ONON — On Holding AG

ONON Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Net Sales: CHF 831.9 million, a record for Q1, representing a 26.4% increase at constant currency (14.5% reported).
• Gross Profit Margin: Reached 64.2%, up from 59.9% year-over-year.
• Adjusted EBITDA Margin: 21%, an increase of 450 basis points year-on-year, marking the second-highest margin in company history.
• Direct-to-Consumer (DTC) Sales: CHF 322.3 million, growing 28.7% year-on-year at constant currency.
• Wholesale Sales: Exceeded CHF 500 million for the first time, reaching CHF 509.6 million, a growth of 25.1% at constant currency.
• Apparel Sales: CHF 55.3 million, up 57.5% at constant currency.

2. Strategic Updates and Business Highlights

• Innovation: Significant advancements in product technology, including the LightSpray factory in South Korea and the launch of the Cloudmonster 3, which received positive consumer feedback.
• Market Expansion: Strong growth in Asia Pacific (61.4% at constant currency) and continued success in established markets like North America and Europe.
• Brand Awareness: Increased awareness in the U.S. crossed the 30% mark for the first time, indicating successful outreach to younger demographics through campaigns featuring Zendaya.
• Leadership Transition: Martin Hoffmann is stepping down as CEO and CFO, with Caspar Coppetti and David Allemann continuing as co-CEOs. Frank Sluis has joined as the new CFO.

3. Forward Guidance and Outlook

• Sales Growth Guidance: Maintained constant currency net sales growth guidance of at least 23% for 2026, translating to CHF 3.5 billion in reported sales.
• Gross Margin Expectation: Projected to be at least 64.5% for the full year, despite anticipated tariff impacts.
• Adjusted EBITDA Margin: Expected to be in the range of 19.5% to 20%, above prior guidance.

4. Bad News, Challenges, or Points of Concern

• Geopolitical and Economic Risks: The macroeconomic environment remains unpredictable, which could impact growth.
• Promotional Landscape: Increased competition and promotional activities in the market could pressure margins and brand positioning.
• Leadership Change: Transition in leadership may introduce uncertainties regarding strategic continuity and execution.

5. Notable Q&A Insights

• Management Responsibilities: Caspar and David emphasized continuity in leadership and strategy, with a clear division of responsibilities to maintain focus on premium positioning.
• U.S. Market Demand: Positive trends in the U.S. market were highlighted, with a focus on expanding DTC channels and reaching younger consumers.
• Marketing Investments: Increased marketing expenses are expected to drive brand awareness and customer acquisition, with a focus on maintaining premium pricing.
• Growth Cadence: The company anticipates a slight slowdown in growth rates in the second half of the year, primarily due to inventory management and upcoming product launches.

This summary encapsulates the key aspects of the Q1 2026 earnings call for ONON, highlighting both the successes and challenges faced by the company as it navigates its growth trajectory.