On's wholesale grows 12.2% to 538.2 million francs as DTC misses

On reported third-quarter sales of 931.4 million Swiss francs, up 17.2% from a year earlier, or $1.1 billion at current exchange rates. Net income climbed 36.9% to 162.8 million francs for the period ended 30 September 2026.

Wholesale, the channel that had lagged and worried Wall Street, was the surprise. Wholesale net sales grew 12.2% to 538.2 million francs. Direct-to-consumer sales rose 25% to 393.3 million francs, which fell short of many analysts' expectations.

What analysts made of the quarter

William Blair analysts had flagged wholesale ahead of the print, citing continued promotional pressure and planned lower sell-in as downside risk to Street expectations. Their note after the results said the quarter alleviated near-term concern over wholesale growth, though the DTC miss left the growth composition mixed.

The firm added that On is navigating the promotional wholesale backdrop better than anticipated, partly because of strength in underlying margins. Chief financial officer Frank Sluis said on the earnings call that the brand held full price discipline across its markets despite softer online traffic and heavier category promotion.

In North America, On expanded shelf space with retail partners and won over more younger shoppers around the back-to-school season. Executives told analysts they expect fourth-quarter growth to accelerate from the third quarter, led mostly by direct-to-consumer.

Sluis said On's partners are at a healthy inventory level as the holiday season unfolds. The brand intends to keep running a premium-pricing business even though the wider category has become more promotional.

Asia-Pacific and the Mbappé controversy

Co-chief executive Caspar Coppetti called Asia-Pacific a match made in heaven for the brand's premium playbook. The region grew 31.9% on a constant currency basis and 31.1% on a reported basis to 189.9 million francs.

Sluis said the geography is growing at a deliberate, controlled pace, expanding and elevating at the same time. That includes being even more selective about which partners the brand works with and how premium the presentation is, so growth is expected closer to the mid-to-high twenties over coming quarters.

Coppetti said On does not want to lean into the promotional 11/11 period in China, nor raise marketing dollars to spend against promotions when the brand wants to sell at full price. He cited a third-party study putting On as the number two premium footwear brand in China.

The region is complicated by last month's controversy around On's newest ambassador and football face, Kylian Mbappé. The Real Madrid forward laughed at a meme of his face on Mao Zedong's body and called the former leader a dictator, drawing significant backlash in China despite a later apology.

Coppetti did not directly address the situation. In Japan, Sluis said key partners came back for significantly more products through the quarter after strong sellout, with reorders running well ahead of plan. In Korea, every store beat expectations by at least 30%.

LightSpray capacity and category sales

On currently operates three stores in South Korea with a fourth on the way. The company is also adding a LightSpray factory in Vietnam in the short term, alongside its existing LightSpray factories in Switzerland and South Korea and a fourth factory set to open in Portugal.

Coppetti said the extra capacity in Vietnam will be very welcome and, once fully built, will more than double LightSpray capacity. Vietnam was chosen at this stage partly to unlock more product variety and more expressions of what LightSpray products can look like.

By category, shoes rose 15.4% to 843.7 million francs. Apparel climbed 38.7% to 69.5 million francs and accessories gained 39.2% to 18.1 million francs, so the quickest percentage growth came in the smallest lines.

The quarter's mix reversed. Wholesale, long the lagging channel, delivered more than analysts feared, while DTC, the core focus, came in light. The composition is more mixed than the headline growth suggests, and the fourth quarter is where the acceleration is promised.

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This briefing is published daily using an AI-powered system crafted by Worthbury's team and finely tuned to meet our editorial standards. While we continuously test and review the output, mistakes can sometimes happen. Tell us if you spot one.

Images: Courtesy of On