Sportswear brand On misses quarterly sales forecast as consumers cut back

• Sales growth in the Americas market, which represents over half of On's revenue, slowed to 13% from 17% in the prior quarter
• The company widened its full-year sales guidance range to 3.47-3.56 billion Swiss francs (constant currency), compared to the previous target of about 3.51 billion
• On continues strong expansion in Asia-Pacific with 54.7% sales growth on a constant-currency basis, offsetting weakness in core markets

Summary

Swiss sportswear brand On reported disappointing Q2 results, missing Wall Street sales estimates amid challenging consumer conditions and tariff-related cost pressures. The company posted net sales of 850.3 million Swiss francs ($1.05 billion) for the quarter ended June 30, falling short of analyst expectations of 878.16 million francs.

Key Financial Details:

• Q2 net sales: CHF 850.3 million ($1.05 billion) vs. expected CHF 878.16 million
• Full-year sales outlook widened: CHF 3.47-3.56 billion (constant currency basis), from previous CHF 3.51 billion
• Gross profit margin guidance raised to at least 65%, up from 64.5%
• Americas market (over 50% of revenue) growth slowed to 13% from 17% in Q1

Strategic Positioning:

Management emphasized prioritizing profitability over volume, deliberately avoiding aggressive discounting strategies. The company, founded in 2010 and recognizable for its distinctive hollow-sole sneakers, has successfully challenged Nike and Adidas' market dominance.

Regional Performance:

While core Americas growth decelerated, Asia-Pacific delivered robust expansion with 54.7% constant-currency sales growth.

Market Implications:

The results reflect broader pressures in the sportswear sector, with consumers cutting back amid economic uncertainty and U.S. tariffs increasing costs. The miss follows similar challenges at Adidas, whose shares dropped 12% after missing quarterly profit estimates in July. On's focus on margin preservation over market share suggests a defensive stance in a deteriorating consumer environment, though strong Asia-Pacific growth provides geographic diversification.