Sneaker Brand On Disappoints Investors With Sales Outlook
(Bloomberg) — On Holding AG kept its sales outlook unchanged, disappointing investors even after a robust first quarter that saw consumers snap up the Swiss brand’s apparel and new sneakers including the $170 Cloudtilt Remix.
The Roger Federer-backed company still expects full-year sales growth of at least 23% on a constant currency basis, On said Tuesday, which would be slightly shy of analyst estimates. That was despite reporting better-than-expected sales in the first quarter, while the company also raised its profit outlook.
Shares in On fell as much as 7.4% in premarket trading, reversing an earlier surge after the results were published. The stock was down 27% this year through Monday’s close, amid investor concerns about trade friction and uncertainty over whether a decades-long sneaker boom will continue.
Global equities fell more broadly as traders wait for US inflation data, with the impasse between the US and Iran also weighing on sentiment. On rival Under Armour Inc.’s shares plunged on weak sales guidance.
On is grappling with investor concerns even as it continues to grow rapidly with its high-end, high-priced running footwear and expansion into areas like tennis, outdoors, training and apparel. Since it was founded in 2010, On has grabbed market share from the likes of Nike Inc. and Puma SE and is currently well ahead of the three-year sales and profitability targets it set in 2023.
Still, investors had expected On to nudge its sales forecast higher, Citi analyst Paul Lejuez said in a note. Some may be disappointed about the first-quarter sales growth in the Americas and Asia, and attention will turn to the trajectory for On’s revenue for the remainder of the year and beyond, he said.
On plans to update investors on its strategy in September, Caspar Coppetti, co-founder and co-chief executive officer, said in an interview.
Coppetti and fellow co-founder David Allemann have resumed operational control of the company, taking over as co-CEOs this month. The duo founded On with former professional athlete Olivier Bernhard and are focused on maintaining its fast growth, particularly in Asia.
First-quarter sales rose 26% on a constant currency basis to 832 million Swiss francs ($1.1 billion), more than analysts expected, while measures of profitability also surpassed estimates. Revenue grew 17% in the Americas, 61% in Asia-Pacific and 26% in Europe, the Middle East and Africa.
Younger Customers
The Cloudtilt Remix model, a lifestyle sneaker that is part of On’s efforts to target younger consumers, became the brand’s best-performing style in March at Foot Locker Europe, Coppetti said.
While sneakers still make up the vast majority of On’s revenue, the apparel business posted 58% growth in constant currency terms in the first quarter.
On now expects an adjusted earnings before interest, taxes, depreciation and amortization margin of between 19.5% and 20% this year, higher than analyst estimates. It also lifted its gross profit margin forecast to at least 64.5%, also ahead of analyst expectations.
The forecast continues to embed a 20% incremental tariff rate on products imported to the US from Vietnam. While On has applied for refunds related to the US tariffs, it’s not factoring that potential money into its forecast.
On has reached a point where it can now benefit from forging more advantageous arrangements with suppliers and shippers while improving the internal planning that goes into matching supply and demand, Coppetti said.
“We’re now able to really reap the economies of scale in operations and the supply chain,” he said.
It is also making progress on scaling up production of its robot-produced LightSpray footwear. This year it opened a 32-robot factory in South Korea, and Coppetti said demand was outstripping supply for the limited quantities of shoes produced there, including the $280 LightSpray Cloudmonster 3 Hyper model.
“Every time we drop something, it immediately evaporates,” he said. “They’re making probably a thousand pairs a day on average to meet the demand.”
–With assistance from Subrat Patnaik.
(Updates with premarket shares in third paragraph.)
©2026 Bloomberg L.P.
