On May 12, Swiss premium sports brand On Holding AG released its first-quarter financial report for the period ending March 31, 2026.
The financial data shows that during the period, On Holding AG's net sales reached 831.9 million Swiss francs, a year-on-year increase of 14.5%, marking the first time quarterly revenue has surpassed the 800 million Swiss franc threshold. When calculated at constant exchange rates, the actual growth rate was as high as 26.4%. Net profit rose significantly by 82.2% year-on-year to 103.3 million Swiss francs; adjusted net profit reached 123.6 million Swiss francs.
Based on the first-quarter profit performance, On Holding AG raised its profit margin guidance for the 2026 fiscal year.
Against the backdrop of overall pressure in the global sports consumer market, On Holding AG maintained its growth foundation through full-price strategies and adjustments to its product structure. However, the slowdown in its largest single market, North America, and uncertainties arising from tariff policies remain variables that require ongoing attention.
The most critical data in this quarter's report points to a significant improvement in profitability metrics. The data shows that On Holding AG's first-quarter gross profit reached 534.3 million Swiss francs, a year-on-year increase of 22.8%; the gross margin jumped from 59.9% in the same period last year to 64.2%, an increase of 430 basis points.
The substantial expansion of the gross margin is primarily attributed to adjustments in three business areas:
First, the strict implementation of a full-price sales strategy, with restrained discounting and promotional policies reducing erosion of profits and maintaining the brand's premium positioning.
Second, a decline in air freight costs and favorable exchange rate factors contributed to cost-side optimization.
Third, an increase in the proportion of the direct-to-consumer (DTC) channel.
Additionally, adjusted EBITDA increased by 45.4% year-on-year to 174.3 million Swiss francs, with the EBITDA margin rising to 21.0%.
It is noteworthy that this level of profitability was achieved while absorbing existing external cost pressures.
Management explicitly mentioned in the report that some of the company's products imported from Vietnam to the United States currently face a 20% incremental tariff. However, the brand's pricing power and improvements in supply chain operational efficiency partially offset this negative impact.
On the channel front, On Holding AG is attempting to find a balance between expanding market reach and maintaining brand positioning.
In the first quarter, its DTC net sales increased by 16.4% year-on-year to 322.3 million Swiss francs; wholesale channel net sales grew by 13.3% to 509.6 million Swiss francs.
The DTC growth rate continued to outpace the wholesale channel, reflecting the company's strategic tilt towards channel control.
In recent years, to avoid over-reliance on distribution networks leading to pricing system confusion, On Holding AG has implemented strict screening and partial contraction of wholesale channels in some mature markets, shifting investment towards company-owned stores and the brand's official website.
This DTC-led operational model, while requiring higher upfront costs for offline store construction and marketing expenses, is conducive to improving per-store efficiency and enhancing overall gross margin space from a long-term financial model perspective.
In terms of regional performance, divergence trends across global markets are quite evident.
The Asia-Pacific market became the strongest growth engine this quarter. Data shows that Asia-Pacific first-quarter net sales surged by 44.4% year-on-year to 174 million Swiss francs, accounting for over 20% of total revenue. Within this, the Chinese market achieved double-digit high growth, with apparel category penetration as high as 30%, far exceeding the company's global average of approximately 6%.
The Europe, Middle East, and Africa region performed steadily, with net sales growing 22.8% to 207.1 million Swiss francs. However, the Americas region, On Holding AG's largest single market, saw net sales increase only slightly by 3.1% to 450.7 million Swiss francs. The significant slowdown in North American market growth is directly related to weak demand for sporting goods in the region and intense competition from brands like Nike and Hoka.
In terms of category performance, the core footwear business remains the foundation, with first-quarter sales of 763.7 million Swiss francs, a year-on-year increase of 12.2%.
Simultaneously, the apparel business demonstrated the potential of a second growth curve, with sales surging 45.1% during the period to 55.3 million Swiss francs. The expansion of the apparel category not only broadens the brand's usage scenarios, extending from professional running to daily commuting and lifestyle, but also provides stores with richer opportunities for product cross-selling.
Based on the first-quarter financial performance, On Holding AG maintained its expectation for full-year 2026 fiscal year net sales growth of at least 23% at constant exchange rates.
Converted at current exchange rates, full-year revenue is projected to be at least 3.51 billion Swiss francs. Regarding profit expectations, the company raised its full-year gross margin guidance to at least 64.5%, while maintaining its adjusted EBITDA margin expectation range between 19.5% and 20.0%.
From a business fundamentals perspective, On Holding AG remains in a global expansion phase, delivering a high-quality quarterly profit report.
However, objective risks also exist: on one hand, U.S. market tariff policies may continue to exert pressure on future supply chain costs; on the other hand, as of the end of the first quarter, the company's net working capital increased by 14.1% year-on-year to 650.8 million Swiss francs.
Against the backdrop of slowing growth in core regional markets, how to maintain healthy inventory turnover rates globally and prevent inventory backlog risks will be a core challenge testing management's operational capabilities going forward.
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