On Holding Ltd (ONON) Q4 2025 Earnings Call Transcript

Why It Matters

The results demonstrate On’s ability to scale a premium sportswear brand through D2C acceleration, margin expansion, and strategic retail investments, positioning it for sustained outperformance in a competitive market.

Key Takeaways

• Net sales hit CHF 2.32 bn, +33% constant‑currency
• D2C share reached 48.8% in Q4, driving margins
• Gross margin rose to 62.1% Q4, record high
• Cash balance grew to CHF 924 m, bolstering liquidity
• 2025 outlook targets CHF 2.94 bn sales, 27% growth

Pulse Analysis

On Holding’s 2024 financials underscore a broader shift in the sportswear sector toward direct‑to‑consumer channels. By nearly half of its revenue now flowing through owned stores and e‑commerce platforms, On captures higher margins and richer consumer data, mirroring trends set by larger rivals while preserving its premium positioning. The company’s rapid 33% constant‑currency sales growth reflects both strong brand resonance and effective geographic diversification, especially in APAC where sales more than doubled year‑over‑year.

Margin expansion was a cornerstone of the quarter, with gross profit climbing to 62.1% and adjusted EBITDA reaching 16.4% in Q4. These improvements stem from a higher D2C mix, disciplined cost management, and a focused retail rollout that added 19 flagship locations across Europe, the Americas, and Asia‑Pacific. The apparel segment, now exceeding CHF 100 million, signals a deliberate move toward a head‑to‑toe offering, supported by targeted marketing spend of 11‑12% of sales. Meanwhile, a cash pile of CHF 924 million and a net working‑capital ratio of 21.5% provide a solid liquidity cushion for further expansion.

Looking ahead, On’s 2025 guidance of at least CHF 2.94 billion in sales and a 17‑17.5% EBITDA margin suggests the company expects to sustain its growth trajectory despite potential foreign‑exchange headwinds. The planned increase to 80 stores in China and continued wholesale door expansion indicate a balanced growth model that leverages both owned and partner channels. For investors, the combination of strong top‑line momentum, expanding margins, and a clear multi‑year roadmap positions On as a compelling play in the premium athletic apparel space.