ONON Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Sales: CHF 850 million, a 22% increase at constant currency (13.5% reported).

Gross Profit Margin: Over 65%, with a gross margin of 65.4%.

Adjusted EBITDA Margin: Close to 20%, with an adjusted EBITDA margin of 19.8%.

Direct-to-Consumer (DTC) Sales: CHF 388 million, up 34% at constant currency, representing 45.7% of total sales.

Wholesale Sales Growth: 12.7% at constant currency, but slower than DTC.

2Strategic Updates and Business Highlights

Leadership Transition: David Allemann and Frank Sluis have stepped into Co-CEO and CFO roles, respectively, emphasizing a founder-led approach.

Product Innovation: Continued focus on premium product development, including the launch of the Cloudboom Strike 2 and advancements in LightSpray technology.

Market Expansion: Strong growth in EMEA (20.5% at constant currency) and APAC (54.7% at constant currency), with notable performances in new stores and regions.

Cultural Relevance: Successful marketing campaigns, including collaborations with Zendaya, and a focus on storytelling to engage younger consumers.

Retail Performance: Flagship stores in Paris and Stockholm are performing exceptionally well, contributing to overall sales growth.

3Forward Guidance and Outlook

Full Year Sales Growth: Expected to grow in the low 20s at constant currency.

Gross Margin Outlook: Anticipated to be at least 65% for the full year.

Adjusted EBITDA Margin: Maintained guidance of 19.5% to 20%.

Innovation Pipeline: Upcoming product launches and store openings are expected to drive growth in the second half of the year.

4Bad News, Challenges, or Points of Concern

Wholesale Performance: Sell-through in the wholesale channel, particularly in the Americas, has been below expectations due to a highly promotional environment.

Inventory Management: Increased inventory levels (up 30%) attributed to volume growth and currency fluctuations, raising concerns about potential excess stock.

Market Competition: The athletic wear industry is experiencing a slowdown, raising questions about sustaining growth rates amidst broader market challenges.

5Notable Q&A Insights

Industry Growth Confidence: David Allemann expressed confidence in On's growth trajectory, citing strong DTC performance and a shift towards fitness and wellness as key drivers.

Pricing Strategy: The company plans to expand its pricing range to capture higher-end market segments while maintaining premium positioning.

Wholesale Strategy: Actions taken to limit sell-in in the wholesale channel are intended to protect brand integrity and ensure healthy inventory levels, with expectations of improved sell-through in Q3.

Regional Performance Divergence: EMEA is outperforming the Americas, attributed to previous strategic decisions to prune less premium channels, which are now yielding positive results. Overall, On Holding AG reported a strong Q2 2026 performance with significant growth in DTC sales and profitability, while facing challenges in the wholesale segment and broader market conditions. The company's focus on innovation and premium brand positioning remains central to its strategy moving forward.