Shares of On Holding AG dropped 20% after earnings as investors reacted negatively to weaker-than-expected wholesale sellout performance in the Americas and concerns over decelerating demand in a key channel, despite strong direct-to-consumer growth and maintained margin targets.
- Net sales grew 22% at constant currency to CHF 850 million, driven by robust 34% growth in the direct-to-consumer channel across all regions.
- Gross profit margin remained elevated above 65%, with adjusted EBITDA margin close to 20%, reflecting ongoing operational efficiency.
- Wholesale channel underperformed due to lower-than-anticipated sellout of everyday running franchises, especially in the Americas, amid a promotional multi-brand environment.
- Management emphasized disciplined sell-in to wholesale to protect full-price integrity and avoid channel inventory buildup, accepting slower top-line growth there.
- Full-year guidance reaffirmed at low 20s percentage net sales growth and sustained margin targets, but cautious tone on wholesale momentum likely weighed on market sentiment.
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