On Holding AG (ONON) Earnings Date & Reports

Key Takeaways

• On Holding reported record third-quarter net sales of CHF 931.4 million, up 17.2% year over year (17.8% on a constant-currency basis).
• Adjusted diluted earnings per share (EPS) reached CHF 0.54, well above the CHF 0.38 consensus estimate and up 25.6% from CHF 0.43 a year earlier.
• Reported gross margin hit a record 72.6%, but that figure includes a one-time CHF 52.6 million U.S. tariff refund; excluding it, gross margin was 66.9%.
• The company raised its full-year gross margin outlook to around 66% (excluding tariff refunds) while reaffirming low-20s constant-currency net sales growth for 2026.
• Despite the earnings beat, shares slid in premarket and early trading as investors focused on moderating revenue growth and the one-off nature of the refund.
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Earnings Context and Why It Matters

On Holding (ONON), the Swiss performance sportswear brand, has grown into one of the most closely watched names in athletic footwear. This third-quarter report carries extra weight because it is the first since the company laid out its multi-year "On Premium Playbook" growth strategy at its Investor Day. Investors are watching whether On can sustain its premium positioning and full-price discipline in a promotional, inventory-heavy footwear market, while still delivering the double-digit growth that justifies its valuation. The quarter also lands amid leadership and macro uncertainty, including tariff dynamics and a leadership transition, making the read on margins, direct-to-consumer (DTC) momentum, and forward guidance especially important for the stock's trajectory.

Reported Results

On reported record net sales of CHF 931.4 million for the third quarter ended September 30, 2026, an increase of 17.2% year over year, or 17.8% at constant currency. Results were broadly in line with analyst expectations of roughly CHF 930 million. Direct-to-consumer (DTC) sales rose 25% to CHF 393.3 million, representing 42.2% of total sales, while wholesale grew 12% to CHF 538.2 million. Apparel was a standout, climbing 38.7% to CHF 69.5 million.

Adjusted diluted EPS came in at CHF 0.54, beating the CHF 0.38 consensus and up 25.6% from CHF 0.43 in the prior-year quarter. Net income rose 36.9% to CHF 162.8 million. Reported gross margin reached a record 72.6%, though this included a one-time CHF 52.6 million U.S. tariff refund; excluding that benefit, gross margin was 66.9%, still a record and up from 65.4% in the second quarter.

On guidance, the company raised its full-year gross margin outlook to around 66% excluding tariff refunds (approximately 67.5% including them), up from "at least 65%," while maintaining its full-year 2026 net sales growth outlook in the low-20s range at constant currency.

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Market Reaction and Investor Sentiment

The market's initial reaction was negative despite the earnings beat. ONON shares fell roughly 4.5% in premarket trading and were down about 8% intraday, extending a roughly 19% year-to-date decline. The cautious tone reflects a central tension: profitability is improving, but revenue growth has now decelerated for a third straight quarter, and the headline EPS beat was meaningfully boosted by the one-time tariff refund rather than by stronger underlying demand. Investors also noted that management kept its full-year revenue guidance unchanged rather than raising it, and that some wholesale holiday deliveries were pulled forward from the fourth quarter, creating a near-term headwind. Sentiment remains divided between confidence in On's premium brand and concern about a softer, promotional athletic-footwear market.

Forward Outlook and Key Factors to Monitor

Management expects fourth-quarter sales growth to accelerate, supported by its holiday campaign, new product launches, and continued DTC momentum, even as it holds the line on full-price selling in a promotional environment. Investors will be watching whether that acceleration materializes, particularly given that DTC growth landed slightly below internal plans in the third quarter and some wholesale business was borrowed from the fourth quarter.

Beyond the next quarter, several catalysts are worth monitoring. The Cloudsurfer 3 launch represents the first proof point of On's largest innovation cycle, with a broader rollout beginning in January 2027. The company's entry into new sports—football (soccer) now and golf in the first half of 2027—adds long-term growth optionality but also near-term investment costs in selling, general, and administrative (SG&A) expenses.

Finally, keep an eye on margin quality. The true underlying gross margin of 66.9% (excluding the tariff refund) is a record, but investors will want to see that expansion continue on a clean, comparable basis. With a CFO transition underway and tariff policy still evolving, the durability of margins and the pace of top-line growth will be central to how the market values ONON going forward.

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