On Holding is gearing up for the Olympics and, in the midst of a global boom in running, is preparing to take a higher profile with a new store on the Champs-Elysees slated to open next month.
The news comes as the trendy Swiss running shoe brand continued its strong momentum, surpassing 500 million Swiss francs in sales for the first time in the first quarter ended March 31. In reporting the results Tuesday, the Stockholm-based brand said it achieved sales of 508.2 million Swiss francs, a 20.9 percent increase, or a 29.2 percent jump on a constant currency basis, over the same period last year.
Net income increased by 106 percent to 91.4 million Swiss francs from 44.4 million in the prior year. Adjusted earnings before interest, taxes, depreciation and amortization rose 27 percent to 77.4 million Swiss francs from 61 million the year before.
The gains were led by strong demand in the company’s direct-to-consumer channel where sales rose 39 percent in the quarter, or 48.7 percent on a constant currency basis. DTC sales now make up 37.5 percent of On’s total volume.
Martin Hoffmann, co-chief executive officer and chief financial officer, told FN the DTC gains came primarily from the digital channel, but sales at its 50 stores globally also contributed to the gains. On will continue to roll out stores in the second quarter, with units in Milan and Austin, Tex., expected to open next month in addition to the Champs-Elysees unit, which will be its second store in Paris. “We’re growing our network,” Hoffmann said.
He said the company also launched its first commercial app globally in the quarter as well.
But it wasn’t just On’s DTC sales that were strong in the period. Wholesale sales increased 12.2 percent to 317.7 million Swiss francs, and by region, net sales in the Americas, the brand’s largest region, rose 22 percent to 329.6 million Swiss francs, while in Europe, they increased 6.1 percent to 126.2 million Swiss francs. The Asia-Pacific region jumped 68.6 percent to 52.4 million Swiss francs.
By category, sales of shoes rose 21 percent to 484.7 million Swiss francs, while apparel sales increased 16.7 percent to 19.7 million francs, and accessories were up 36.8 percent to 3.8 million francs.
Hoffmann said apparel is “growing very strongly” in On’s DTC channels and he’s expecting those numbers to increase even more as the first collections from Tim Coppens, its creative director for apparel, hit the market this month. Coppens, who had his own menswear collection and also designed a high-end line for Under Armour for a short period, joined On about one year ago.
“We didn’t have the right people in apparel,” Hoffmann admitted. “But Tim brings a totally new level to the company and we built a team around him.” He said Coppens just staged an internal fashion show for the company at its headquarters of the spring/summer ’25 collection, and it was quite impressive, leading to further optimism for the category.
In addition to apparel, Hoffmann said On also posted strong sales with the Cloudmonster running shoe, Cloudsurfer and Cloudrunner running shoes, where is is “gaining market share.” He also pointed to the Cloudtilt “performance all day” lifestyle shoe that launched as a collaboration with Loewe for a lifestyle shoe and has since been expanded to other iterations. Hoffmann said the demand was higher than the supply for those shoes.
He also singled out the “shoe count,” where On visits key running routes around the world to count the number of shoes on runners’ feet versus other brands. On running routes in key cities such as Tokyo and Berlin and across the U.S., he said, On now has a 10 percent share.
Looking at the quarter as a whole, Hoffmann said it marked “a very strong start to the year and a further step in the execution of our long-term strategy to be the most premium global sportswear brand. We are thrilled to have exceeded our expectations and surpassed the half-billion net sales mark in a single quarter. This serves as a validation of the strong demand we have experienced across all channels, regions, and product categories. Notably, we see the strength in our DTC channel as a clear marker of the ongoing strong brand momentum. The significantly increased DTC share has also allowed us to reach a very strong gross profit margin in the first quarter, close to the mid-term target we laid out a couple of months ago. Looking ahead, we’re extremely excited for the months to come, filled with groundbreaking innovations, big partnerships, and the opportunity to have a notable impact in Paris this summer.”
He added that with two stores in Paris, On will “hopefully be a hub” for shoppers during the Games. At the Olympics, he said more than two dozen On-sponsored athletes, including Hellen Obiri, who won the Boston Marathon last month, are expected to compete in a variety of sports and the brand will be sharing their “inspirational stories” as well as some new products before the Opening Ceremonies.
“The Olympics will be a big moment for us,” he said. “They’re close to home and for the first time, we’re ready to shine.”
Caspar Coppetti, cofounder and executive co-chairman, added: “We are starting 2024 with very high confidence and a whole lot of excitement, achieving record net sales and profitability in the first quarter. Hellen Obiri’s win at the marathon in Boston highlights our team’s relentless dedication to delivering cutting-edge and sustainable innovations to athletes and consumers alike. These are the achievements that strengthen On’s performance credibility, and they continue to fuel our increasing market share at key running routes around the globe. We are eagerly looking ahead to the remainder of the year with many more athlete success stories to come, as well as being laser-focused on the premium execution of our strategic priorities.”
As a result of the strong showing, On reiterated its full-year expectation of at least 30 percent growth in net sales on a constant currency basis with a goal of reaching at least 2.29 billion Swiss francs in 2024. In addition, On also expects to reach a gross profit margin of around 60 percent on an adjusted EBIDTA margin of 16 percent to 16.5 percent for the full year.
