Q3 2025 On Holding AG Earnings Call Transcript
Key Points
- On Holding AG (ONON) reported a strong quarter with net sales approaching CHF800 million, growing 24.9% year over year on a reported basis and 34.5% at constant exchange rates.
- The company achieved record profitability with a gross profit margin of 65.7% and an adjusted EBITDA margin of 22.6%, reflecting a nearly 50% year-over-year adjusted EBITDA growth.
- On Holding AG (ONON) experienced significant growth in the Asia Pacific region, marking the fourth consecutive quarter of triple-digit constant currency growth.
- The company's apparel category is rapidly growing, with net sales reaching CHF50.1 million, an increase of 86.9% year over year, and over 1 million apparel units sold in a single quarter for the first time.
- On Holding AG (ONON) raised its 2025 guidance, now expecting constant currency net sales to grow by 34% year over year, well ahead of the previous guidance of at least 31%.
- The company acknowledged certain temporary and one-off factors contributing to the gross profit margin, such as a positive onetime adjustment related to lower-than-anticipated freight and other costs.
- There is a temporary margin effect due to the timing lag between US price increases and the full impact of additional US tariffs.
- Despite strong growth, the company faces challenges in maintaining its premium strategy, requiring discipline in inventory management and full-price sales.
- The US market, while showing strong growth, is being approached with caution to avoid overexpansion and maintain premium positioning.
- On Holding AG (ONON) faces foreign exchange headwinds impacting SG&A and adjusted EBITDA margins, despite the positive impact on gross profit margins.
Good afternoon, and good morning to our investor community. Thank you for joining On 2025 third quarter earnings conference call and webcast. With me today on call are On's Executive Co-Chairman and Co-Founder; Caspar Coppetti; and CEO and CFO, Martin Hoffman.
Before we begin, I will briefly remind everyone that today's call will contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our annual report on Form 20-F for the 2024 fiscal year filed with the SEC on 4th of March 2025 for a detailed explanation of such risks and uncertainties.
We will further reference certain non-IFRS financial measures such as adjusted EBITDA and adjusted EBITDA margin. These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS accounting standards. Please refer to today's release for a
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