Sportswear brand On misses quarterly sales view as consumers cut back

• Sales growth in the Americas market, which represents over half of On's revenue, slowed to 13% from 17% in the prior quarter on a currency-adjusted basis
• The company widened its full-year net sales outlook range to 3.47-3.56 billion Swiss francs from a previous target of about 3.51 billion francs
• On posted strong growth in Asia-Pacific with sales rising 54.7% on a constant-currency basis, offsetting weakness in core markets

Summary

Swiss sportswear brand On missed second-quarter sales expectations, reporting net sales of 850.3 million Swiss francs ($1.05 billion) for the quarter ended June 30, falling short of analyst estimates of 878.16 million francs. The miss reflects challenging consumer conditions and increased costs from U.S. tariffs.

Key Financial Developments:

• Company prioritizing profitability over volume, avoiding aggressive discounting
• Raised full-year gross profit margin outlook to at least 65% (from 64.5%)
• Widened full-year net sales guidance to 3.47-3.56 billion Swiss francs on constant currency basis (previously 3.51 billion francs)

Regional Performance:

• Americas market (over 50% of revenue) showed decelerating growth at 13% year-over-year, down from 17% in Q1
• Asia-Pacific region posted strong growth of 54.7% on constant-currency basis

Market Context:

Founded in 2010, On has disrupted the sportswear market with its distinctive hollow-sole sneakers, competing against established giants Nike and Adidas. The company's revenue miss follows similar challenges in the sector—Adidas stock dropped approximately 12% after missing quarterly profit estimates in July.

Implications:

The results highlight ongoing consumer spending pressure in On's core North American market, though the company's focus on margin expansion over volume growth suggests a strategic shift toward sustainable profitability. Strong Asia-Pacific performance indicates geographic diversification potential, while tariff pressures remain a headwind for U.S. operations.