On Holding AG (NYSE:ONON) has reported financial results for the third quarter of 2025 that significantly surpassed analyst expectations, prompting a substantial positive reaction in its stock price during pre-market trading.
Earnings and Revenue Performance Versus Estimates
The Swiss sportswear company delivered a powerful earnings beat for the quarter ended September 30, 2025. On's performance exceeded Wall Street forecasts across key metrics, demonstrating stronger-than-anticipated consumer demand and operational execution.
- Q3 2025 Net Sales: CHF 794.4 million versus estimates of CHF 777.0 million
- Q3 2025 Adjusted EPS: CHF 0.43 per share versus estimates of CHF 0.25 per share
The company not only beat revenue expectations but delivered an earnings surprise of approximately 74% above analyst projections. This substantial earnings beat, combined with robust sales growth, forms the core driver behind the market's positive reaction.
Market Reaction
Investors responded enthusiastically to the earnings report, with On Holding shares rising approximately 8.7% in pre-market trading. This positive price action reflects investor confidence in the company's ability to exceed financial targets and maintain its growth trajectory in the competitive sportswear sector. The pre-market surge suggests a reassessment of the company's valuation following the strong quarterly results.
Updated Financial Outlook
Building on its third-quarter momentum, On has raised its full-year 2025 guidance, now projecting stronger performance than previously anticipated. The updated outlook positions the company well above current analyst expectations for the full year.
- Net Sales Guidance: Expected growth of 34% year-over-year on a constant currency basis (previously at least 31%), corresponding to reported net sales of approximately CHF 2.98 billion
- Analyst Full-Year Sales Estimate: CHF 3.03 billion
- Gross Profit Margin Guidance: Expected around 62.5% (previously 60.5-61.0%)
- Adjusted EBITDA Margin Guidance: Expected above 18.0% (previously 17.0-17.5%)
The company's raised guidance, particularly on profitability metrics, indicates management's confidence in sustaining operational improvements and premium brand positioning.
Key Quarterly Highlights
On's third-quarter performance was characterized by strong growth across geographic regions and product categories, with particular strength in higher-margin segments.
- Net sales increased 24.9% to CHF 794.4 million (34.5% on constant currency basis)
- Gross profit margin expanded to 65.7% from 60.6% in the prior year period
- Net income surged 289.8% to CHF 118.9 million
- Asia-Pacific region delivered exceptional growth with net sales increasing 94.2%
- Apparel sales grew 86.9%, indicating successful category expansion beyond footwear
Management commentary highlighted the company's "premium strategy in action" and strengthening global momentum, particularly through direct-to-consumer channels and elevated retail experiences.
Investment Considerations
The combination of earnings beats, raised guidance, and strong fundamental performance across geographic regions presents a compelling case for the company's ongoing growth narrative. The market's positive reaction appears justified given the magnitude of the earnings surprise and improved profitability outlook. However, investors should consider the stock's recent performance context, as shares had declined approximately 16.6% over the past month leading into the earnings report.
For detailed historical earnings data and future estimates, view the complete earnings and estimates overview for On Holding AG.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or recommendation to buy or sell any security. Investors should conduct their own research and consult with financial advisors before making investment decisions.
