On Holding proves premium positioning and hypergrowth can coexist

Just a few months ago, much of what was happening at On Holding seemed like a balancing act between hypergrowth and premium aspirations. The figures for the first quarter of 2026 now suggest for the first time that this very tension could become the core of the company’s strength. For the Swiss company is not only growing faster than many competitors – it is simultaneously increasing profitability, full-price sales, and brand reach. “The innovation we have, the premium strategy, and the full-price discipline ensure that we’re selling shoes at high prices and at full price,” emphasized outgoing CFO Martin Hoffmann.

Management confident: growth meets profitability

A look at the numbers explains the unusually confident tone of the earnings call: On is no longer just growing quickly, but increasingly in a controlled and profitable manner. Revenue rose 26.4 percent on a currency-adjusted basis to CHF 831.9 million (€907m), while the gross margin climbed to 64.2 percent despite additional U.S. tariffs. At the same time, the adjusted Ebitda margin increased significantly to 21.0 percent. This demonstrates for the first time that premium positioning, full-price discipline, and global scaling do not necessarily limit one another – but rather increasingly reinforce each other.

Apparel as a new entry point

Particularly noteworthy: Growth drivers are no longer just running shoes, but increasingly also apparel, DTC, and lifestyle-oriented target groups. In the first quarter, the apparel business grew by 93.1 percent on a currency-adjusted basis to CHF 44.8 million (€49m), once again outperforming the core footwear business by a wide margin. At the same time, management emphasized that apparel is increasingly becoming the entry point for new consumers – particularly among younger and female target groups. It is precisely this shift that suggests On is beginning to evolve from a performance running brand into a broader premium sportswear brand.

Marketing expenditures more important than ever

In this context, the significantly higher marketing expenditures are also gaining strategic importance. On expects marketing expenses to amount to around 13 to 13.5 percent of revenue in 2026 – an unusually high figure for a company that is simultaneously increasing its profitability. However, the Swiss company is not primarily investing in short-term reach or more aggressive distribution, but rather in brand elevation, cultural visibility, and long-term desirability.

Building a premium consumer brand

At times, the tone of the entire analyst call was more reminiscent of premium consumer brands like Apple than of a traditional sportswear group. Terms such as “desirability,” “beautiful,” “premium delivery,” “cultural relevance,” “communities,” and “selective premium locations” ran through nearly the entire call. And in the U.S., this cultural visibility already seems to be bearing fruit: According to management, brand awareness there exceeded the 30 percent threshold for the first time.

Meanwhile On explained that traffic on its own channels is now growing faster than actual sales – an indication that the brand is currently generating more attention than it is monetizing in the short term. This premiumization is reflected not only in the brand’s communications but also consistently in its visual brand identity.

The aesthetics behind the premium strategy

Visually, On remains true to its minimalist aesthetic: rather than bold, performance-oriented color schemes, white or monochrome models often dominate, along with a design language that is more reminiscent of design and technology brands than traditional running brands. The stores also emphasize minimalism and simplicity over flashy design elements. New locations have recently opened in San Francisco, Stockholm, and São Paulo – all in select premium locations and in the vicinity of international luxury and design brands. “Our stores are true brand growth, bringing our product, communities, and premium positioning to life in a way no other channel can,” explained co-founder and co-CEO Casper Coppetti during the analyst call. On thus underscores its commitment to positioning the brand in a controlled and deliberate manner within the global premium segment.

Why the market is still hesitant

On the capital markets side, too, the quarter marked a notable shift in sentiment. After On’s stock had temporarily plummeted at the end of March following the surprise departure of CFO Hoffmann, the recent earnings call almost seemed like a deliberate effort to reassure the market. The leadership change was consistently framed as a “continuity” story. “Nothing changes,” Co-CEO David Allemann emphasized repeatedly – referring to strategy, guidance, and premium positioning. Notably, it was Hoffmann himself who answered a large portion of the financial, margin, and guidance questions during the Q1 call.

Equity story bigger than personnel changes

That was likely no coincidence. Although Frank Sluis was already introduced as the new CFO, in terms of communication, the call felt less like a fresh start and more like a controlled handover within the same long-term premium strategy. The central message was clearly that the equity story is now supposed to be bigger than individual personnel changes.

At the same time, the stock’s initially muted reaction indicated that the market is now focusing less on pure growth and more on the question of how scalable and sustainably profitable the premium model actually is. This was precisely the focus of management’s analyst call – where they emphasized terms like “quality of growth,” “premium strategy,” and “full-price discipline” far more strongly than aggressive expansion targets. Q1 provided more convincing evidence of this for the first time: higher margins despite tariffs, sustained full-price discipline, increasing brand reach, and accelerated DTC momentum. The market thus seems to be slowly accepting that On is not only growing rapidly – but is also beginning to build a structurally profitable premium model.