ONON stock fell more than 13% in U.S. premarket trading by 05:12 ET after On Holding reported second-quarter revenue of CHF 850.3 million, below the CHF 881.4 million estimate. The shares moved even though the company beat earnings expectations and kept its full-year sales outlook. For shareholders, the immediate issue is not profitability, but whether the revenue shortfall points to slower demand than the market had priced in.
CHF 0.31 EPS beats estimate
CHF 0.31 in second-quarter EPS topped the CHF 0.29 analyst estimate, giving On Holding a cleaner bottom-line result than the stock reaction suggests. Revenue still rose 21.6% on a constant currency basis, but the miss on sales was enough to outweigh that growth in trading. The gap tells investors the quarter was not weak across every line, yet it did not clear the bar that mattered most for the stock.
34.3% constant-currency growth in the direct-to-consumer channel led the quarter, while apparel net sales surged 56.2% on the same basis. Asia-Pacific contributed more than 20% of global net sales, showing the quarter was supported by several growth engines even as total revenue landed below expectations. That combination usually points to a business still expanding, but one where wholesale or other slower areas can pull the total below consensus.
CHF 168.1 million EBITDA margin
CHF 168.1 million in Adjusted EBITDA came alongside a 19.8% margin, up from 18.2% a year earlier. Gross profit margin reached 65.4%, a gain of 3.9 percentage points year over year, even after On fully absorbed higher U.S. import tariffs and excluded any tariff refunds. Those figures show the company protected profitability while the top line missed, which is why the selloff is tied to growth expectations rather than margin pressure.
65.0% is the full-year gross profit margin floor On now expects, and its adjusted EBITDA margin guide remains in the 19.5% to 20.0% range. The company also kept its net sales growth outlook in the low-20% range on a constant currency basis, implying CHF 3.47 billion to CHF 3.56 billion at current spot rates versus a CHF 3.56 billion consensus estimate. If that upper end holds, the second half has to do the heavy lifting; if not, the market will keep focusing on how quickly sales can reaccelerate after the quarter’s miss.
