On Holding Races Ahead in Q1 with 43% Sales Surge, Raises Full-Year Outlook Despite Tariff Uncertainty

Swiss athletic brand On Holding (ONON) delivered a strong first quarter performance, beating revenue expectations and raising its full-year outlook despite growing concerns over global trade policy uncertainty. The company’s premium-priced running shoes and expanding apparel portfolio continued to resonate across geographies and sales channels, pushing Q1 net sales to a record CHF726.6 million ($862.8 million), up 43% year-over-year and ahead of consensus estimates. While tariffs did not materially impact Q1 results, On acknowledged rising uncertainty due to global trade policy shifts and adjusted its margin expectations slightly to reflect that risk.

The report showcased the strength of On's multichannel model and its growing direct-to-consumer (DTC) presence, which now accounts for 38.1% of total revenue. DTC sales rose 45.3% year-over-year, while wholesale revenues increased 41.5%. The DTC segment’s expansion helped boost gross margins slightly to 59.9%, up from 59.7% in the prior-year period, reinforcing On’s brand-led pricing power and operational efficiency.

On’s performance across regions was equally impressive. Net sales in the Americas—the company’s largest region—grew 32.7% to CHF437.4 million, up 28.6% on a constant-currency basis. In EMEA, sales increased 33.6% to CHF168.6 million (33.0% constant currency), while Asia-Pacific delivered the standout performance with a 130.1% increase to CHF120.6 million (128.9% constant currency). These results highlight On’s rapidly expanding international footprint and the successful global rollout of its flagship products.

From a product category perspective, shoes remained the core growth driver, generating CHF680.9 million in sales (+40.5% y/y). However, apparel and accessories also gained momentum, up 93.1% and 99.2% respectively—early signs that On’s evolution into a full sportswear brand is taking hold. Launches like the Cloudsurfer 2 and Cloud 6, alongside strategic brand campaigns featuring names like Zendaya, added cultural cachet and commercial lift.

Despite the top-line strength, profitability metrics were mixed. Adjusted EBITDA rose 54.8% to CHF119.9 million, and the adjusted EBITDA margin improved to 16.5% from 15.2%. However, net income fell 38% to CHF56.7 million due to higher expenses and foreign exchange impacts. Adjusted net income dropped to CHF70.5 million from CHF106.5 million, and diluted EPS fell to CHF0.17 from CHF0.28.

Still, management struck an upbeat tone. Co-founder and Executive Chairman Caspar Coppetti said, “Our first quarter results have exceeded our expectations and reflect the strong momentum of our brand across all channels, regions and product categories.” CFO and Co-CEO Martin Hoffmann echoed this optimism, emphasizing On’s commitment to innovation and premium execution as keys to further market share gains.

Looking ahead, the company raised its full-year 2025 net sales outlook to at least 28% constant-currency growth, implying CHF2.86 billion in revenue at current spot rates—slightly below Street estimates but above the prior 27% forecast. On now expects a gross profit margin of 60.0% to 60.5% and an adjusted EBITDA margin between 16.5% and 17.5%, slightly trimmed from earlier guidance due to potential headwinds from tariffs, freight costs, and currency depreciation.

The company was candid about the risks from shifting global trade policies. In its guidance, On explicitly factored in the ongoing uncertainty, including the recently paused reciprocal tariffs in the U.S. and possible impacts from customs and logistics volatility. However, management maintained confidence in its pricing flexibility and global brand strength to offset those pressures.

Wall Street analysts offered a measured take on the results. Morgan Stanley resumed coverage with an “Equal Weight” rating and a $39 price target, noting that while On’s valuation now bakes in some of the optimism, the firm is modeling below-Street estimates for 2026 revenue and earnings. They see limited margin upside without a new structural growth catalyst and flagged capital allocation as a potential wildcard—suggesting buybacks or strategic acquisitions could play a bigger role moving forward.

Even so, the market rewarded On’s strong start to 2025. Shares rose more than 5% in premarket trading Tuesday as investors reacted positively to the company’s ability to accelerate growth while navigating a choppy global environment.

In summary, On Holding’s Q1 results underscore its growing brand relevance, global scalability, and execution strength. While margin pressures and macro risks are real, the company’s playbook of premium branding, innovation, and direct-to-consumer expansion continues to pay off. If it can maintain momentum and navigate trade policy turbulence effectively, On remains well-positioned to stretch its lead in the global performance apparel race.