
Our expansion in Southeast Asia, I think, is primarily from a perspective of retail. So we have strong distributor partners in the region, but now we are starting to also explore retail spaces with them, and the Singapore store is the first example of that.
We will have our first store in Bangkok, also distributor-operated, coming soon, and if you look outside of Southeast Asia, together with the Tokyo Championship, we will open the second store in Tokyo, in Ginza.
We are planning our first two stores in Korea, which is another market where we just took in-house (company-operated stores) very recently. We will have our first store in Sweden, in Stockholm.
Q: Circling back to tariffs, what was the hit to the company’s earnings during the first half of 2025, and what would be an estimated impact for the latter half?
No impact on the first half because of the fact that our inventory sits behind customs, and so we had the inventory that was mainly imported before the new tariffs came into place.
For the second half, we are not sharing the detailed impact, because we feel, as we discussed in the past, there’s always some impact in gross profit. However, we increased the margin guidance, which also implies a strong gross profit margin of about 16% for the second half, and that shows it is well above our long-term goal.
Editor’s Note: The interview has been edited slightly for readability and grammar.<
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