On Holding (ONON 4.01%), a Switzerland-based pioneer in athletic performance footwear and apparel, reported its earnings results for the fourth quarter of 2024 on March 4. Its adjusted earnings per share (EPS) of 0.33 Swiss francs (about $0.37 at the current exchange rate) exceeded the market estimate of 0.22 Swiss francs ($0.20) per share. Revenue of 606.6 million Swiss francs ($679.4 million) also topped the predicted 589.2 million Swiss francs ($662 million).
| Metric | Q4 2024 | Q4 2024 Estimate | Q4 2023 | % Change |
|---|---|---|---|---|
| Adjusted EPS (Swiss francs) | 0.33 | 0.22 | (0.05) | N/A |
| Revenue (Swiss francs) | 606.6 million | 589.2 million | 447.1 million | 35.7% |
| Gross profit margin | 62.1% | - | 60.4% | 170 basis points |
| Net income (Swiss francs) | 89.5 million | - | (26.8 million) | N/A |
Source: Analyst estimates for the quarter provided by FactSet.
Company Overview and Key Focus Areas
On Holding, renowned for its innovative running shoes and high-performance sportswear, has cemented its position as a global sports brand since its inception in Zurich in 2010. The company is focused on expanding its market reach through a broad distribution network that includes independent retailers, distributors, online channels, and its own retail outlets. This reach is crucial in a highly competitive market, enabling it to capture diverse consumer bases across geographic regions.
Innovation remains a cornerstone of On Holding's strategy. The company frequently modernizes its product range with new technologies like LightSpray. This helps On differentiate its products in a crowded athletic wear market. Maintaining its strong brand reputation is also a priority for On.
NYSE: ONON
Key Data Points
Quarter in Review
During the fourth quarter, On Holding demonstrated noteworthy growth, particularly in its direct-to-consumer segment, where sales surged by 43.4%, contributing significantly to its gross profit margin of 62.1% -- an improvement from 60.4% in Q4 2023. The company achieved this through strategic sales mix adjustments, focusing on high-demand consumers and capitalizing on e-commerce platforms.
Meanwhile, its wholesale segment grew by 29.1%. The overall revenue was 606.6 million Swiss francs, a 35.7% increase from 447.1 million Swiss francs in Q4 2023.
On's apparel sales grew by an impressive 77.5% in the quarter, aided by successful product launches. Its new LightSpray technology was well received, further strengthening On's market position. On the financial side, the net income of 89.5 million Swiss francs was a notable turnaround from its loss of 26.8 million Swiss francs in Q4 2023.
Looking Ahead
On Holding has ambitious plans moving into 2025. Management expects net sales to grow at least 27% on a constant-currency basis, targeting 2.94 billion Swiss francs. It aims to sustain gross profit margins of around 60.5%, and an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin between 17.0% and 17.5%. These targets align with the company’s historical patterns of promoting operational efficiencies and sales growth, particularly via its expanding direct-to-consume segment.
On appears set to maintain its momentum into 2025, leveraging its current accomplishments in brand development and consumer engagement. Investors should keep abreast of On Holding's strategic expansions into emerging regions such as Asia-Pacific, where market potential is considerable. The company’s future trajectory will depend heavily on its ability to innovate and outmaneuver its competitors.
