On August 13, before the market opened, the Swiss sports brand On released its financial results for the second quarter and the first half of 2024. In Q2, On’s net sales increased by 27.8% year-on-year to CHF 567.7 million (up 29.4% at constant exchange rates), setting a new record for quarterly sales and driving a 24.4% year-on-year increase in net sales for the first half of the year to CHF 1.0759 billion (up 29.3% at constant exchange rates).
Notably, On’s net sales over the past 12 months exceeded CHF 2 billion.
On stated that the strong performance reflects the brand’s multi-channel strategy across regions and products, with the Asia-Pacific region and the apparel category standing out, with sales growth of 73.7% and 63.0%, respectively.
Sales in the Asia-Pacific region, led by the Chinese Mainland, surged by 73.7% year-on-year to CHF 59.2 million, far outpacing the Americas (+24.8%) and Europe, the Middle East, and Africa (EMEA) (+21.8%). The region’s contribution to the brand’s overall sales increased to 10.4%, up from 7.7% in the same period last year.
During a conference call following the earnings release, On’s Co-CEO and CFO Martin Hoffmann acknowledged that the growth in the Asia-Pacific region was driven by the continued strong momentum in the Chinese market, long queues at stores in Japan, and record sales in emerging markets such as Indonesia and the Philippines. Additionally, a few weeks ago, On opened its first store in Hong Kong, which has performed beyond expectations. “In the Asia-Pacific market, demand for our products is clearly outstripping supply.”
“In the past year, we have expanded with 25 new stores in the Chinese market and 12 new stores outside of China. We are seeing that our stores in China are meeting local demand.”
On’s Co-Founder and Executive Co-Chairman David Allemann said, “This summer, we are full of confidence and very excited about On’s growth trajectory. Over the past few months, we have launched several important long-term initiatives, such as a multi-year partnership with film star Zendaya, breakthrough innovations like LightSpray™ technology, and the opening of our largest retail store to date in Paris. These significant milestones are the result of our motto ‘Dream On,’ as we strive to achieve long-term success driven by innovation.”
Martin Hoffmann added that On has been filled with exciting brand moments over the past weeks and months, laying the foundation for the brand’s future development. “These moments have been made possible by the dedication and passion of the entire team. Recent positive feedback and reports have fueled our ambitions, and we will continue to innovate, providing exceptional products and experiences for our global fans. We are delighted to see the brand’s strong momentum across all channels, regions, and product lines, as evidenced by the strong performance in the first half of 2024.”
Driven by its strong performance, On’s stock price rose by 4.35% to $41.27 per share on August 13, with a total market capitalization of $12.6 billion, marking a 19.45% increase over the past year.
Key financial data for On in Q2 2024:
- Gross profit margin reached 59.9% in Q2 2024, up from 59.5% in the same period last year, due to continued high full-price sales and lower freight costs.
- Net profit and adjusted EBITDA reached CHF 30.8 million and CHF 90.8 million, respectively, reflecting On’s improved profitability.
By category:
By market:
By channel:
Looking ahead, On reiterated its full-year targets for 2024, based on strong brand demand and significant brand-building moments in recent months. These include:
- Expected full-year net sales of CHF 2.26 billion, with growth of over 30% at constant exchange rates
- Gross profit margin expected to reach around 60%
- Adjusted EBITDA profit margin expected to be between 16.0% and 16.5%
Additionally, On indicated that the focus in the coming months will be on successfully advancing the brand’s warehouse automation project in the United States, with the aim of expanding On’s distribution capacity in North America in the medium term.
| Source: Official financial report; conference call
| Image Credit: Brand’s official website
| Editor: LeZhi
