On Holding AG (NYSE:ONON) stock rose 0.45% (As on May 15, 11:23:59 AM UTC-4, Source: Google Finance) after the company raised its annual sales forecast, after beating expectations for the first quarter, as the sportswear maker’s focus on selling premium-priced products and bringing in newer items helped attract customers. On has launched several products such as Cloudmonster 2, Cloudspark and Cloudsurfer Trail this year in the running and performance shoe category and is expanding into training and tennis footwear segments. The company aims to open more directly owned stores as demand remains strong even at elevated price levels compared to bigger brands. On’s direct-to-consumer net sales rose 39% to CHF 190.5 million and represented 37.5% of total net sales. Gross profit rose 23.9% to CHF 303.3 million, while gross profit margin increased to 59.7% from 58.3%, it reported. Net income grew 106.0% to CHF 91.4 million and net income margin expanded to 18.0% from 10.6%. On’s adjusted EBITDA margin increased to 15.2% from 14.5%, and its adjusted net income grew to CHF 106.5 million. Further, Asia Pacific region showing exceptional performance with a 68.6% YoY growth in net sales. Americas business up by 22% YoY, with Latin American sales doubling.
Meanwhile, major sportswear companies have been grappling with dwindling sales after wholesalers in the U.S. and Europe started to cut back on inventory as higher costs of living limited customer spending on pricey footwear and apparel. But wholesale retailers have opened up shelf spaces for upstart brands such as On and Deckers Outdoor’s Hoka, which have emerged successful and been able to pull in customers through innovative product lines at a time when name brands like Nike and Adidas are taking a hit.
ONON in the first quarter of FY 24 has reported the adjusted earnings per share of CHF 0.33, beating the analysts’ estimates for the adjusted earnings per share of CHF 0.14, according to LSEG estimates. The company had reported the adjusted revenue growth of 20.9 percent to CHF 508.2 million in the first quarter of FY 24, beating the analysts’ estimates for revenue of CHF 497.4 million.
On expects full-year 2024 reported net sales of at least CHF 2.29 billion ($2.52 billion), versus CHF 2.25 billion forecast earlier. The company also anticipates maintaining a gross profit margin of around 60% and achieving an adjusted EBITDA margin between 16.0% and 16.5%.