On Holding (ONON) Stock Hits Record Quarter — So Why Is It Falling?

TLDR

• On Holding beat Q1 earnings expectations with revenue of 831.9 million Swiss francs, up 14.5% year-over-year
• EPS came in at 0.37 francs adjusted vs. 0.27 francs expected
• The company raised its full-year gross profit margin outlook to at least 64.5%, up from 63%
• Asia-Pacific was the fastest-growing region, with net sales up 44.4%; China posted high-double-digit growth
• Co-founders David Allemann and Caspar Coppetti took over as co-CEOs, replacing Martin Hoffmann

On Holding beat Wall Street’s first-quarter expectations on both revenue and earnings, pushing its full-year profit outlook higher. But the stock gave back an early premarket gain of more than 6%, with ONON down around 3.2% as of the latest print.

On Holding AG, ONON

Net sales hit 831.9 million Swiss francs, up 14.5% from a year earlier and the first time On has crossed the 800 million franc threshold in a single quarter. On a constant currency basis, growth was 26.4%.

Adjusted EPS came in at 0.37 francs, well ahead of the 0.27 franc consensus estimate. Reported net income was 103.3 million francs, nearly double the 56.7 million francs posted in Q1 2025.

Direct-to-consumer revenue grew 16.4% to 322.3 million francs — but fell slightly short of the 326 million franc forecast. Wholesale, which carries lower margins, rose 13.3% to 509.6 million francs, beating the 499 million franc estimate.

China Outperforms as Asia-Pacific Leads Growth

Asia-Pacific was On’s fastest-growing region in the quarter, with net sales climbing 44.4% to 174 million francs — or 61.4% in constant currency terms. EMEA grew 22.8% and the Americas rose 3.1%, or 17.1% in constant currency.

China was a standout. Sales there are growing by a high-double-digit percentage, and apparel now makes up around 30% of China revenue — compared to roughly 6% companywide. That’s a stark contrast to Nike, which has struggled in the region as local brands take market share.

On’s adjusted EBITDA jumped 45.4% to 174.3 million francs. The adjusted EBITDA margin expanded to 21.0% from 16.5% a year earlier.

Outlook Raised Despite Tariff Uncertainty

For the full year, On guided for revenue of 3.51 billion francs — implying constant currency growth of at least 23%. That came in slightly below the 3.54 billion franc consensus.

The company raised its gross profit margin outlook to at least 64.5%, up from a prior forecast of 63%. Adjusted EBITDA margin guidance was lifted to a range of 19.5%–20%, above the prior range of 18.5%–19%.

On’s outlook continues to factor in a 20% tariff on imports from Vietnam, even after a U.S. Supreme Court ruling effectively removed that duty. The company has applied for a refund but says the situation remains fluid. Coppetti noted that even in a tariff relief scenario, the impact would be “immaterial.”

Just ahead of the quarter close, On announced a leadership change. Co-founders David Allemann and Coppetti stepped in as co-CEOs, replacing Martin Hoffmann, who had been the company’s primary face to Wall Street. The company described Hoffmann’s exit as a “planned hiatus.”

ONON is down roughly 27% year to date heading into this report.

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