On Holding posts another record quarter, raises full‑year guidance after strong Q2 and H1
Swiss performance footwear and apparel maker On Holding AG reported robust second-quarter and first‑half 2025 results, lifting its full‑year guidance as strong top‑line momentum and improved profitability continued.
Highlights
– Q2 net sales: CHF 749.2 million, up 32.0% year‑over‑year (38.2% on a constant‑currency basis).
– H1 net sales: CHF 1,475.8 million, up 37.2% (39.1% constant currency).
– Direct‑to‑consumer (DTC) channel: Q2 sales CHF 308.3 million, up 47.2% (54.3% CC); DTC share reached 41.1% of net sales.
– Gross profit margin (Q2): 61.5% (up from 59.9% a year earlier). H1 gross profit margin: 60.7%.
– Adjusted EBITDA (Q2): CHF 136.1 million, up 50.0% YoY; adjusted EBITDA margin (Q2) 18.2% (H1: CHF 256.1m, margin 17.4%).
– Reported Q2 net loss: CHF 40.9 million (versus net income CHF 30.8m a year earlier); H1 net income CHF 15.8 million (down from CHF 122.2m). The decline in reported net income was materially affected by large foreign exchange losses recorded in the period.
– Cash and cash equivalents as of June 30, 2025: CHF 846.6 million (down 8% from CHF 924.3m at year‑end 2024). Net working capital rose to CHF 533.4 million.
Guidance update
On raised its full‑year 2025 outlook, now expecting net sales to grow at least 31% year‑over‑year on a constant‑currency basis, equivalent to reported net sales of at least CHF 2.91 billion at current spot rates (previously CHF 2.86bn). It also lifted expected gross profit margin to 60.5–61.0% (from 60.0–60.5%) and reiterated adjusted EBITDA margin guidance, tightening the range to 17.0–17.5%.
Drivers and commentary
Management pointed to a combination of product innovation (recent launches across Running, Tennis and Trail), accelerating apparel growth, expansion of premium retail footprint and particularly strong performance in Asia‑Pacific as the core drivers behind growth. Apparel and accessories posted notable increases (apparel up strongly on both quarterly and six‑month bases; accessories more than doubled in the quarter).
Operationally, the company cited the higher share of DTC sales, pricing/premium positioning and ongoing efficiencies for the rise in gross margin and adjusted EBITDA margin. However, reported IFRS net income was weighed down by significant foreign exchange losses recorded in the period, illustrating the difference between operational performance (reflected in adjusted measures) and reported accounting results.
Other items to note
– On’s guidance incorporates the impact of additional reciprocal tariffs identified in the U.S. Presidential Executive Order of July 31, 2025.
– Inventories decreased versus year‑end 2024, while trade receivables rose—contributing to the increase in net working capital.
– The company remains mid‑way through a three‑year strategic plan and said it is raising confidence in hitting the plan’s objectives given recent results.
Why adjusted metrics matter here
On emphasizes adjusted (non‑IFRS) measures such as adjusted EBITDA and constant‑currency sales to show underlying operational trends excluding volatile items—most notably foreign exchange swings and share‑based compensation. The company warns that adjusted EBITDA is not reconciled forward to IFRS net income because certain future items are hard to forecast with certainty.
Additional comments and implications
– The operating story is strong: high single‑digit to double‑digit growth across channels and regions, and rising margins point to healthy unit economics as On scales apparel and DTC.
– Investors and observers should watch foreign exchange exposure and the impact of new U.S. trade measures on costs and pricing. Large FX swings can obscure the operational momentum when looking only at reported net income.
– Cash remains substantial (CHF ~847m), giving On flexibility for retail expansion and inventory management, though cash declined modestly in H1.
– Asia‑Pacific continues to be a standout market, posting rapid growth that could meaningfully reshape On’s regional mix if sustained.
Short summary
On delivered record net sales and margin expansion in Q2 2025, driven by strong DTC growth, product launches and rapid Asia‑Pacific momentum. Adjusted EBITDA rose sharply and the company raised full‑year sales and margin guidance, though reported net income fell in Q2 due to significant foreign exchange losses.
Hopeful outlook
Despite the accounting headline loss in Q2, the underlying business momentum — faster DTC mix, expanding apparel sales, higher gross margins and improved adjusted EBITDA — suggests On is making measurable progress toward its multi‑year strategic goals. If FX volatility moderates and market demand persists, the upgraded guidance and premium positioning point to potential continued profitable growth.
Conference call
On scheduled a conference call to discuss results on August 12, 2025 (webcast available via the company’s investor relations channels).
Notes for editors/publishers
– Key figures above are reported in Swiss francs (CHF).
– All growth rates referenced as “constant currency” represent management’s retranslation of current results using prior‑period exchange rates to isolate operational performance from currency effects.