On Holding (ONON) Q3 Earnings call transcript Nov 12, 2024
1min read In On Holdings AG's third-quarter earnings call, the company showcased a robust financial performance and strategic growth initiatives, indicating a positive outlook for the future. Here are the key takeaways from the call.
Record-Breaking Performance and Strategic Building Blocks
On Holdings AG reported a net sales of CHF 636 million in Q3, marking a 33% growth on a constant currency basis. The company's focus on strategic building blocks, including boosting brand awareness, expanding its running community, and entering new markets, has contributed to this growth. Caspar Coppetti, Co-Founder and Executive Co-Chairman, highlighted the company's efforts in brand building and the successful partnerships with athletes like Zendaya and FKA Twigs. These initiatives have resulted in a significant increase in brand awareness, particularly in the US and Paris, where brand awareness almost tripled year-over-year.
Growth in Running Community and Strategic Focus
The running community remains a significant pillar of On Holdings AG's strategic growth plan. The company's presence at the Olympics and the launch of innovative products like LightSpray have significantly increased its visibility and engagement with runners. The Cloudsurfer Next and Cloudrunner 2 have shown immediate blockbuster potential, and the company's strategic focus on building the Cloudmonster, Cloudsurfer, and Cloudrunner families is paying off.
Strategic Expansion in APAC and China
On Holdings AG has made significant strides in expanding its presence in Asia, particularly in China. The company's efforts in own retail and e-commerce channels have contributed to a 85% growth on a constant currency basis in the first 9 months. The consistent execution and exceptional momentum in the region have made APAC an increasingly meaningful part of the company's business, contributing over 10% to its global net sales.
Financial Performance and Future Outlook
The third quarter was the strongest quarter in On Holdings AG's history, with record net sales and profitability expansion. The company's multichannel distribution strategy, combined with a disciplined full price strategy, has resulted in a 60.6% gross profit margin and an 18.9% adjusted EBITDA margin. For the full year of 2024, On Holdings AG is increasing its constant currency net sales growth ambition from at least 30% to at least 32%. The company expects a higher constant currency growth rate in Q4 and anticipates reaching at least CHF 2.29 billion in net sales for the full year.
Conclusion
On Holdings AG's third-quarter earnings call underscores its strategic growth initiatives and robust financial performance. The company's focus on brand awareness, running community, and strategic expansion in APAC, particularly China, have contributed to its record-breaking performance. With a clear focus on innovation, excellence, and sustainable growth, On Holdings AG is well-positioned for continued success in the coming years.