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On notched another stellar quarter as the Swiss brand continues to ride a wave of global growth.
Sales spiked 32% in the second quarter vs. a year ago, reaching $923 million (749.2 million Swiss francs), widely exceeding expectations.
On is one of the few sportswear companies this earnings season to raise its sales and earnings projections for 2025.
The Zurich-based company increased its full-year revenue growth guidance to 31% from 28%. The company said gross profit margin is expected to be in the range of 60.5-61% (up from 60-60.5%). In its latest quarterly earnings report, Lululemon held its revenue guidance, but lowered its earnings-per-share guidance, another valuation metric; last month Adidas maintained its full-year revenue guide but warned U.S. tariffs would hit its bottom line this year; Puma reduced its revenue outlook.
On’s results were partly driven by a 47% increase in direct-to-consumer sales, the company said. Sales in Europe, the Middle East, and Africa rose by nearly 43%, while sales in the Asia-Pacific region soared by more than 100%.
The company sources 90% of its products from Vietnam, which struck a trade deal with the U.S. last month, cutting planned tariffs on imports from Vietnam to 20% from the 46% rate President Trump initially set in April.
On raised prices on some products in the U.S. in early July. “This hasn’t changed anything on consumer demand. We have pricing power,” co-founder David Allemann told Front Office Sports Tuesday morning.
“We bring a unique aesthetic—at the intersection of performance, innovation and design—so we’re creating something in high demand,” he added.
On its first-quarter earnings call in May, On executives said it planned to raise prices on some items—not attributing the hike to tariffs, but rather to the company’s overarching goal of being the most premium sportswear brand on the market. Executives doubled down on that call in Tuesday’s earnings call with analysts.
“We want to be the most premium sportswear brand,” CEO and CFO Martin Hoffmann said on the earnings call. “We will continue to invest in what differentiates us; no compromise on innovation, on quality, on customer experience.”
On’s recent lew launches in Cloudsurfer, Cloudmonster, and Cloudrunner franchises have resonated with consumers, the company said—despite their $200 price tags. Executives noted on the call that apparel is a key point of growth. Shoe sales increased by about 30% in the second quarter, while apparel sales climbed by 67% and accessories by 133%. “We’re growing incredibly in apparel,” Hoffmann said. When On-backed tennis stars like Ben Shelton and Iga Swiatek perform well on the court—as they’ve recently done—it “builds momentum and awareness for our brand,” he said.
Once known primarily as a footwear brand, On wants to cover the entire “sportswear” territory. “First- and second-time buyers of the brand are aware of apparel, and they’re adding apparel to their baskets,” Hoffmann told analysts on the call. “It’s going from first adopters to a broader audience.”
On is also in the midst of a global expansion, as it plans to open between 20 and 25 stores a year over the next few years to further its sportswear ambitions; it currently has 55 stores.
Underscoring the importance of the Asia-Pacific market to future success, On opened a store in Chengdu, China this spring, which had the strongest first-weekend opening ever of all On stores, with apparel accounting for 15% of total sales, Allemann told FOS.
Shares of On were 6.7% higher Tuesday morning.
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