On Holding AG (ONON) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The company's earnings call reveals robust financial performance, with strong growth across regions and product lines, particularly in APAC and apparel. Positive guidance revisions and strategic investments in marketing and innovation bolster future prospects. Analysts seem satisfied with management's responses, indicating confidence. The improved gross margin and increased sales forecasts, along with a focus on premium positioning, suggest a strong positive sentiment. Despite the absence of market cap data, the comprehensive positive outlook and strategic direction suggest a strong positive stock price movement.
Key Financial Performance
Net Sales CHF 794.4 million, growing 24.9% year-over-year on a reported basis and 34.5% at constant currency. Growth attributed to premium strategy, operational excellence, and global brand momentum.
Gross Profit Margin 65.7%, up 510 basis points year-over-year. Increase due to premium positioning, operational efficiencies, economies of scale, and temporary factors like lower freight costs and currency devaluation.
Adjusted EBITDA Margin 22.6%, up 370 basis points year-over-year. Growth driven by operational efficiencies and premium positioning, despite increased marketing and retail investments.
DTC Channel Net Sales CHF 314.7 million, an increase of 27.6% year-over-year on a reported basis and 37.5% at constant currency. Growth driven by synergies between e-commerce and retail ecosystems.
Wholesale Channel Net Sales CHF 479.6 million, increasing by 23.3% year-over-year on a reported basis and 32.5% at constant currency. Growth reflects sustained demand from key account partners.
Americas Net Sales CHF 436.2 million, growing 10.3% year-over-year on a reported basis and 21% at constant currency. Growth driven by strong demand despite U.S. price increases.
EMEA Net Sales CHF 213.3 million, up 28.6% year-over-year on a reported basis and 33% at constant currency. Growth attributed to strong demand in the U.K., France, Italy, and reacceleration in German-speaking regions.
APAC Net Sales CHF 144.9 million, up 94.2% year-over-year on a reported basis and 109.2% at constant currency. Growth driven by triple-digit growth in Greater China, South Korea, and Southeast Asia.
Footwear Net Sales CHF 731.3 million, an increase of 21.1% year-over-year on a reported basis and 30.4% at constant currency. Growth driven by performance and lifestyle products.
Apparel Net Sales CHF 50.1 million, an increase of 86.9% year-over-year on a reported basis and 100.2% at constant currency. Growth driven by global and multichannel expansion.
Operating Cash Flow CHF 157.3 million. Growth attributed to disciplined working capital management and strong operational performance.
Cash Balance CHF 961.8 million. Increase due to strong operational performance and cash flow generation.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Cloudsurfer Max: Launched in summer 2025, ranked among the top 5 selling models with key run specialty partners in its first month.
Cloudrunner 3 and Cloudmonster 3: Strong order book for launch in Q1 2026.
Cloudrunner Max: Set to launch in Fall/Winter 2026 with significant engineering and foam innovations.
LightSpray Cloudmonster Hyper: Championship-level technology to be introduced to everyday runners in Spring/Summer 2026.
Cloudzone Moon: Collaboration with Zendaya blending design innovation with expressive style.
Cloudsolo: First co-created product with LOEWE launched in Q4 2025.
Asia Pacific Growth: Fastest-growing region with fourth consecutive quarter of triple-digit constant currency growth. APAC now accounts for nearly 20% of total sales.
New Store Openings: Opened flagship stores in Tokyo, Palo Alto, Zurich, Riyadh, and Seoul, with record demand in Ginza and Bangkok.
Americas: Net sales reached CHF 436.2 million, growing 10.3% year-over-year on a reported basis and 21% at constant currency.
Europe, Middle East, and Africa: Net sales reached CHF 213.3 million, up 28.6% year-over-year on a reported basis and 33% at constant currency.
Operational Efficiencies: Reduced lead times, enhanced planning with intelligent tools, and increased use of AI across operations.
Gross Profit Margin: Achieved 65.7%, up 510 basis points year-over-year, driven by structural efficiencies and premium positioning.
Adjusted EBITDA Margin: Achieved 22.6%, up 370 basis points year-over-year.
Premium Strategy: Focused on maintaining premium positioning, full-price sales, and expanding brand awareness globally.
Apparel Growth: Net sales reached CHF 50.1 million, growing 86.9% year-over-year, with over 1 million apparel units sold in a single quarter.
AI Integration: Increasing use of AI in operations and customer engagement to enhance efficiency and connection.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Market Conditions: The company faces potential risks from fluctuating foreign exchange rates, as highlighted by the impact of the U.S. dollar devaluation against the Swiss franc. This could affect profitability and financial performance.
Regulatory Hurdles: The company is exposed to risks from U.S. tariffs, which have a direct impact on gross profit margins. The full impact of these tariffs is expected to be felt in the next fiscal year.
Supply Chain Disruptions: While not explicitly mentioned, the company's focus on operational efficiencies and reduced lead times suggests a potential risk of supply chain disruptions that could impact product availability and delivery timelines.
Economic Uncertainties: The company’s premium pricing strategy, particularly in the U.S., could face challenges if economic conditions deteriorate, potentially affecting consumer demand for high-priced products.
Strategic Execution Risks: The company’s aggressive expansion into new markets, such as Asia Pacific and the GCC region, and its reliance on flagship stores for brand positioning, could pose risks if these investments do not yield the expected returns.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Growth: The company has raised its 2025 guidance, expecting constant currency net sales to grow by 34% year-over-year, surpassing the previous guidance of at least 31%. This implies reported net sales of CHF 2.98 billion at current spot rates.
Gross Profit Margin: The gross profit margin is now expected to be around 62.5%, an increase from the previous guidance of 60.5% to 61%. This reflects structural efficiencies, premium positioning, economies of scale, and favorable FX, tariffs, and freight cost environments.
Adjusted EBITDA Margin: The adjusted EBITDA margin forecast has been raised to above 18%, up from the previous guidance of 17% to 17.5%. This increase is attributed to exceptional gross profit generation, strategic investments, and the ability to absorb FX headwinds.
Long-Term Revenue Growth: The company has updated its long-term outlook, now expecting a 3-year constant currency CAGR from 2023 to 2026 of at least 30%, implying at least 23% growth in 2026 based on the current 2025 outlook.
Product Pipeline and Innovation: The company plans to launch new products in 2026, including the Cloudrunner 3, Cloudmonster 3, Cloudrunner Max, and LightSpray Cloudmonster Hyper. These innovations are expected to drive growth and redefine the running category.
Regional Growth: Asia Pacific is highlighted as a major growth engine, with the region approaching 20% of total sales and continued triple-digit growth in Greater China, South Korea, and Southeast Asia.
Apparel Growth: The apparel category is rapidly growing, with net sales increasing by 86.9% year-over-year and over 1 million apparel units sold in a single quarter for the first time. This category is becoming a significant standalone growth pillar.
Operational Efficiency: The company has structurally reduced lead times, enhanced planning with intelligent tools, and integrated AI into operations, contributing to faster and more agile business processes.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you talk about the traction in apparel, including regional acceptance, DTC vs. wholesale performance, and the percentage of wholesale doors carrying apparel?
A:The company sold over 1 million apparel items in Q3, with apparel and accessories accounting for 8% of total business. Strong traction is driven by showcasing products in flagship stores and shop-in-shops. Running, training, and tennis apparel are performing well, with innovations resonating with affluent customers. The apparel business is D2C-heavy, contributing to superior margins.
Q:How do you balance top-line growth, margin protection, and maintaining a premium position while avoiding operational issues?
A:The company focuses on building a premium business with disciplined inventory management, pricing power, and a D2C-focused channel mix. Operational improvements and economies of scale have led to sustainable gross profit margin expansion. The company is reinvesting in the brand, technology, and products while maintaining control over pricing and operations.
Q:Was the 2026 initial guidance of 23% growth a constant currency number, and how is confidence built by region and channel?
A:Yes, the 23% growth is a constant currency number. The company aims to increase brand awareness and target specific communities. Strategies include product innovation, retail expansion, and leveraging brand ambassadors. Growth is expected across all regions, with a focus on premium positioning and expanding the addressable market.
Q:What are the tailwinds and headwinds for gross margin in Q4 and the long-term outlook for product costing?
A:Q3 gross margin improvements are attributed to the business model's strength, sustainable pricing, and operational efficiencies. Q4 is expected to see margin upside, with prudence applied. Long-term, the company benefits from favorable FX and freight environments, offsetting tariff impacts. Structural business improvements have elevated gross margins above targets.
Q:How does the company plan to manage U.S. growth while maintaining a premium strategy?
A:The company is disciplined in U.S. growth, avoiding unnecessary wholesale expansion and discounting. Price increases have been well-received, and brand awareness is growing among affluent demographics. The company remains committed to a full-price strategy, even during competitive holiday seasons.
Q:What is the composition of growth in APAC, and what are the considerations behind Q4 guidance?
A:In APAC, growth is driven by strong same-store sales and disciplined retail expansion. Q4 guidance reflects a focus on full-price sales and brand building. The company has seen strong momentum in October and November, with significant growth in Tmall traffic and apparel sales during China's Singles' Day.
Q:How should we think about the progression of EBITDA margin longer term?
A:The company prioritizes investing in brand building, capabilities, and technology while driving year-over-year profitability. Q3 sales exceeded expectations, leading to high profitability. The company plans to continue this approach, balancing investments with profitability improvements.
Q:What is the opportunity with younger consumers, and what is the go-to-market strategy?
A:The company has gained traction with younger consumers through collaborations with Zendaya and Burna Boy. The kids' line is performing well, appealing to both parents and teens. The brand's presence among affluent high school students is growing, contributing to strong lifetime value.
Q:Review of Unclear Management Responses
A:No questions were identified where management avoided giving a direct answer or lacked clarity in their responses.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Alto Zurich
Athletics championship
Caspar Martin
Caspar welcome
Champions course
City Marathon
Cloudboom win
Cloudmonster Hyper
Cloudmonster launching
Cloudrunner Cloudmonster
Cloudrunner engine
Cloudsurfer spring
Cloudzone Moon
Consumers brand
Ginza store
Hyper process
LightSpray Cloudmonster
LightSpray category
LightSpray product
Marathon field
Martin highlight
World
action
athlete
competition
franchise Cloudsurfer
heat
lifestyle
model
record
sport
spring summer
stage
style
track field
ONON Transcript
On Holding AG (ONON) Q1 2026 Earnings Call Transcript
Positive5-12
The earnings call summary reveals strong financial performance with significant growth in net sales across regions and categories. The Q&A section confirms management's optimistic outlook, with emphasis on premium brand strategy and innovation. Despite uncertainties, the company's growth trajectory and commitment to maintaining strong margins and brand awareness are evident. The lack of unclear responses and the focus on strategic expansion suggest a positive sentiment, likely resulting in a stock price increase of 2% to 8% over the next two weeks.
On Holding AG (ONON) Q4 2025 Earnings Call Transcript
Positive3-3
The earnings call highlights strong financial performance, with raised guidance and impressive growth in key segments like apparel and accessories. The Q&A session revealed optimism about future growth, particularly in North America and Asia Pacific, and strong D2C performance. The company is well-positioned with a robust product pipeline and strategic focus on premium brand positioning. Despite some unclear responses, the overall sentiment is positive, suggesting a stock price increase.
On Holding AG (ONON) Presents at ICR Conference 2026 Transcript
Neutral1-12
On Holding AG (ONON) Q3 2025 Earnings Call Transcript
Positive11-12
The company's earnings call reveals robust financial performance, with strong growth across regions and product lines, particularly in APAC and apparel. Positive guidance revisions and strategic investments in marketing and innovation bolster future prospects. Analysts seem satisfied with management's responses, indicating confidence. The improved gross margin and increased sales forecasts, along with a focus on premium positioning, suggest a strong positive sentiment. Despite the absence of market cap data, the comprehensive positive outlook and strategic direction suggest a strong positive stock price movement.
ONON Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
