On Holding (ONON) Stock Dips Despite Crushing Q1 Earnings and Revenue Surge

Key Takeaways

• On Holding surpassed Q1 projections with sales reaching 831.9 million Swiss francs, representing a 14.5% increase year-over-year
• Adjusted earnings per share reached 0.37 francs compared to analyst expectations of 0.27 francs
• Full-year gross profit margin guidance was elevated to a minimum of 64.5%, versus the previous 63% forecast
• The Asia-Pacific region delivered the strongest performance with 44.4% net sales growth; China recorded high-double-digit expansion
• Founders David Allemann and Caspar Coppetti assumed co-CEO roles, succeeding Martin Hoffmann

On Holding exceeded analyst projections for its first quarter across both top and bottom lines while upgrading its annual profitability forecast. Yet shares reversed an early premarket surge of over 6%, with ONON trading down approximately 3.2% at the most recent check.

On Holding AG, ONON

Revenue totaled 831.9 million Swiss francs, marking a 14.5% rise from the prior year and representing the company’s first quarter exceeding the 800 million franc milestone. Measured in constant currency, the increase was 26.4%.

Adjusted earnings per share landed at 0.37 francs, comfortably beating the consensus target of 0.27 francs. Reported net income reached 103.3 million francs, almost doubling the 56.7 million francs recorded in Q1 2025.

Direct-to-consumer sales increased 16.4% to 322.3 million francs — though this narrowly missed the 326 million franc projection. Wholesale operations, which generate lower profit margins, expanded 13.3% to 509.6 million francs, exceeding the 499 million franc forecast.

Asia-Pacific Drives Expansion with China Leading the Charge

The Asia-Pacific territory emerged as On’s top-performing market during the quarter, with net sales surging 44.4% to 174 million francs — or 61.4% when adjusted for currency fluctuations. EMEA registered 22.8% growth while the Americas advanced 3.1%, equivalent to 17.1% in constant currency.

China delivered exceptional results. Revenue in the country is expanding at a high-double-digit pace, with apparel now comprising approximately 30% of China’s total sales — significantly higher than the roughly 6% share across the entire company. This performance stands in sharp contrast to Nike’s difficulties in the region, where domestic competitors have been capturing market share.

On’s adjusted EBITDA soared 45.4% to 174.3 million francs. The adjusted EBITDA margin widened to 21.0% from 16.5% in the comparable period.

Full-Year Forecast Upgraded Amid Tariff Questions

For fiscal 2025, On projected revenue of 3.51 billion francs — suggesting constant currency growth of no less than 23%. This figure trailed the 3.54 billion franc analyst consensus slightly.

The athletic footwear and apparel maker increased its gross profit margin target to at least 64.5%, up from the previous 63% estimate. Adjusted EBITDA margin expectations were also lifted to a 19.5%–20% range, exceeding the earlier 18.5%–19% band.

On’s financial guidance still incorporates assumptions around a 20% tariff on Vietnamese imports, despite a recent U.S. Supreme Court decision that effectively eliminated that levy. The company has filed for a refund but maintains the situation remains uncertain. Coppetti emphasized that even if tariff relief materializes, the financial effect would be “immaterial.”

Shortly before quarter-end, On revealed a change in its executive leadership. Co-founders David Allemann and Coppetti transitioned into co-CEO positions, replacing Martin Hoffmann, who had served as the company’s principal representative with investors. The firm characterized Hoffmann’s departure as a “planned hiatus.”

ONON shares have declined roughly 27% year to date prior to this earnings announcement.

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