On Holding AG (NYSE:ONON) Reports Mixed Q2 2025 Results: Revenue Beat Offsets Earnings Miss as Stock Surges 10%

On Holding AG (NYSE:ONON) reported mixed second-quarter results for 2025, with revenue exceeding expectations but earnings falling short of analyst estimates. The Swiss performance sportswear company posted net sales of CHF 749.2 million ($736 million), a 32% year-over-year increase (38.2% on a constant currency basis), surpassing the consensus estimate of $718.6 million. However, the company reported an adjusted net loss of CHF 29.7 million, with adjusted diluted EPS of -CHF 0.09 (-$0.089), significantly below the expected $0.213 per share profit.

Key Financial Highlights

• Revenue Strength: The 38.2% constant-currency sales growth was driven by robust performance across all regions, particularly Asia-Pacific (+101.3% reported, +110.9% constant currency) and EMEA (+42.9% reported, +46.1% constant currency).
• Channel Performance: Direct-to-consumer (DTC) sales surged 47.2% (54.3% constant currency), outpacing wholesale growth of 23.1% (28.8% constant currency).
• Gross Margin Expansion: Improved to 61.5% from 59.9% a year ago, reflecting pricing power and product mix.
• Profitability Challenges: Despite higher sales, net income swung to a loss of CHF 40.9 million from a profit of CHF 30.8 million in Q2 2024, largely due to foreign exchange losses (CHF 139.9 million) and increased operating expenses.

Market Reaction

The stock surged nearly 10% in pre-market trading, suggesting investors are focusing on the strong revenue beat and raised guidance rather than the earnings miss. This reaction aligns with recent news highlighting On Holding’s brand momentum in Europe and Asia, as well as its upward revision of full-year targets.

Outlook vs. Analyst Estimates

Management raised its full-year guidance, now expecting:

• Net sales growth of at least 31% (constant currency), up from prior guidance of 28%, implying CHF 2.91 billion ($2.92 billion) in revenue vs. analyst estimates of $2.99 billion.
• Gross margin of 60.5–61.0% (up from 60.0–60.5%).
• Adjusted EBITDA margin of 17.0–17.5% (narrowed from 16.5–17.5%).

While the revised sales outlook remains slightly below consensus, the improved margin projections signal confidence in profitability.

Press Release Summary

• Executives emphasized long-term brand building, with CEO Martin Hoffmann citing "consistent execution" under the company’s three-year strategic plan.
• Apparel and accessories sales grew rapidly (+67.5% and +133.3%, respectively), though footwear remains the dominant category (94% of sales).
• Cash reserves declined 8% to CHF 846.6 million, partly due to foreign exchange impacts.

For more detailed earnings estimates and historical performance, view the full earnings and estimates page for On Holding AG.

Disclaimer: This article is not investment advice. Investors should conduct their own research or consult a financial advisor before making decisions.