Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- On Holding AG (ONON, Financial) reported net sales exceeding CHF725 million, reflecting a 40% growth on a constant currency basis.
- The company's direct-to-consumer business showed strong performance, contributing to an increased gross profit margin of 59.9%.
- The launch of new products like the Cloudsurfer 2 and Cloud 6 has been successful, with the Cloud 6 being the largest product launch ever for the company.
- On Holding AG (ONON) has been recognized by Fast Company as the number one most innovative company in the design category for its LightSpray technology.
- The company is expanding its global presence with new store openings and strategic partnerships, contributing to increased brand awareness and market share.
Negative Points
- The company faces uncertainty due to potential incremental tariffs in the United States, which could impact planning and market dynamics.
- Foreign exchange volatility, with key operating currencies depreciating against the Swiss franc, poses a challenge to profitability.
- Despite strong performance, the company remains cautious about macroeconomic uncertainties that could affect consumer demand in the second half of the year.
- The automation project in the Atlanta warehouse is still in the testing phase, with full load testing yet to be completed.
- The transition in leadership, with Martin Hoffmann taking over as sole CEO, may present challenges as the company adjusts to new management dynamics.
Q & A Highlights
Q: Could you discuss the brand awareness and growth drivers in the Americas following recent campaigns?
A: Caspar Coppetti, Co-Chairman, Co-Founder, Executive Director, explained that the exceptional results in Q1 were due to increased brand efforts, including global initiatives like the Zendaya campaign and market-specific strategies in regions like China. Martin Hoffmann, Co-CEO and CFO, added that the US market reflects global momentum, with strong growth driven by new products and market share gains in running, while maintaining a controlled pace of store expansion.
Q: What regions are contributing to the improved constant currency growth outlook for the full year, and how is growth expected to shape by channel?
A: Martin Hoffmann noted that the outlook remains prudent despite a strong start to the year, with growth driven by brand awareness and product demand across all channels. The D2C channel outperformed wholesale in Q1, with investments in tech capabilities enhancing product showcasing. Growth is broad-based, with significant contributions from Asia Pacific, Europe, and the US.
Q: How are you mitigating the impact of tariffs, and are there any pricing strategies in place?
A: Martin Hoffmann stated that the outlook assumes current tariffs, including a 10% additional tariff on Vietnam. The brand's premium positioning allows for price increases, which will be implemented in the US starting with the fall/winter season. This strategy helps mitigate tariff impacts while maintaining the brand's premium status.
Q: What factors have contributed to the success of your current apparel offerings?
A: Caspar Coppetti highlighted the harmonization of sizing and focus on key categories like running, training, and tennis as drivers of apparel success. Campaigns with FKA twigs and Zendaya have bolstered brand visibility. The apparel share in retail stores is increasing, indicating strong consumer interest and potential for future growth.
Q: How are your wholesale partners responding to the current market environment, and is there any change in their ordering patterns?
A: Caspar Coppetti reported no cancellations or changes in behavior from wholesale partners. The company maintains a close planning relationship with partners, ensuring clean channel inventory and controlled expansion. The strong demand for the brand supports a stable wholesale order book.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
