On records strong Q3 growth, lifts full year outlook

Swiss sportswear brand On net sales increased by 32.3 percent in the third quarter to 635.8 million Swiss francs or by 33.2 percent on a constant currency basis.

On’s net sales in the nine month period increased by 27.3 percent to 1,711.7 million Swiss francs, or by 30.7 percent on a constant currency basis.

Commenting on the financial results, Caspar Coppetti, co-founder and executive co-chairman of On, said in a statement: "This quarter's record results are a testament to the incredible momentum we have built. From increasing our brand awareness amongst our core communities worldwide, to pushing the boundaries of performance credibility and deepening our sustainability impact, to expanding our premium footprint across all channels, we are turning our dream into a reality."

On reports strong Q3 results

The company’s net sales through the direct-to-consumer channel increased by 49.8 percent to 246.7 million Swiss francs or by 50.7 percent on a constant currency basis; while net sales through the wholesale sales channel increased by 23.2 percent to 389.1 million Swiss francs, or by 24 percent on a constant currency basis.

Net sales in Europe, Middle East and Africa (EMEA), Americas and Asia-Pacific increased by 15.1 percent to 165.8 million Swiss francs, 34.1 percent to 395.5 million Swiss francs and 79.3 percent to 74.6 million Swiss francs, respectively. Net sales in EMEA, Americas and Asia-Pacific increased by 15.2 percent, 34.5 percent and 85.7 percent on a constant currency basis, respectively.

The company’s net sales from shoes, apparel and accessories increased by 32.1 percent to 603.7 million Swiss francs, 33.4 percent to 26.8 million Swiss francs and 53.9 percent to 5.3 million Swiss francs, respectively. Net sales from shoes, apparel and accessories increased by 32.9 percent, 34.7 percent and 56.2 percent on a constant currency basis, respectively.

Gross profit for the quarter increased by 34 percent to 385.3 million Swiss francs and gross profit margin increased to 60.6 percent. Net income decreased by negative 48 percent to 30.5 million Swiss francs, while basic and diluted earnings per share decreased to 0.09 Swiss francs.

Third quarter adjusted EBITDA increased by 47.7 percent to 120.1 million Swiss francs, while adjusted EBITDA margin increased to 18.9 percent. Adjusted net income decreased to 50.2 million Swiss francs, while adjusted basic EPS decreased to 0.16 Swiss francs and adjusted diluted EPS decreased to 0.15 Swiss francs.

Highlights of On’s nine-month results

Nine month net sales through the DTC sales channel increased by 39 percent to 646.6 million Swiss francs, or by 43 percent on a constant currency basis.

The company’s net sales through the wholesale sales channel increased by 21.1 percent to 1,065.1 million Swiss francs or by 24.2 percent on a constant currency basis.

Net sales in EMEA, Americas and Asia-Pacific increased by 14.4 percent to 430.4 million Swiss francs, 27.1 percent to 1,095.1 million Swiss francs and 73.9 percent to 186.2 million Swiss francs, respectively. Net sales in EMEA, Americas and Asia-Pacific increased by 15.9 percent, 30.2 percent and 86.3 percent on a constant currency basis, respectively.

The company said net sales from shoes, apparel and accessories increased by 26.9 percent to 1,630.8 million Swiss francs, 35.7 percent to 68.4 million Swiss francs and 39.5 percent to 12.4 million Swiss francs, respectively. Constant currency net sales improved by 30.3 percent, 39.8 percent and 44.1 percent on a constant currency basis, respectively.

Gross profit for the quarter increased by 29.1 percent to 1,028.9 million Swiss francs and gross profit margin increased to 60.1 percent. Net income increased by 43.6 percent to 152.7 million Swiss francs, while net income margin increased to 8.9 percent. The company’s basic and diluted EPS increased to 0.47 Swiss francs.

Adjusted EBITDA for the period increased by 40.6 percent to 288.3 million Swiss francs and adjusted EBITDA margin increased to 16.8 percent. Adjusted net income increased by 61.5 percent to 203.6 million Swiss francs, adjusted basic EPS increased to 0.63 Swiss francs and adjusted diluted EPS increased to 0.62 Swiss francs.

On raises outlook

"The resulting net sales and profitability ahead of our expectations puts us in a position to significantly increase our outlook for the full year 2024, and fuels our confidence as we head into the holiday season and continue to shape the future of sportswear," added Martin Hoffmann, Co-CEO and CFO of On.

Due to the strong third quarter results, On is raising its full year net sales growth outlook to at least 32 percent on a constant currency basis, implying reported net sales of at least 2.29 billion Swiss francs for the full year.

Based on strong year-to-date profitability and the continued strength of On's DTC channel, On expects to exceed its previously stated profitability targets for the full year 2024.

On now anticipates achieving a gross profit margin of approximately 60.5 percent and an adjusted EBITDA margin at the upper end of its previous expected range of 16.0 to 16.5 percent.