On Holding AG Reports Record Net Sales For Q1 2024
$ONON
On Holding AG (NYSE:ONON), the innovative Swiss sportswear company known for its high-performance running shoes and apparel, has been making headlines with its latest financial results and strategic initiatives. Recently, the corporation reported a significant increase in revenue, driven by robust global demand and successful market expansion efforts. The company’s commitment to sustainability and cutting-edge technology continues to resonate with consumers, positioning it as a formidable player in the competitive athletic wear industry.
On Holding AG has announced its financial results for the first quarter ending March 31. The company reported record net sales of CHF 508.2 million, marking a 20.9% increase year-over-year and a 29.2% growth on a constant currency basis. This milestone represents the first time On Holding has surpassed CHF 500 million in net sales within a single quarter. The significant growth was driven by strong demand and momentum in the firm’s direct-to-consumer (DTC) channel, which saw a 39.0% increase in net sales year-over-year, or 48.7% on a constant currency basis. The DTC channel now accounts for 37.5% of On Holding’s total net sales.
This growth, coupled with efficient inventory management, has supported the company’s expansion of its premium gross profit margin to 59.7%, up from 58.3% in the previous year. Martin Hoffmann, Co-CEO and CFO of On Holding, expressed enthusiasm about the company’s performance, stating, “The first quarter was a very strong start to the year and a further step in the execution of our long-term strategy to be the most premium global sportswear brand. We are thrilled to have exceeded our expectations and surpassed the half-billion net sales mark in a single quarter.” Hoffmann highlighted the strength in the DTC channel as a clear indicator of the ongoing strong brand momentum. The company also reported a record high quarterly net income of CHF 91.4 million and significant adjusted EBITDA expansion, reaching CHF 77.4 million. The continued high demand for the On brand provides further confidence in the company’s goals for the remainder of the year.
On Holding reiterated its full-year expectation of at least 30% growth in net sales on a constant currency basis, translating to reported net sales of at least CHF 2.29 billion at current spot rates. The company also expects a gross profit margin of around 60% and an adjusted EBITDA margin in the range of 16.0 – 16.5% for the full year. Caspar Coppetti, Co-Founder and Executive Co-Chairman of On Holding, emphasized the firm’s achievements and future outlook, stating, “We are starting 2024 with very high confidence and a whole lot of excitement, achieving record net sales and profitability in the first quarter. Hellen Obiri’s win at the marathon in Boston highlights our team’s relentless dedication to delivering cutting-edge and sustainable innovations to athletes and consumers alike.” Coppetti also noted the focus on premium execution of strategic priorities and the anticipation of more athlete success stories throughout the year. Key financial highlights for the three-month period ended March 31 include a 20.9% increase in net sales to CHF 508.2 million, a 39.0% increase in net sales through the DTC channel to CHF 190.5 million and a 12.2% increase in net sales through the wholesale channel to CHF 317.7 million.
The company also reported a 23.9% increase in gross profit to CHF 303.3 million, with a gross profit margin of 59.7%. Net income increased by 106.0% to CHF 91.4 million, with a net income margin of 18.0%. On Holding’s performance across different regions also showed significant growth. Net sales in Europe, the Middle East and Africa (EMEA) increased by 6.1% to CHF 126.2 million, while net sales in the Americas rose by 22.0% to CHF 329.6 million. The Asia-Pacific region saw the highest growth, with net sales increasing by 68.6% to CHF 52.4 million. On a constant currency basis, net sales in EMEA, the Americas and Asia-Pacific increased by 10.4%, 30.4% and 90.7%, respectively.
The company continues to focus on its Dream On strategy, aiming to increase global awareness for the On brand and build closer connections with existing fans and new audiences through a seamless omni-channel experience. Significant brand moments and exciting product launches in the coming months are expected to pave the way for the next growth phase in On Holding’s vision to be the most premium global sportswear brand. On Holding AG has delivered a strong start to the financial year 2024, achieving record net sales and profitability in the first quarter. With a robust outlook and confidence in its goals, On Holding is poised to further solidify its position as a leading global sportswear brand.
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