Swiss sneaker company On beats sales estimates, raises guidance despite Vietnam tariffs
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Swiss sneakermaker On posted another quarter of strong growth as it leans on innovation to drive sales.
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August 12, 2025
09:00 AM
CNBC
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In this articleONON your favorite stocksCREATE FREE ACCOUNTOn Running shoes at On's headquarters in in Zurich, Switzerland.CNBCOn sales rose 32% in the Swiss sportswear company's second quarter, leading it to raise its full-year revenue guidance even as it contends with new tariffs on imports from Vietnam
The buzzy sneaker brand, which has been credited with taking market from Nike, now expects full year-sales of 2.91 billion Swiss francs ($3.58 billion), up from its previous outlook of 2.86 billion francs ($3.52 billion)
That's in line with Wall Street expectations of 2.92 billion francs ($3.59 billion), according to LSEG
On also raised its gross margin guidance to a range of 60.5% to 61%, compared with its previous outlook of between 60% and 60.5%
The company, which sources 90% of its goods from Vietnam, raised prices on July 1 to offset the higher costs
It hasn't seen demand slow down among wholesale partners or consumers, CEO Martin Hoffmann told CNBC in an interview. "We have a lot of confidence in our lifestyle , so we skewed the price increases more towards the lifestyle , while trying to stay a bit more where we were on our running ducts," Hoffmann explained. "So far, we don't see negative impact from the price increases." The company, which has grown more than 30% in nearly every quarter since 2023, beat Wall Street's sales expectations for the second quarter
Here's how On did in its second quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:Loss per : 9 cents in francs ($0.11) adjusted
The figure wasn't immediately comparable to estimates
Revenue: 749 million francs ($922 million) vs. 705 million francs ($868 million) expectedOn's net loss in the three months June 30 was 40.9 million francs ($50.4 million) or 12 cents ($0.15) per , compared to a net income of $30.8 million ($37.9 million), or 10 cents ($0.12) per , in the year-ago period
The loss was primarily driven by foreign exchange fluctuations between the U.S. dollar and the Swiss franc.Sales rose to 749 million francs ($922 million), up 32% from 568 million francs ($699 million) a year earlier.On, founded in Switzerland in 2010, has sought to become the most premium sportswear brand on the market
It is one of several companies that have been taking from Nike, most notably in its running segment
The company draws a fraction of Nike's annual sales, but it has garnered a reputation for innovation, a recent knock against the legacy sneaker giant
In a sneaker category that's been relatively soft in recent years, On has consistently grown sales in the mid-double digits and still has more room to grow given how low its brand awareness is in some parts of the world
One key to the strategy has been balancing direct sales through its own website and stores and sales through wholesale
At a time when Nike pulled away from wholesalers, On and others filled that crucial shelf space while growing their store foot and digital revenue
During the second quarter, On's wholesale and direct-to-consumer revenue both exceeded Wall Street expectations
On's wholesale revenue was 441 million francs ($543 million), compared to estimates of 429 million francs ($528 million), according to StreetAccount
Direct sales were 308 million francs ($379 million), compared to expectations of 279 million francs ($344 million), according to StreetAccount
Sales in the Americas; Europe, the Middle East and Africa; and the Asia-Pacific region all beat expectations, according to StreetAccount
While On doesn't break out its performance in China, Hoffmann said it's been a bright spot for the company, as sales grew 50% in the second quarter compared to the year-ago period. "The American and the Chinese consumer is very strong for On," said Hoffmann. "We have seen basically 50% same-store growth in our retail stores, even bigger growth in our [e-commerce] channel, and then the new stores come on top so … China is a very strong market for us."
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