On raises full year outlook on strong Q2 trading

On Holding AG reported a second quarter net sales increase of 52.3 percent to 444.3 million Swiss francs.

For the six month period, Swiss label On’s net sales increased 63.9 percent to 864.5 million Swiss francs.

Supported by an exciting product pipeline, encouraging feedback from wholesale partners, and a strong start into Q3, On is again raising its outlook for the full fiscal year.

Commenting on the trading results, Martin Hoffmann, co-CEO and CFO of On, said in a statement: “The very strong first six months of the year and now six consecutive record quarters is a testament to the incredible work and dedication our team continues to showcase every day. The strength of the On brand and continued exceptional growth is visible across channels, regions and products."

Highlights of On’s Q2 results

The company’s net sales through the DTC sales channel increased 54.7percent to 163.5 million Swiss francs; while net sales through the wholesale sales channel increased 51 percent to 280 million Swiss francs.

On’s net sales in Europe, Middle East and Africa (EMEA), Americas and Asia-Pacific increased 28.9 percent to 113.6 million Swiss francs, 59.8 percent to 296.6 million Swiss francs and 90.2 percent to 34.1 million Swiss francs, respectively.

Net sales from shoes, apparel and accessories increased 52.6 percent to 428.2 million Swiss francs, 45.9 percent to 13.4 million Swiss francs and 45.4 percent to 2.7 million Swiss francs, respectively.

Gross profit increased 64.4 percent to 264.5 million Swiss francs, gross profit margin increased to 59.5 percent.

Net income for the quarter decreased 93.3 percent to 3.3 million Swiss francs, basic earnings per share decreased to 0.01, while diluted EPS also decreased to 0.01 francs.

The company’s adjusted EBITDA increased 99.6 percent to 62.7 million Swiss francs, while adjusted EBITDA margin increased to 14.1 percent. Adjusted net income decreased to 11.7 million Swiss francs, adjusted basic EPS decreased to 0.04 Swiss francs and adjusted diluted EPS decreased to 0.04 Swiss francs.

Review of On’s H1 financial performance

Net sales through the DTC sales channel increased 58.9 percent to 300.5 million Swiss francs, while net sales through the wholesale sales channel increased 66.7 percent to 564 million Swiss francs.

Net sales in the EMEA, Americas and Asia-Pacific increased 39.4 percent to 232.2 million Swiss francs, 73.6 percent to 566.8 million Swiss francs and 90.5 percent to 65.5 million Swiss francs, respectively.

The company’s net sales from shoes, apparel and accessories increased 64.7 percent to 828.7 million Swiss francs, 47.6 percent to 30.3 million Swiss francs and 48.9 percent to 5.4 million Swiss francs, respectively.

Gross profit for the quarter increased 80.1 percent to 509.4 million Swiss francs, while gross profit margin increased to 58.9 percent.

On’s net income decreased 24.9 percent to 47.7 million Swiss francs, basic EPS decreased to 0.15 Swiss francs and diluted EPS decreased to 0.15 Swiss francs.

Adjusted EBITDA for the quarter increased 162.5 percent to 123.7 million Swiss francs, adjusted EBITDA margin increased to 14.3 percent, adjusted net income decreased to 60.5 million Swiss francs, adjusted basic EPS decreased to 0.19 Swiss francs and adjusted diluted EPS remained unchanged at 0.19 Swiss francs.

On raises full year outlook

The company now expects to reach net sales of 1.76 billion Swiss francs, which implies a year-over-year growth rate of 44 percent and a second half year growth rate of close to 30 percent. The guidance for the second half of the year further implies a constant currency growth rate of 44 percent.

On is maintaining its previous outlook on gross profit margin and adjusted EBITDA margin of 58.5 percent and 15 percent respectively. As it relates to gross profit margin, On sees the potential to exceed the 58.5 percent mark.

“We are coming closer to our two-year anniversary since our IPO. Our product innovation engine has delivered six all-new performance shoes within the 24-month period, as we continue to take market share in the specialty run channel. We have opened the door for future regional growth and category expansion, while also improving our operational backbone," added David Allemann, co-founder and executive co-chairman of On.