On Holding AG's net profit has finally returned to growth. On May 12th, the company released its Q1 2026 financial report, showing net sales of CHF 832 million, a year-on-year increase of 14.5%. Net profit reached CHF 103 million, a significant year-on-year surge of 82.2%. This contrasts with Q1 and the full year 2025, during which the company's net profit was in decline.
Facing performance pressures, On Holding AG announced a CEO change just before the end of the first quarter, with a co-founder returning to take the reins. It is noteworthy that while Q1 2026 net profit resumed growth, the pace of net sales growth has slowed. Furthermore, the Asia-Pacific region, which has been the core growth engine for On in recent years, saw its Q1 net sales grow by 44.4% year-on-year. Although still robust, this represents a significant deceleration from the 96.4% growth rate for the full year 2025. Consequently, the strategic direction under the returning founder is drawing significant market attention.
The Asia-Pacific region's performance growth has moderated. On Holding AG delivered a mixed financial report card for Q1 2026. While the company achieved rapid net profit growth of 82.2%, the 14.5% year-on-year increase in net sales shows a slowing trend compared to the 40% year-on-year growth in the same period of 2025.
On Holding AG is a Swiss sports brand centered on running, founded in 2010 by a former triathlon world champion. Leveraging its singular running shoe category, On has achieved leapfrog growth in net sales in recent years. In 2020, its net sales were merely CHF 425 million; by 2025, they surpassed the CHF 3 billion mark for the first time, reaching CHF 3.014 billion, a 30% increase year-on-year, representing growth of over 600% in five years. However, in 2025, the company's net profit faced pressure, decreasing by 15.9% year-on-year to CHF 204 million.
In On's rapid growth trajectory, the Chinese market has played a crucial and undeniable role. On's footwear products are generally priced between CNY 1,000 and 2,000, targeting mid-level consumers. Alongside Salomon and HOKA, they are dubbed the "Three Treasures for the New Middle Class." The company operates in three major regional markets: the Americas; Europe, the Middle East, and Africa (EMEA); and Asia-Pacific. From 2023 to 2025, net sales for the Asia-Pacific region, which includes China, were CHF 141 million, CHF 260 million, and CHF 511 million, respectively, with year-on-year growth rates of 75.9%, 84.5%, and 96.4%. This growth rate consistently led all three regions.
In its 2025 annual report, On also stated, "The APAC region has developed into one of the most dynamic growth engines, with China's market structure allowing us to have a larger store network than in other regions. We expect the APAC region, and especially China, to continue to account for a significant share of our global retail business and be a key driver of future growth."
On May 15th, On's China operations responded, stating, "Currently, On has entered approximately 30 cities in China. By the end of this year, the number of stores in the Chinese market is expected to reach about 100. This includes both directly operated stores and those operated by distributors and partners."
However, in Q1 2026, the growth rate of On's Asia-Pacific net sales slowed significantly compared to the previous two years. The region's revenue for the quarter was CHF 174 million, a 44.4% year-on-year increase. In Q1 of 2024 and 2025, the region's year-on-year growth rates were 68.6% and 130.1%, respectively.
An analysis suggests, "On primarily focuses on first- and second-tier markets in China but has shortcomings in penetrating lower-tier markets. Currently, On's expansion in first- and second-tier markets is gradually reaching a bottleneck, creating an urgent need to seek growth from下沉 markets. Furthermore, On faces challenges in transitioning from an internet-famous brand to a professional brand and strengthening its localization strategy. For On, these adjustments are crucial for its long-term development in the Chinese market."
On the eve of the quarter's end, On also underwent a change in senior leadership. On March 25th, On announced that to drive the next phase of global expansion, co-founders David Allemann and Caspar Coppetti would assume the roles of Co-CEOs, while Scott Maguire was promoted to President and Chief Operating Officer. After 13 successful years at On, Martin Hoffmann chose to step down from the CEO role. In April 2025, Co-CEO Marc Maurer announced his departure. Within a year, two professional managers have left, and the founders have returned to lead.
"From this personnel change, it's evident that shareholders and the board are dissatisfied with the management's performance, hence the decision to take direct control. This reflects the company's urgency to accelerate its layout and pace in the current fiercely competitive environment, though challenges remain significant," the analysis stated.
Another expert added, "When a company begins adjusting its management, especially with founders returning, it essentially means they have sensed pressure from future risks. The founders' return is fundamentally due to concerns about future unpredictability, believing early intervention is necessary."
Running shoes have always been On's absolute core. In Q1 2026, over 90% of the company's net sales came from footwear products. However, the slowing growth of this category has become an undeniable fact. From 2023 to 2025, the year-on-year growth rates for On's footwear net sales were 46.6%, 28.5%, and 27.5%, respectively. In Q1 2026, net sales for this category were CHF 764 million, a year-on-year increase of 12.2%.
Under these circumstances, over the past two to three years, On has been expanding from a single running shoe category towards a full sports product line, including tennis, outdoor, and athleisure. In its 2025 annual report, On mentioned that entering the tennis and training categories significantly expanded its total addressable market. It also noted efforts to build On into a complete sportswear brand, offering consumers integrated head-to-toe outfit choices.
In Q1 2026, On's apparel and accessories product net sales grew by 45.1% and 70.7% year-on-year, respectively, outpacing the growth of footwear.
However, as a brand renowned for running shoes, does developing products in other areas risk blurring its brand positioning? Analysis suggests, "On started in the running niche and now wants to expand into full-scenario sports categories, facing the dilemma of not being able to have it both ways. The challenge is immense: expanding scale while maintaining professionalism. Expanding categories does not mean professional capabilities naturally extend; other niche brands are also growing. Large-scale expansion carries high risks; the future will depend on capital investment and the ability to grasp different scenarios over the next three to five years."
In this view, On's current situation is quite similar to Lululemon's, which moved from a professional yoga brand to full-scenario but never abandoned its yoga core. Similarly, for On to enhance its business scale and capabilities, it may need to further strengthen its core running segment; otherwise, it risks being divided by other brands in this foundational area.
Another expert stated, "When the entire sports market gradually touches a ceiling and global growth continues to slow, companies that rely on a single brand becoming an internet-famous or blockbuster product face heightened risks if they attempt to find long-term relevance in the market by expanding categories or influence."
Regarding On's subsequent development strategy for the Chinese market, On China responded, "We are entering new first-tier cities, second-tier cities, and first-tier cities. Essentially, we are going where the consumers are, connecting with them, building communities, and helping everyone understand why, as a brand, we are so passionate about 'sport'." On China mentioned hosting over 1,000 community events in 2025, with plans to increase this number in 2026, both globally and in China, to establish genuine connections with consumers.
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