On Reports Results for the Third Quarter and Nine-Month Period Ended September 30, 2024 Dienstag, 12. November 2024 - 11:06

• On reports an all-time record quarter for both net sales and profitability. Net sales increased by 32.3%, and by 33.2% on a constant currency basis, reaching CHF 635.8 million in Q3 2024. The strong growth is fueled by significant acceleration in On's direct-to-consumer (“DTC”) channel, which grew 49.8% year-over-year, and by 50.7% on a constant currency basis.

• The significant growth in On's DTC channel results in a 38.8% DTC share for the third quarter, an increase of 450 basis points compared to the prior year period. This strong growth reflects continued exceptional momentum for the On brand, driven by significant increases in global brand awareness and supported by On’s recent operational improvements.

• On achieves its highest gross profit margin since its IPO in September 2021, reaching 60.6% in Q3 2024, up from 59.9% in the prior year period. This significant increase is driven by growth in the DTC channel and a continued disciplined approach to full-price sales. The strong net sales performance, combined with disciplined cost management, further results in an adjusted EBITDA margin of 18.9%.

• Driven by the strong performance in the first nine months of 2024 and significant brand momentum heading into the holiday season, On is raising its full year 2024 net sales growth outlook to at least 32% on a constant currency basis. This corresponds to reported net sales of at least CHF 2.29 billion at current spot rates. On further anticipates an increased gross profit margin of around 60.5% for the full year 2024 and now expects an adjusted EBITDA margin at the upper end of the previous expectation of 16.0 - 16.5% for the full year 2024.

• On's global brand awareness has surged in recent months, fueled by a strong presence at the Paris Olympics, the incredible success of On athletes, extensive coverage of its innovative LightSpray™ technology, and high-profile and long-term partnerships with influential personalities like Zendaya. This momentum is further amplified by exceptional growth in the APAC region, strategic store openings in key cities around the world, and the continued success of On's core running franchises. These achievements underscore On's long-term vision of being the most premium global sportswear brand.

 

ZURICH, Switzerland, November 12, 2024 - On Holding AG (NYSE: ONON) (“On,” “On Holding AG,” the “Company,” “we,” “our,” “ours,” or “us”), has announced its financial results for the third quarter and nine-month period ended September 30, 2024.

Third Quarter 2024 Financial and Operating Metrics

Key highlights for the three-month period ended September 30, 2024 compared to the three-month period ended September 30, 2023 include:

• net sales increased by 32.3% to CHF 635.8 million, or by 33.2% on a constant currency basis;

• net sales through the direct-to-consumer (“DTC”) sales channel increased by 49.8% to CHF 246.7 million, or by 50.7% on a constant currency basis;

• net sales through the wholesale sales channel increased by 23.2% to CHF 389.1 million, or by 24.0% on a constant currency basis;

• net sales in Europe, Middle East and Africa (“EMEA”), Americas and Asia-Pacific increased by 15.1% to CHF 165.8 million, 34.1% to CHF 395.5 million and 79.3% to CHF 74.6 million, respectively;

• net sales in EMEA, Americas and Asia-Pacific increased by 15.2%, 34.5% and 85.7% on a constant currency basis, respectively;

• net sales from shoes, apparel and accessories increased by 32.1% to CHF 603.7 million, 33.4% to CHF 26.8 million and 53.9% to CHF 5.3 million, respectively;

• net sales from shoes, apparel and accessories increased by 32.9%, 34.7% and 56.2% on a constant currency basis, respectively;

• gross profit increased by 34.0% to CHF 385.3 million from CHF 287.7 million;

• gross profit margin increased to 60.6% from 59.9%;

• net income decreased by (48.0)% to CHF 30.5 million from CHF 58.7 million;

• net income margin decreased to 4.8% from 12.2%;

• basic earnings per share (“EPS”) Class A (CHF) decreased to CHF 0.09 from CHF 0.18;

• diluted EPS Class A (CHF) decreased to CHF 0.09 from CHF 0.18;

• adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") increased by 47.7% to CHF 120.1 million from CHF 81.3 million;

• adjusted EBITDA margin increased to 18.9% from 16.9%;

• adjusted net income decreased to CHF 50.2 million from CHF 65.5 million;

• adjusted basic EPS Class A (CHF) decreased to CHF 0.16 from CHF 0.21; and

• adjusted diluted EPS Class A (CHF) decreased to CHF 0.15 from CHF 0.20.

 

Key highlights for the nine-month period ended September 30, 2024 compared to the nine-month period ended September 30, 2023 include:

• net sales increased by 27.3% to CHF 1,711.7 million, or by 30.7% on a constant currency basis;

• net sales through the DTC sales channel increased by 39.0% to CHF 646.6 million, or by 43.0% on a constant currency basis;

• net sales through the wholesale sales channel increased by 21.1% to CHF 1,065.1 million, or by 24.2% on a constant currency basis;

• net sales in EMEA, Americas and Asia-Pacific increased by 14.4% to CHF 430.4 million, 27.1% to CHF 1,095.1 million and 73.9% to CHF 186.2 million, respectively;

• net sales in EMEA, Americas and Asia-Pacific increased by 15.9%, 30.2% and 86.3% on a constant currency basis, respectively;

• net sales from shoes, apparel and accessories increased by 26.9% to CHF 1,630.8 million, 35.7% to CHF 68.4 million and 39.5% to CHF 12.4 million, respectively;

• net sales from shoes, apparel and accessories increased by 30.3%, 39.8% and 44.1% on a constant currency basis, respectively;

• gross profit increased by 29.1% to CHF 1,028.9 million from CHF 797.1 million;

• gross profit margin increased to 60.1% from 59.3%;

• net income increased by 43.6% to CHF 152.7 million from CHF 106.3 million;

• net income margin increased to 8.9% from 7.9%;

• basic EPS Class A (CHF) increased to CHF 0.47 from CHF 0.33;

• diluted EPS Class A (CHF) increased to CHF 0.47 from CHF 0.33;

• adjusted EBITDA increased by 40.6% to CHF 288.3 million from CHF 205.0 million;

• adjusted EBITDA margin increased to 16.8% from 15.2%;

• adjusted net income increased by 61.5% to CHF 203.6 million from CHF 126.1 million;

• adjusted basic EPS Class A (CHF) increased to CHF 0.63 from CHF 0.40; and

• adjusted diluted EPS Class A (CHF) increased to CHF 0.62 from CHF 0.39.

 

Key highlights as of September 30, 2024 compared to December 31, 2023 include:

• cash and cash equivalents increased by 51.4% to CHF 749.0 million from CHF 494.6 million; and

• net working capital increased by 8.9% to CHF 540.1 million from CHF 496.2 million.

Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic EPS, adjusted diluted EPS, net working capital and net sales on a constant currency basis are non-IFRS measures used by us to evaluate our performance. Furthermore, we believe these non-IFRS measures enhance investors' understanding of our financial and operating performance from period to period because they enhance the comparability of results between each period, help identify trends in operating results and provide additional insight and transparency on how management evaluates the business. Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic EPS, adjusted diluted EPS, net working capital and net sales on a constant currency basis should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with IFRS. For a detailed description and a reconciliation to the nearest IFRS measure, see section titled “Non-IFRS Measures.”

Outlook

Driven by increasing global brand awareness, On has achieved a very strong year-to-date net sales growth rate of 27.3%, including over CHF 1 billion net sales contribution from the Americas region in the first nine months of the year. Supported by a relentless focus on operational excellence over recent months, On heads into the holiday season with a lot of confidence to fulfill the strong consumer demand for the brand in the fourth quarter.

Due to the strong third quarter results ahead of expectations and continued global brand momentum, On is raising its full year 2024 net sales growth outlook to at least 32% on a constant currency basis, implying reported net sales of at least CHF 2.29 billion for the full year. This embeds the expectation for an acceleration in the constant currency net sales growth rate in Q4, as well as an anticipated sizable foreign exchange headwind when converted to Swiss Francs in the fourth quarter.

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% and an adjusted EBITDA margin at the upper end of its previous expected range of 16.0 - 16.5%.

Other than with respect to IFRS net sales and gross profit margin, On only provides guidance on a non-IFRS basis. The Company does not provide a reconciliation of forward-looking adjusted EBITDA to IFRS net income due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. As a result, we are not able to forecast with reasonable certainty all deductions needed in order to provide a reconciliation to net income. The above outlook is based on current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below and in our filings with the U.S. Securities and Exchange Commission (the "SEC").

High-res images and videos are available for download here and here.

Conference Call Information

A conference call to discuss third quarter results is scheduled for November 12, 2024 at 8 a.m. U.S. Eastern time (2 p.m. Central European Time). Those interested in participating in the call are invited to dial the following numbers

 

United States: +1 646 307 19 63

United Kingdom: +44 203 481 42 47

Switzerland: +41 43 210 51 63

 

Conference ID: 4064831

 

Additionally, a live webcast of the conference call will be available on the Company's investor relations website and under the following link. Following the conclusion of the call, a replay of the conference call will be available on the Company's website.

 

 

About On

On was born in the Swiss Alps in 2010 with the mission to ignite the human spirit through movement – a mission that still guides the brand today. Fourteen years after market launch, On delivers industry-disrupting innovation in premium footwear, apparel and accessories for high-performance running, outdoor, training, all-day activities and tennis. On’s award-winning CloudTec® innovation, purposeful design and groundbreaking strides within the circular economy have attracted a fast-growing global fan base – inspiring humans to explore, discover and Dream On.

On is present in more than 60 countries globally and engages with a digital community on www.on.com.