On Holding AG - Ordinary Shares (ONON) Q2 Earnings call transcript Aug 13, 2024

In the second quarter of 2024, On Holding AG reported a net sales growth of 28%, marking a significant milestone in its financial performance. This growth is attributed to the company's focus on long-term success and its unique ambition to dream big. The company has also seen an increase in profitability levels, both in terms of gross profit and adjusted EBITDA margin.

Key Themes and Trends

On Holding AG's earnings call highlighted several key themes and trends. The company's focus on long-term success and its dream of achieving extraordinary achievements is evident in its strategic initiatives. The launch of its new LightSpray technology and the partnership with Zendaya are examples of this long-term vision. These initiatives have not only generated strong financial results but also increased brand awareness and customer engagement.

The company's commitment to its athletes is another trend that has contributed to its success. On Holding AG's support for its athletes, both in their physical and mental preparation, as well as in their career development beyond their athletic years, has fostered a strong team spirit and a shared goal of winning together. This approach has led to several historical achievements, including Dominic Lobalu's fourth-place finish in the men's 5,000 meter and Lisa Tertsch's gold medal in the mixed relay.

Investor Interactions

During the earnings call, investors expressed concerns about the company's supply chain constraints and their impact on sales, particularly in the DTC and wholesale channels. The company acknowledged these challenges and reiterated its commitment to addressing them. It also highlighted its plans for expanding its automated warehouse capabilities and near-shoring manufacturing to improve efficiency and reduce supply chain disruptions.

Trends in the Sector

On Holding AG's earnings call also provided insights into trends within the sports apparel sector. The company's focus on performance and innovation, particularly in its LightSpray technology, is a reflection of the growing demand for high-performance sports gear. The trend towards near-shoring and sustainable manufacturing practices is also evident, with On Holding AG's LightSpray technology featuring a 75% reduction in CO2 emissions compared to traditional uppers.

Tone, Language, and Sentiment

The tone and language used by On Holding AG's executives during the earnings call were positive and confident, reflecting the company's strong financial performance and optimism about its future prospects. The sentiment towards the company's strategic initiatives and partnerships was generally positive, with investors expressing enthusiasm about the company's potential for long-term growth.

Red Flags and Warning Signs

The earnings call did not reveal any significant red flags or warning signs. However, investors expressed concerns about the company's supply chain constraints and their impact on sales, particularly in the DTC and wholesale channels. The company acknowledged these challenges but expressed confidence in its ability to address them.

In conclusion, On Holding AG's second quarter 2024 earnings call provided a comprehensive overview of the company's financial performance and strategic initiatives. The company's focus on long-term success, commitment to its athletes, and innovative product offerings have contributed to its strong financial performance and brand awareness. Despite the challenges in its supply chain, the company remains optimistic about its future prospects and its ability to continue driving growth and innovation in the sports apparel sector.