Q2 2026 On Holding AG Earnings Call Transcript
Key Points
- On Holding AG (ONON) delivered strong Q2 2026 results with net sales reaching CHF850 million, a 22% constant currency growth, and DTC channel growing 34% at constant currency.
- Gross margin expanded to 65.4%, driven by strong DTC mix, disciplined full-price execution, and operational efficiencies, leading to an upgraded full-year gross margin outlook of at least 65%.
- Adjusted EBITDA margin reached 19.8%, with absolute constant currency adjusted EBITDA growth of over 30% year-over-year, showcasing industry-leading profitability.
- Innovation pipeline is robust, with new technologies like CloudTec Steel, Helion HF superfoam, and Surreal foam, and the Cloudboom Strike 2 delivering a 1.6% improvement in running economy, driving strong sell-through and partner orders.
- The company is successfully expanding into new verticals and geographies, with tennis apparel sales nearly tripling, training vertical growing 40%, and APAC region growing 54.7% at constant currency, including strong performance in Japan, Korea, and Greater China.
- Brand momentum is strong, with awareness increasing to 30%, a growing younger customer base (over one-third under 34), and successful collaborations like Zendaya and Loewe, driving premium positioning and cultural relevance.
- On Holding AG (ONON) experienced softer sell-out in some everyday running franchises in the wholesale channel, particularly in the Americas, due to a highly promotional multi-brand marketplace.
- The company deliberately reduced wholesale sell-in to protect full-price integrity, which resulted in more moderate wholesale growth of 12.7% at constant currency and a lower overall revenue guidance for the year.
- The Americas region saw slower growth at 13.0% constant currency, reflecting the wholesale challenges and promotional environment, with DTC outperforming wholesale in every region.
- Inventory levels increased by 31% year-over-year, driven by volume-led growth and FX impacts, which could pose a risk if sell-through does not improve.
- The company expects Q3 growth to be lower than Q4 due to continued wholesale actions, indicating near-term headwinds in the wholesale channel.
- The company maintained its adjusted EBITDA margin guidance despite the gross margin upgrade, as it plans to continue investing in brand building and future growth, which may limit near-term margin expansion.
Hello, everyone. Thank you for joining us, and welcome to the On Holding AG second quarter 2026 earnings call. (Operator Instructions)
I will now hand the conference over to Liv Radlinger, Head of Investor Relations. Liv, please go ahead.
Good afternoon and good morning to our investor community. Thank you for joining On's second quarter earnings conference call and webcast. With me today on the call are David Allemann, founder and Co-CEO; and Frank Sluis, CFO.
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 2025 fiscal year, filed with the SEC on 3rd March 2026 for a detailed discussion of such risks and uncertainties.
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