Swiss sneaker company On Holding is riding high. The group, backed by retired Swiss tennis player Roger Federer, raised its sales and profit forecasts for the year after a better-than-expected third quarter, which saw consumers in Europe and Asia snap up the Swiss trainer maker’s expensive footwear.
Shares rose as much as 11% in premarket trading in New York. They have slumped 36% at Tuesday’s close this year, underperforming some of their rivals, as the tariff dispute between the United States and Switzerland has also weighed on shares.
The company, of which the former Swiss tennis player – who according to Forbes has assets of over 1 billion euros – holds a minority share, now expects revenue growth of 34% this year, without taking into account exchange rates, higher than analysts’ estimates and three percentage points more than his previous target. This new target translates into net sales of 2.98 billion Swiss francs ($3.7 billion) at current exchange rates, the company reported Wednesday.
Zurich-based On has become one of the best-performing companies in the world of running shoes, expanding from its core running shoes into other industries such as tennis, training and sportswear. The brand has grown rapidly since its founding in 2010, gaining market share from major companies such as American Nike and German Puma.
The Swiss group expects its gross profit margin to reach 62.5%, up from the previous range of 60.5% to 61%, even as US trade tariffs weigh on the sneaker industry. On cited better-than-expected growth for both its expanding network of company-owned stores and its wholesale business.
The optimistic outlook contrasts with widespread investor caution towards the sportswear sector, driven by fears of inflationary pressures as US President Donald Trump’s policies increase trade frictions and growth concerns.
Strong demand
On averages the most expensive running shoes in the industry and began raising prices in the U.S. in July. Those price increases were “completely digested” and had no effect on demand for the products, CEO Martin Hoffmann said in an interview.
On is poised to exceed its medium-term sales and profit targets for the second year in a row. Hoffmann said he is increasingly confident that On will exceed three-year targets set in October 2023 and sees room for expansion after that date.
“This company is not willing to run what we have, they are willing to grow,” he said. Third-quarter sales rose more than analysts expected, reaching 794 million Swiss francs, up 35% from a year ago in constant currency terms.
Revenue rose 33% in Europe, the Middle East and Africa and 109% in the Asia-Pacific region, above estimates. In the Americas, growth of around 21% was slightly lower than expected.
While the United States remains On’s largest market, the company is more selective about how to generate growth there, Hoffmann said. On is only present in about 40% of the most popular shopping destinations, such as Dick’s Sporting Goods and Foot Locker, he said. “We are totally focused on building our brand in a premium way, which means being very selective with who we work with,” he said.
