At On Holding AG, consumers have flocked to its trainers and latest workout apparel line because the Swiss sneaker maker looks to compete with established players like Adidas AG and Nike Inc.
The Roger Federer-backed company said on Tuesday that second-quarter revenue rose 28% year-on-year to 567.7 million Swiss francs ($654.5 million) at constant exchange rates, barely above analysts’ estimates.
“We view the second quarter 2024 results as better than expected and an indication of strong demand for the brand,” Cristina Fernandez, analyst at Telsey Advisory Group, wrote in a note.
On shares rose as much as 7.5 percent in early New York trading, bringing its gain this yr to around 50 percent and overtaking rivals similar to Nike, Adidas and Puma SE.
Founded in 2010, On is a relative newcomer to the sports world, with its quarterly results often causing share price fluctuations. Thanks to strong demand from wholesale partners and specialty running stores, the corporate has been capable of expand rapidly in Europe and North America in recent times.
The company is now increasingly selling its products on to consumers and is attempting to evolve from a precocious upstart into a longtime player that may proceed to poach customers from its competitors.
The Zurich-based company reiterated its full-year forecast of accelerating sales by no less than 30% and achieving a gross profit margin of around 60%. To achieve this goal, the corporate might want to speed up sales and profit growth within the second half of the yr.
Gross profit margin reached 59.9% within the second quarter, slightly below analysts’ estimates.
Sportswear line
The company said it plans to realize momentum in the approaching months by increasing automation of its U.S. warehouses as a part of its broader efforts to expand its distribution capabilities in North America, its largest market.
On continued its expansion within the Americas, where sales rose by around 25 percent, it said on Tuesday. In the Europe, Middle East and Africa region, revenue rose by around 22 percent and in Asia-Pacific, the group’s smallest region, by 74 percent.
The company is increasingly marketing high-end Sportswear These include climbing T-shirts, which sell for $80, and trekking jackets, which herald $290. Although still small, this business grew by 63 percent within the quarter.
On continues to generate nearly all of its revenue from footwear, thanks partly to latest products similar to the $150 Cloudrunner 2 and the 160 dollars Cloud inclinationwhat it’s marketing with singer and actress Zendaya, a brand new brand ambassador.
The company hopes that Zendaya and FKA branchesone other ambassador, will help construct credibility with younger customers. The company also desires to capitalize on the Paris Olympics, where six of its sponsored athletes took home medals, including bronze for tennis star Iga SwiÄ…tek and the Boston and New York Marathon winner Hellen Obiri.
“We have noticed a significant increase in brand awareness,” said co-managing director Martin Hoffmann in an interview, pointing, amongst other things, to record visitor numbers on the corporate’s website. “This should benefit On in the long term and lay the foundation for achieving our goals.”
