On Holding grows sales 17.2% to CHF 931.4 million and holds full price

On Holding grew sales 17.2 percent year over year to 931.4 million Swiss francs, or $1.1 billion at current exchange, for the period ended Sept. 30. Net income climbed 36.9 percent to 162.8 million francs at the Zurich-based running brand.

Gross profit rose 29.5 percent to 676 million francs, lifting the gross margin to 72.6 percent, up from 65.7 percent a year earlier. Caspar Coppetti, founder and co-chief executive officer, said On held full price in a promotional market and delivered record underlying margins.

How the quarter broke down

Direct-to-consumer sales rose 25 percent to 393.3 million francs, while wholesale increased 12.2 percent to 538.2 million francs. The Americas brought in 490.1 million francs on 12.4 percent growth, and Europe, the Middle East and Africa reached 251.4 million francs after a 17.9 percent rise.

Asia-Pacific grew fastest, up 31.1 percent to 189.9 million francs. By category, shoes rose 15.4 percent to 843.7 million francs, apparel rose 38.7 percent to 69.5 million francs, and accessories gained 39.2 percent to 18.1 million francs. Adjusted EBITDA increased 42.7 percent to 256.8 million francs.

Frank Sluis, the chief financial officer, said premium is "the mechanism" in the financial model, not an adjective. Products consumers choose at full price, a higher share of sales through On's own channels and the efficiencies of scale produced the margin, he said, even before tariff refunds.

Sluis said that margin pays for innovation, technology, stores and new sports behind a three-year plan. The company projects $7 billion in yearly revenue by 2029. Coppetti said the Cloudsurfer 3 is the first proof point of what he called On's biggest innovation cycle.

Shelton leaves, Mbappé arrives

On confirmed on Monday that the American tennis player Ben Shelton, ranked number four, will leave at the beginning of the year, reportedly for New Balance. The company said the proposed terms and structure for continuing were no longer the right fit.

On said it is proud of four years with Shelton on and off the court, and that tennis partnerships remain a core pillar. Roger Federer is an investor and ambassador, and Iga Swiatek, the top-ranked woman, also has a deal with the brand.

Soccer is also seen as a key opportunity, and golf is planned for launch next year. In September On signed Kylian Mbappé as the face of the new category, with Thierry Henry as director. Mbappé had a relationship with Nike spanning two decades.

Mbappé ran afoul of Chinese consumers over an off-handed comment referring to a Chinese dictator, believed to be Mao Zedong. He later apologised, but the remark drew significant backlash in China. On still cited strong momentum in its three growth engines.

In performance running, the Cloudsurfer 3 has sold out in early releases at specialist running shops. In lifestyle run, the Cloudtilt is among the industry's fastest-growing sneaker franchises, and Sluis said it has attracted more young people to the brand.

Women's apparel outpaced men's, helped by the latest Zendaya collection, a python print that On calls its most visible apparel launch yet. Apparel today is around 300 million francs, and Sluis said the goal is 1 billion, when it becomes a meaningful part of the business.

At the recently opened store in Bondi, Australia, On took an apparel-first approach, and 30 percent of sales there come from that category. Sluis added that next year the superfoam technology will be offered across the entire portfolio of performance products.

On expects net sales growth to accelerate in the fourth quarter. Expected U.S. tariff refunds prompted a raised outlook: full-year sales growth in the low-20 percent range, reaching 3.47 billion francs, a gross margin of 67.5 percent and adjusted EBITDA of 21 to 21.5 percent of sales.

Sluis said On has gained significant share in lifestyle, where the market is declining globally and is highly promotional, while running is stable. He said On has the highest full-price sell-through rate and operates at the intersection of performance, design and culture.

On sees golf as winnable if it is authentic and disruptive, Sluis said. Players have had to choose between stability and comfort, he argued, and On has cracked the code with a shoe offering both. Nike and Under Armour, he noted, face challenges.

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Image: Courtesy of On