On Holding Sales Jump 78%, Earnings Triple, Stock Slumps

Switzerland-based On Holding, which is the company behind the popular On running shoe brand, reported first-quarter sales of CHF 420 million ($471 million based on current exchange rates), up 78% versus last year. Net income soared 209% to CHF 44.4 million ($49.7 million).

“Our record net sales in Q1 are a further proof of the strong brand momentum across all regions, channels and product groups,” Martin Hoffmann, co-CEO, said in a statement announcing the results. He also cited a “largely normalized” supply chain environment compared to the first quarter of 2022 for helping profit margins.

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The company slightly raised its full-year sales forecast to “at least” $1.95 billion. Despite the blowout numbers, the stock initially traded down 10% on the news. Earnings per share beat Wall Street projections by 30%, but sales fell short by 1.4%, according to analyst estimates from S&P Global Market Intelligence.

On’s stock has had a massive spike this year, up 95% through yesterday, and is trading at a rich price. The enterprise value is 6.5 times trailing 12-month sales and 111 times earnings per share. For comparison, Nike currently trades at 3.7 sales and 35 times earnings, per S&P data. Nike has $50.6 billion in revenue and is not expected to have the same growth trajectory as On, but the valuation gap is stark, and high-flying growth stocks can get punished when expectations are high.


North America remains the biggest market for the sneaker brand, where the “cloud” technology that provides a basis for the cushioning system has developed a cult-like following. Sales in the region were up 92% for the quarter and totaled 64% of overall company sales.

On’s profile got a boost in 2019 when tennis icon Roger Federer invested in the company as part of an endorsement agreement following his split with Nike. The company expanded its tennis bench this year by adding Poland’s Iga Świątek and the U.S.’ Ben Shelton as ambassadors.

Last month, the brand posted a win when Kenyan Hellen Obiri, who was competing in only her second marathon, won the women’s Boston Marathon in On CloudTri 1 running shoes.

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