After enduring a difficult year, the stock price for Swiss athletic-wear company On Holding (ONON +2.05%) is suddenly up sharply, climbing almost 19% this week.
What's going on?
On Nov. 12, the company reported extremely strong third-quarter financial results. Net sales increased 24.9% over the same quarter a year ago, to 794.4 million Swiss francs, or about $996 million. The figure beat analysts' consensus expectations.
Earnings came in at 0.43 Swiss francs ($0.54) per share, well above the 0.27 Swiss francs ($0.34) per share that Wall Street predicted.
Image source: Getty Images.
Best of all, the company raised full-year revenue growth guidance to 34%. The previous guidance saw growth of 31%. That would take sales to about 2.98 billion Swiss francs, or $3.74 billion, at the current exchange rate.
And the company's gross profit margin is now expected to be around 62.5% for the year, up from the previous estimate of 60.5% to 61%.
On Holdings focuses on premium products
On Holding is just 15 years old and now sells premium footwear, apparel, and accessories for running, training, and tennis in more than 80 countries. Its premium products are higher-end than those of some competitors like Nike and Adidas, as it targets a more affluent audience. On's sneakers, with their hallmark holes in the sole, start at around $100 and rise quickly from there. Its Cloudmonster Hyper line can go for as much as $350 a pair.
NYSE: ONON
Key Data Points
On has had success in the U.S. and Europe and more recently expanded into Asia. Net sales in the Asia-Pacific region increased 109% in the third quarter on a constant currency basis. Sales in the Americas were up 21% and climbed 33% in the Europe-Middle East region.
Welcome results
The quarterly results are extremely good news for On Holding shareholders, who watched the stock fall almost 37% this year through early November after a huge two-year rally from early 2023 to early 2025, when shares tripled in value.
The drop was largely attributed to fears about tariffs and ongoing global inflation. Much of the company's merchandise is manufactured in Southeast Asia, where U.S. tariffs have hit exports hard. Analysts also cited fears of a resurgent Nike, which is in the middle of a turnaround, though that could take one to two years.
On Holdings remains an expensive stock
Despite their falling price this year, On's shares are still not cheap. The stock currently trades at about 80 times trailing earnings, while Nike's trailing PE ratio is a much more modest 33.
But On's growth is hard to ignore. Its premium positioning and price tag have made it a phenomenon in some markets, and a bit of a status symbol on the running path or tennis court.
Even if the stock is too expensive for some buyers, it's well worth watching.
