Footwear company On Holding (ONON) stock gained 7% in early trading after beating second quarter sales estimates and raising its full-year sales guidance.
Net sales increased by 38.2% year over year on a constant currency basis, with revenue coming in at 749 million Swiss francs. The company reported a diluted loss per share of CHF 0.12, a loss of around $0.15.
In 2025, net sales are expected to be up at least 31% year over year on a constant currency basis. Previously, the company guided for sales to be up at least 28%. On also expanded its adjusted EBITDA margin to 17%-17.5% from 16.5%-17.5% previously.
“On has a very strong momentum across the world,” CEO Martin Hoffmann told Yahoo Finance, “This is most visible in our growth of our DTC channel, which has seen 55% growth in the quarter.”
Investors were pleased with On’s ability to mitigate the tariffs successfully on its key sourcing region, Vietnam.
“Our industry has always been exposed to tariffs in the US,” Hoffmann said. “This is nothing new for us. … We have been paying around 20% of most of our imports, and now this number goes up to 40% for importations from Vietnam and 39% for Indonesia.”
Hoffmann said the company benefits from being a premium player, as consumers are willing to pay up for innovation.
He added, “We are a premium brand and we want to be the most premium global sportswear brand. We keep on investing in quality, in our innovation, in our customer experiences, in sustainability, in social impact. … The same is for price increases. We don’t need additional price increases this year to mitigate the impact.”