Federer-Backed On’s Full-Year Sales Forecast Disappoints
(Bloomberg) — On Holding AG’s forecast for sales this year disappointed investors looking for faster growth from the sneaker maker backed by tennis great Roger Federer.
The US-listed company’s shares fell 12% in pre-market trading after On predicted sales will rise at least 23% this year on a constant currency basis, below the estimate of analysts in a Bloomberg survey.
Founded in 2010, the fast-growing brand has been taking market share from the likes of Nike Inc. and Puma SE with its high-end footwear and an expansion from running into areas like tennis, outdoors and apparel. On is on track to surpass its three-year sales and profitability targets set in 2023.
Still, On has struggled to win over investors of late, with its stock down slightly over the past year through Monday’s close. The industry has been out of favor amid rising geopolitical and trade friction and questions about how much momentum the decades-long sneaker boom has left.
The company expects revenue of at least 3.44 billion Swiss francs ($4.4 billion) in 2026 at current exchange rates, according to a statement Tuesday. That guidance also fell short of analysts’ estimates, while On’s projected gross profit margin for 2026 exceeded consensus expectations.
On’s ambition is to become the “most premium global sportswear brand,” and it sells some of the industry’s priciest products.
The approach “allows us to chart our own path, to create our own market, instead of fishing in the same pond like everyone else,” Chief Executive Officer Martin Hoffmann said in an interview. “Really sports is the new fashion and movement is the new luxury.”
On’s fourth-quarter sales of 744 million francs and its gross margin of 63.9% beat analysts’ estimates.
On is seeking to shake up the sector’s approach to manufacturing with a new 32-robot sneaker factory in South Korea. The site can churn out thousands of pairs of sneakers a day. It complements On’s existing four-robot facility that’s been making the upper parts of sneakers at its Zurich headquarters since last year.
While sneakers still make up the vast majority of On’s revenue, the brand’s apparel business posted 76% growth in constant currency terms last year. Momentum has been particularly strong with running products and On is now looking to bring out more collections catering to women in fitness studios, Hoffmann said.
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