On Holding beats first-quarter expectations, sees double-digit growth in China as Nike lags

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Logo of Swiss shoemaker On is displayed in a shop in Zurich, Switzerland, Aug. 28, 2025.

Denis Balibouse | Reuters

Swiss sneaker company On saw more strong growth during its first quarter, beating Wall Street’s expectations on the top and bottom lines even as direct-to-consumer revenue fell short of forecasts.

During the quarter ended March 31, On’s direct-to-consumer sales, revenue from its own website and stores, grew 16.4% to 322.3 million Swiss francs (US$414.2 million), falling short of the 326 million francs analysts had expected, according to StreetAccount.

Meanwhile, revenue from its less profitable wholesale channel increased by 13.3% to 509.6 million francs, beating expectations of 499 million francs, according to StreetAccount.

In a news release, the company said “even against an uncertain macroeconomic backdrop,” it decided to raise its profitability outlook and reiterate its 2026 net sales growth forecast.

“That’s not particularly aimed at the consumer … There’s just a lot of things going on, like, for example, the war now in Iran that probably nobody saw coming,” said co-CEO Caspar Coppetti in an interview with CNBC. “We’re a bit in a bubble, I would say, as a brand, because we cater to an affluent and aspirational consumer. So our customers are not really dependent on the gas price.”

On is now expecting its gross profit margin to reach at least 64.5% in 2026, up from its previous forecast of 63%. The outlook continues to include a 20% tariff on imports from Vietnam into the U.S., even though the duty is no longer in effect after a ruling from the U.S. Supreme Court earlier this year, and excludes any potential tariff refunds that result from the decision.

Coppetti said the company has applied for a refund and is continuing to plan for a 20% tariff on Vietnamese imports because the situation remains fluid and it has concerns more duties could still come. Still, even if tariffs were to ease, it would be “immaterial” to the company’s performance, he said.

On is expecting its adjusted earnings before interest, taxes, depreciation and amortization margin to be between 19.5% and 20% — up from a previous range of between 18.5% and 19%.

Here’s how the premium sportswear company performed during the quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

• Earnings per share: 37 cents in francs adjusted vs. 27 cents expected
• Revenue: 831.9 million francs vs. 823 million francs expected

The company’s reported net income during the quarter was 103.3 million francs, or 31 cents per share, compared with 56.7 million francs, or 17 cents per share, a year earlier.

Sales rose to 831.9 million francs, up 14.5% from 727 million francs a year earlier.

On posted another significant sales increase as the company looks to win back investors who have soured on the stock as its rapid growth story begins to slow down. Year to date, the stock is down almost 27% as some analysts doubt the company can grow into a true footwear heavyweight that’s as popular in Paris as it is in Ohio.

As On’s profitability has increased, Coppetti said it is reinvesting in the brand and its growth areas, including apparel and new sports like tennis. The strategy has been particularly effective in China, where sales are growing by a high-double-digit percentage and its apparel penetration is as high as 30%, compared with around 6% companywide.

That stands in stark contrast to Nike, which has seen its business struggle in the region as Chinese consumers opt for local brands and move away from legacy incumbents.

“Chinese consumers are becoming more and more savvy, and they’re looking for the special things. So either they go local, or they’re looking for that extra touch,” said Coppetti. “We’re also European. We’re Swiss and so, you know, the high quality, the attention to detail, really resonates.”

Just before the quarter came to an end, On announced co-founders David Allemann and Coppetti would become the company’s co-CEOs, replacing Martin Hoffmann, known as the company’s face on Wall Street.

Hoffmann had been CEO since 2021, but he shared the job with fellow CEO Marc Maurer for most of that time and was only a solo chief executive for less than a year before On shuffled up its C-suite yet again.

In a news release at the time, the company framed Hoffmann’s departure as a “planned hiatus” and an opportunity to “pursue philanthropic interests,” but his decision to step down also came as the company has grown increasingly complex.

Coppetti told CNBC that On has been “founder-led” from the beginning, so there won’t be any major changes now that he and Allemann have taken over.

“Nothing changes on the strategy,” he said. “We remain as committed as ever to executing this premium strategy with a good mix of ambition and Swiss conservatism, so to speak.”

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