On Holding posts record growth in 2025 as FX drags net income

2025 shows an interesting imbalance at On Holding: operationally, business is booming, but the bottom line is becoming significantly more turbulent. Sales are up 30 percent to CHF 3.01 billion (€3.15bn), the gross margin has climbed to an impressive 62.8 percent, and operating profit has even increased by 78.2 percent – clear evidence of economies of scale and pricing power in the premium segment. At the same time, net income fell by 15.9 percent to CHF 203.7 million (€213m), and the net margin declined from 10.4 to 6.8 percent. The reason for this was a massive negative currency effect of CHF 173.2 million (€181m). 

Operational strength, balance sheet headwinds

The operating fundamentals are thus becoming more stable, while reported profitability is becoming more volatile. The more globally the Swiss company grows, the more visible this discrepancy between operating momentum and balance sheet reality is likely to become.

This raises a key question: Is this a one-off special effect – or a structural phenomenon that will inevitably become more significant as internationalization increases? This is precisely where it is worth taking a closer look at the role of currency effects in On’s business model.

It is noteworthy that the analyst call hardly delved into the massive currency effects. The focus was clearly on growth, the innovation pipeline, and margin quality – not on volatility below the Ebit line.

The price of internationalization

Currency effects are an increasingly structural factor influencing the shoe specialist’s earnings volatility. With its growing global presence – particularly in the US and the Asia-Pacific region – the discrepancy between operating revenue generated in foreign currencies and reporting in Swiss francs is increasing. Exchange rate movements affect not only the translation of sales, but above all balance sheet items such as receivables and liabilities.

In 2025, this led to a negative foreign currency result of CHF 173.2 million (€181m), following a profit of CHF 67.7 million (€71m) in the previous year, and had a significant negative impact on pre-tax earnings – even though operating business improved significantly. The more international Swiss companies operate, the more visible this IFRS-related earnings volatility is likely to become. Operationally, this is not a structural weakness, but in terms of accounting, it is a factor that is likely to cause the reported net margin to fluctuate more strongly in the future.

APAC is on a roll: growth momentum shifts

Regionally, there will be a clear shift in growth momentum in 2025. While the Americas continue to make the largest contribution to sales with CHF 1.74 billion (€1.82bn), growth there slowed to 17.6 percent. EMEA developed much more dynamically, with an increase of 32 percent to CHF 762.7 million (€797m), as did APAC in particular, where revenues almost doubled, rising by 96.4 percent to CHF 511.1 million (€534m).

The different growth rates in the regions primarily reflect the respective maturity of the markets. Although On remains by far the strongest player in the Americas, the slowdown in growth indicates increasing market penetration and a certain normalization in the largest core market. CFO Martin Hoffmann emphasized in the earnings call: “We expect very strong growth rates in each of the regions.” At the same time, he made it clear: “Very clearly, the Americas is our strongest region, our largest region, and we will not be able to put out such a strong growth outlook without full confidence in that region.”  

In EMEA, on the other hand, the company continues to benefit from dynamic brand development, increasing visibility in the performance segment, and overall robust demand for premium sportswear. CEO David Allemann said: “We are super excited about Europe because it’s the momentum there from the UK to Southern Europe, but also the accelerated momentum in Central Europe.”

The strongest expansion is in Asia-Pacific, where On is still in an early growth phase. “Asia Pacific had an amazing run, more than doubling quarter over quarter,” explained Hoffmann.  

Growth in the regions

• Americas: +17.6 percent to CHF 1.74 billion (€1.82bn, +23.4% cc)
• EMEA: +32 percent to CHF 762.7 million (€797m, +34.7% cc)
• Asia-Pacific: +96.4 percent to CHF 511.1million (€534m, +106.7% cc)

On becoming a “toe-to-head” brand

The premium strategy is also reflected in the channel and category structure. The direct-to-consumer channel grew faster than the wholesale business in 2025, at 33.7 percent, thereby strengthening margin quality and brand sovereignty. At the same time, specialist retailers remain a key partner, albeit with selective and controlled expansion. On the product side, footwear continues to dominate with sales of over CHF 2.80 billion (€2.93bn), but apparel (+68.2%) and accessories (+124.1%) are gaining in importance. On is thus increasingly evolving from a running shoe brand to a “toe-to-head” performance brand – a decisive step toward increasing shopping baskets and securing its premium position in the long term.

Brand building for decades not quarters

Allemann’s statement that “we are building a brand not just for the next year, but for the next decades” forms the strategic foundation for the 2026 guidance. On is not promising short-term volume growth but is planning an increase of at least 23 percent on a currency-adjusted basis – with a gross margin of at least 63 percent and an adjusted EBITDA margin of 18.5 to 19.0 percent. The decisive factor here is not so much the growth figure itself as the question of how it is to be achieved. 

In addition to scaling up its LightSpray technology and relaunching key running franchises, the company is increasingly focusing on cultural relevance. Its collaboration with Zendaya marks a strategic step beyond the traditional performance segment, addressing a younger, fashion-conscious target group and strengthening its position in the women’s and lifestyle sectors in particular. At the same time, sporting partnerships – such as with Roger Federer – remain an anchor for performance credibility. Management also sees further potential among younger male consumers, who are currently underrepresented. Growth should therefore not come from broader distribution at any price, but from innovation leadership, cultural charging of the brand, and disciplined premium positioning.

Biggest opportunity: 70% untapped territory

Speaking of the brand’s cultural appeal, this is precisely where management sees perhaps the greatest structural potential. “Awareness is just through the roof. The good thing is that there are still 70 percent of people who don’t know us. There’s a lot of potential there as well,” said Allemann in the analyst call. Brand awareness has recently risen from 20 to 30 percent – a significant jump. At the same time, this means that around 70 percent of potential consumers are not yet familiar with On. For the company, this is not a deficit, but rather the real growth story. Awareness itself thus becomes a strategic lever. However, leveraging such potential in a controlled manner requires more than brand hype and innovative strength – it requires financial control, capital discipline, and operational excellence.

Frank Sluis – the new man in a key role

This is in line with the personnel changes in the finance department. With Frank Sluis, the premium brand is bringing a new CFO into the team to support the next phase of growth in terms of accounting and capital markets. The Dutch-born executive speaks of a “truly unique company” with a strong brand, clear values, and an ambitious global growth agenda – a formulation that ties in perfectly with Allemann’s decade-long ambition. Sluis also emphasizes his personal passion for sports and sustainability – an attitude that fits with On’s value-based brand positioning and underscores the aspiration to think about growth not only in quantitative terms, but also in cultural terms. In a phase of increasing complexity – from global scaling to currency volatility to margin discipline – financial management is likely to play a key strategic role.

Premium ambition on a par with the big players

In 2025, On is stronger than ever in terms of operations – with sales of over CHF 3 billion (€3.14bn), a gross margin of over 62 percent, and double-digit growth rates in all core regions. The Swiss brand is no longer playing in the challenger niche but is now in the same league as Hoka and establishing itself as a serious global premium player alongside Nike and Adidas.

But anyone who wants to break into the big leagues must not only inspire but also be able to steer the ship. 2026 will therefore be less a test of demand than a test of balance: between growth and control, between brand hype and financial discipline. This is where it will be decided whether On will remain on par with the big players in the long term – or whether it will be perceived merely as a fast-growing challenger.