On Reports Results for the Second Quarter and Six-Month Period Ended June 30, 2024
- On achieves another record top-line quarter, resulting in over CHF 2 billion net sales for the last twelve month period. On's total net sales in Q2 2024 reached CHF 567.7 million, a growth of 27.8% year-over-year and of 29.4% on a constant currency basis. These results reflect the strength of On's multi-channel strategy across regions and products, with stand-out performances in Asia-Pacific and in apparel, growing by 73.7% and 63.0%, respectively.
- As a result of On's continued high share of full-price sales as well as lower freight rates, its second quarter 2024 gross profit margin reaches 59.9%, up from 59.5% in the prior year period. On's increased profitability is further reflected in the significant net income and adjusted EBITDA expansion versus the same period in the prior year, reaching CHF 30.8 million and CHF 90.8 million, respectively.
- Based on the high demand for the On brand, further fueled by big brand-building moments over the past months, On reiterates its stated goals for the full year 2024. This includes the expectation to reach a full year constant currency growth rate of at least 30%, corresponding to reported net sales of CHF 2.26 billion at current spot rates. On further continues to expect a gross profit margin of around 60% and an adjusted EBITDA margin in the range of 16.0 - 16.5% for the full year 2024.
- On continues to shape its vision to be the most premium global sportswear brand, rooted in performance, design and sustainability. In the past few weeks, On unveiled its groundbreaking LightSpray™ technology, announced its long-term partnership with Zendaya and celebrated exceptional performances by On athletes. True to On's multi-channel strategy, which includes expanding its own retail store footprint, the recent weeks also saw the opening of new On stores in Paris and Hong Kong.
ZURICH, Switzerland, August 13, 2024 - On Holding AG (NYSE: ONON) (“On,” “On Holding AG,” the “Company,” “we,” “our,” “ours,” or “us”), has announced its financial results for the second quarter and six-month period ended June 30, 2024.
David Allemann, Co-Founder and Executive Co-Chairman of On, said: “We are coming out of the summer with a lot of confidence and are extremely excited about On's trajectory. Over the past months, we have launched important long-term initiatives such as our multi-year partnership with Zendaya, groundbreaking innovations like the LightSpray™ technology and the opening of our Paris store, our largest own retail location yet. These significant milestones are an outcome of our mantra - Dream On - a commitment to pursue the most daring dreams to achieve long-term, innovation-led success, and we are thrilled to build on these milestones during the years ahead."
Martin Hoffmann, Co-CEO and CFO of On, said: “The past weeks and months have been filled with exciting brand moments for On and it is clear that we have laid the groundwork for what we believe will shape On for many years to come. These moments are only possible thanks to the dedication and passion of the entire On team. The wave of recent positive feedback and coverage fuels our ambition to continue to innovate and deliver exceptional products and experiences to our fans worldwide. We are very pleased to see the ongoing strong momentum of the On brand across channels, regions and products, as evidenced in our very strong results in the first half of 2024."
Second Quarter 2024 Financial and Operating Metrics
Key highlights for the three-month period ended June 30, 2024 compared to the three-month period ended June 30, 2023 include:
- net sales increased by 27.8% to CHF 567.7 million, or by 29.4% on a constant currency basis;
- net sales through the direct-to-consumer ("DTC") sales channel increased by 28.1% to CHF 209.4 million, or by 30.4% on a constant currency basis;
- net sales through the wholesale sales channel increased by 27.6% to CHF 358.2 million, or by 28.8% on a constant currency basis;
- net sales in Europe, Middle East and Africa (“EMEA”), Americas and Asia-Pacific increased by 21.8% to CHF 138.4 million, 24.8% to CHF 370.0 million and 73.7% to CHF 59.2 million, respectively;
- net sales in EMEA, Americas, and Asia-Pacific increased by 22.2%, 25.8% and 84.7% on a constant currency basis, respectively;
- net sales from shoes, apparel and accessories increased by 26.7% to CHF 542.5 million, 63.0% to 21.9 million and 23.6% to 3.3 million, respectively;
- net sales from shoes, apparel and accessories increased by 28.2%, 66.6%, 26.3% on a constant currency basis, respectively;
- gross profit increased by 28.6% to CHF 340.2 million from CHF 264.5 million;
- gross profit margin increased to 59.9% from 59.5%;
- net income increased by 834.3% to CHF 30.8 million from CHF 3.3 million;
- net income margin increased to 5.4% from 0.7%;
- basic earnings per share (“EPS”) Class A (CHF) increased to 0.10 from 0.01;
- diluted EPS Class A (CHF) increased to 0.09 from 0.01;
- adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") increased by 44.7% to CHF 90.8 million from CHF 62.7 million;
- adjusted EBITDA margin increased to 16.0% from 14.1%;
- adjusted net income increased to CHF 46.9 million from CHF 11.7 million;
- adjusted basic EPS Class A (CHF) increased to 0.15 from 0.04; and
- adjusted diluted EPS Class A (CHF) increased to 0.14 from 0.04.
Key highlights for the six-month period ended June 30, 2024 compared to the six-month period ended June 30, 2023 include:
- net sales increased by 24.4% to CHF 1,075.9 million; or by 29.3% on a constant currency basis;
- net sales through the DTC sales channel increased by 33.1% to CHF 399.9 million, or by 38.7% on a constant currency basis;
- net sales through the wholesale sales channel increased by 19.8% to CHF 675.9 million, or by 24.3% on constant currency basis;
- net sales in EMEA, Americas and Asia-Pacific increased by 13.9% to CHF 264.6 million, 23.4% to CHF 699.7 million and 70.5% to CHF 111.6 million, respectively;
- net sales in EMEA, Americas, and Asia-Pacific increased by 16.3%, 28.0% and 86.8% on a constant currency basis, respectively;
- net sales from shoes, apparel and accessories increased by 23.9% to CHF 1,027.1 million, 37.2% to CHF 41.6 million and 30.3% to CHF 7.1 million, respectively;
- net sales from shoes, apparel and accessories increased by 28.8%, 43.1%, 36.3% on a constant currency basis, respectively;
- gross profit increased by 26.3% to CHF 643.6 million from CHF 509.4 million;
- gross profit margin increased to 59.8% from 58.9%;
- net income increased by 156.5% to CHF 122.2 million from CHF 47.7 million;
- net income margin increased to 11.4% from 5.5%
- basic EPS Class A (CHF) increased to 0.38 from 0.15;
- diluted EPS Class A (CHF) increased to 0.37 from 0.15;
- adjusted EBITDA increased by 36.0% to CHF 168.2 million from CHF 123.7 million;
- adjusted EBITDA margin increased to 15.6% from 14.3%;
- adjusted net income increased to CHF 153.4 million from CHF 60.5 million;
- adjusted basic EPS Class A (CHF) increased to 0.48 from 0.19; and
- adjusted diluted EPS Class A (CHF) increased to 0.47 from 0.19.
Key highlights as of June 30, 2024 compared to December 31, 2023 included:
- cash and cash equivalents increased by 32% to CHF 652.4 million from CHF 494.6 million; and
- net working capital increased by 14.3% to CHF 567.1 million from CHF 496.2 million.
Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic EPS, adjusted diluted EPS, net working capital and net sales on a constant currency basis are non-IFRS measures used by us to evaluate our performance. Furthermore, we believe these non-IFRS measures enhance investors' understanding of our financial and operating performance from period to period because they enhance the comparability of results between each period, help identify trends in operating results and provide additional insight and transparency on how management evaluates the business. Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted basic EPS, adjusted diluted EPS, net working capital and net sales on a constant currency basis should not be considered in isolation or as a substitute for other financial measures calculated and presented in accordance with IFRS. For a detailed description and a reconciliation to the nearest IFRS measure, see the section below titled “Non-IFRS Measures.”
Outlook
On has experienced a very strong first half of 2024, with two consecutive record top-line quarters and continued strong demand across channels, regions and product categories. From highly successful product launches and groundbreaking innovations to athlete success stories and authentic brand partnerships, On has further ignited its brand momentum in the first six months of 2024 with various initiatives that are converting to higher brand awareness and inspiring fans to Dream On.
As a result, On is reiterating its full year expectation of at least 30% net sales growth on a constant currency basis. Considering the recent strength of the Swiss Franc and assuming spot rates persist at current levels for the remainder of the year, this implies reported net sales of at least CHF 2.26 billion in 2024 and the continuation of On's strong momentum in the second half of the year. Additional focus over the next months will be placed on successfully advancing On's warehouse automation project in the U.S., with a view towards scaling On's distribution capabilities in North America over the medium term.
Considering the results in the first half of 2024, On additionally remains well on track to reach its profitability ambitions for the full year, and expects to achieve a gross profit margin of around 60% and an adjusted EBITDA margin of 16.0 - 16.5%.
Other than with respect to IFRS net sales and gross profit margin, On only provides guidance on a non-IFRS basis. The Company does not provide a reconciliation of forward-looking adjusted EBITDA to IFRS net income due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. As a result, we are not able to forecast with reasonable certainty all deductions needed in order to provide a reconciliation to net income. The above outlook is based on current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of risks and uncertainties, including those stated below and in our filings with the U.S. Securities and Exchange Commission (the "SEC").
High-res images available for download here.
Conference Call Information
A conference call to discuss second quarter results is scheduled for August 13, 2024 at 8 a.m. U.S. Eastern time (2 p.m. Central European Time). Those interested in participating in the call are invited to dial the following numbers:
United States: +1 646 307 19 63
United Kingdom: +44 203 481 42 47
Switzerland: +41 43 210 51 63
Conference ID: 3575796
Additionally, a live webcast of the conference call will be available on the Company's investor relations website and under the following link. Following the conclusion of the call, a replay of the conference call will be available on the Company's website.
About On
On was born in the Swiss Alps in 2010 with the mission to ignite the human spirit through movement – a mission that still guides the brand today. Fourteen years after market launch, On delivers industry-disrupting innovation in premium footwear, apparel and accessories for high-performance running, outdoor, training, all-day activities and tennis. On’s award-winning CloudTec® innovation, purposeful design and groundbreaking strides within the circular economy have attracted a fast-growing global fan base – inspiring humans to explore, discover and Dream On.
On is present in more than 60 countries globally and engages with a digital community on www.on.com.