On Charges Ahead Raising Revenue Forecast Again Amid Premium Demand
On Holding has once again demonstrated robust financial performance, significantly raising its annual revenue target for the third time this year. This upward revision follows a stellar quarter where the Swiss sportswear brand comfortably surpassed quarterly sales expectations, driven by persistent strong demand for its premium running shoes and sneakers. This impressive growth comes despite recent price increases, underscoring the brand's unique position in the market.
The company's success is largely attributed to its strong appeal among affluent consumers, particularly in the US, which remains On's largest market. Unlike a broader slowdown in spending observed among lower-income households, wealthier consumers continue to invest in luxury and high-quality items, mirroring trends seen with brands like Coach and Birkenstock. CEO Martin Hoffmann highlighted this resilience, stating that customers did not deter from purchasing On products even after price adjustments implemented on July 1st. He further noted that On customers tend to be less sensitive to price increases, allowing the brand to increase its share of full-price sales during the quarter.
Illustrating its premium positioning, On's product lineup includes popular items like the Cloudmonster running shoe range, which starts at $170, and the Roger Pro tennis shoes, developed in collaboration with tennis legend Roger Federer, retailing for $220. Financially, Zurich-based On now projects 2025 net sales to reach 2.98 billion Swiss francs ($3.76 billion), an increase from its earlier forecast of 2.91 billion Swiss francs. The company has also elevated its gross profit margin forecast to an impressive 62.5% from a previous target range of 60.5% to 61%.
The third quarter proved exceptionally strong, with On reporting sales of 794.4 million Swiss francs, marking a substantial 24.9% increase from the same period a year ago. This figure comfortably beat the average analyst forecast of 726.8 million Swiss francs, according to LSEG data. Geographically, the brand has experienced remarkable growth in Asia, where sales surged by an impressive 94.2% in the quarter, signaling expanding global influence and brand appeal.
Like many other sportswear brands, On has faced the challenge of US tariffs imposed on key manufacturing hubs in Vietnam and China. These tariffs led to increased import costs, which partly prompted the recent price increases. However, given the current robust sales performance, CEO Martin Hoffmann confirmed that no further price adjustments are planned for the coming months or the first part of 2026. He expressed confidence in the company's ability to absorb these additional costs, stating, "We can easily digest the tariffs that we have, and we still drive a better margin than what we anticipated we will have." In a sportswear market often characterized by heavy discounting, Hoffmann reiterated On's strategic commitment to targeting full-price sales, especially during the crucial holiday shopping season, further solidifying its premium market position.
