On Holding (ONON) and Its Strategic Positioning for Long-Term Growth Amid Macroeconomic Challenges

In an era marked by currency volatility, geopolitical tensions, and shifting tariff regimes, On Holding AG (ONON) has emerged as a compelling case study in strategic resilience. The Swiss sportswear giant has navigated macroeconomic headwinds with a dual focus on margin expansion and sustainable revenue growth, leveraging operational efficiencies, global diversification, and proactive risk management. This analysis evaluates ONON's positioning for long-term success, drawing on its 2023–2025 financial performance and strategic initiatives.

Financial Resilience Amid Currency and Tariff Volatility

On Holding's Q3 2025 results underscore its ability to thrive in a volatile environment. The company reported net sales of CHF 794.4 million, a 24.9% year-over-year increase and 34.5% growth on a constant currency basis. Gross profit margin expanded to 65.7%, up 510 basis points year-over-year, while adjusted EBITDA margin rose to 22.6%, reflecting disciplined cost control and pricing power. These metrics highlight ONON's capacity to convert operational efficiencies into profitability, even as it faces challenges like the Swiss franc's appreciation against the U.S. dollar in 2023, which initially pressured its U.S.-denominated revenue.

The company's broad-based growth-particularly in the Asia-Pacific region (94.2% YoY sales increase) and its apparel category (86.9% YoY growth)-demonstrates its ability to tap into high-potential markets. This diversification mitigates regional risks and aligns with a broader trend of companies shifting supply chains closer to end markets to avoid tariffs. According to McKinsey, this approach reduces exposure to global trade disruptions.

Currency Hedging and Tariff Mitigation: A Pragmatic Approach

While ONON's official reports do not explicitly detail its currency hedging techniques, the company's financial performance suggests effective risk management. For instance, the gross profit margin expansion in 2025 implies that ONON likely employed tools such as forward contracts, currency options, or natural hedging (e.g., matching revenue and cost currencies) to offset exchange rate fluctuations. These strategies are standard in industries exposed to cross-border trade, and ONON's improved EBITDA margins indicate their success. Tariff mitigation efforts are similarly embedded in ONON's operational strategy. The company has diversified its supplier base and increased safety stock levels to buffer against supply chain disruptions. For example, in response to rising tariffs on Vietnamese imports, ONON implemented price increases in July 2024 to absorb additional costs while maintaining demand stability. Such proactive measures align with industry best practices, including dual sourcing and nearshoring, which 54% of global companies adopted in 2023–2025 to reduce dependency on single regions.

Strategic Pillars for Long-Term Growth

ONON's investor presentation outlines a three-year financial outlook (2023–2026) anchored in three strategic pillars: elevating its core business, expanding growth drivers, and establishing new product categories. These initiatives are designed to reinforce its premium positioning and drive margin expansion.

1. Core Business Strengthening: The company's focus on premium brand hubs and direct-to-consumer (DTC) channels has amplified customer loyalty and pricing power. DTC sales, which accounted for a significant portion of 2025's record net sales (CHF 726.6 million in Q1 2025), benefit from higher margins and data-driven insights for product development.
2. Geographic and Category Expansion: ONON's aggressive expansion in China and its push into own retail align with its goal to double 2023 net sales by 2026. The Asia-Pacific region's 94.2% YoY growth in Q3 2025 validates this strategy, as does the apparel category's strong performance, which reflects diversification beyond its core running shoes.
3. Innovation and New Markets: The company's foray into Tennis and Training segments represents a strategic bet on adjacent categories with high growth potential. These initiatives are supported by R&D investments and a focus on premium innovation, which CEO Martin Hoffmann emphasized as critical to maintaining operational profitability.

Raising the Bar: 2025 Guidance and Future Outlook

ONON's raised full-year 2025 guidance-34% constant currency net sales growth and an adjusted EBITDA margin above 18%-reflects confidence in its ability to sustain momentum. This optimism is grounded in its diversified supply chain, robust DTC model, and premium brand positioning. However, the company remains cautious about macroeconomic risks, including potential U.S. tariffs on Vietnamese imports and continued currency fluctuations. According to investors, its proactive pricing adjustments and supply chain resilience suggest it is well-equipped to navigate these challenges.

Conclusion: A Model of Resilience and Adaptability

On Holding's strategic positioning exemplifies how companies can thrive in a volatile macroeconomic landscape. By combining operational discipline, geographic diversification, and proactive risk management, ONON has not only mitigated currency and tariff pressures but also transformed them into opportunities for margin expansion. As global trade dynamics continue to evolve, ONON's focus on premium innovation and supply chain agility positions it as a leader in the sportswear sector, with a clear path to long-term growth.