Swiss company On Holding, in forecasting 2024 sales growth of at least 30 percent to 2.25 billion Swiss francs (€2.35bn), has established numerous priorities for its business in the year ahead. Among them: Capitalizing on the brand’s global momentum, building up its apparel business, expanding its own retail worldwide with approximately 20 doors, and elevating its multi-channel strategy with more solid growth from the DTC channel where 29 percent of new customers were below 34 years old in 2023. New apparel launches in tennis and training are expected to help the brand reach new consumers. Meanwhile, the new store growth will include key cities in Europe, North America, and China and first doors in Latin America, Australia, and possibly the Middle East.
| On - Income | |||
|---|---|---|---|
| 2023 | 2022 | Change | |
| FY 2023 (CHF millions) | |||
| Net sales | 1,792.1 | 1,222.1 | 46.6% |
| Cost of sales | 724.8 | 537.2 | 34.9% |
| Gross profit | 1,067.2 | 684.9 | 55.8% |
| SG&A expenses | 887.0 | 599.8 | 47.9% |
| Operating result | 180.2 | 85.1 | 111.8% |
| Financial income | 11.5 | 5.7 | 101.8% |
| Financial expenses | 11.3 | 6.4 | 76.6% |
| Foreign-exchange result | -111.4 | -6.5 | -1613.8% |
| Pre-tax | 69.1 | 77.9 | -11.3% |
| Tax | 10.5 | -20.2 | – |
| Net income | 79.6 | 57.7 | 38.0% |
| Diluted EPS class A | 0.25 | 0.18 | 38.9% |
| Diluted EPS class B | 0.02 | 0.02 | 0.0% |
| Q4 2023 (CHF millions) | |||
| Net sales | 447.1 | 366.8 | 21.9% |
| Cost of sales | 176.9 | 152.2 | 16.2% |
| Gross profit | 270.2 | 214.6 | 25.9% |
| SG&A expenses | 229.4 | 199.9 | 14.8% |
| Operating result | 40.8 | 14.7 | 177.6% |
| Financial income | 4.2 | 2.5 | 68.0% |
| Financial expenses | 4.5 | 0.9 | 400.0% |
| Foreign-exchange result | -85.5 | -40.7 | -110.1% |
| Pre-tax | -45.0 | -24.4 | -84.4% |
| Tax | 18.2 | -2.0 | – |
| Net income | -26.8 | -26.4 | -1.5% |
| Diluted EPS class A | -0.08 | -0.08 | 0.0% |
| Diluted EPS class B | -0.01 | -0.01 | 0.0% |
| Source: On | |||
In Q4 ended Dec. 31, the group reported an operating profit of CHF40.8 million (€42.5m) against CHF14.7 million as net sales rose by almost 22 percent to CHF447.1 million (€446.3m). DTC revenues grew by 38 percent on a reported basis to CHF206.6 million (€215.5m). The net loss was CHF26.8 million (€27.9m), slightly above the year-ago period’s loss of CHF26.4 million. Gross margin improved by 190 basis points to 60.4 percent, aided by a higher DTC share of sales and lower freight rates.
In the EMEA, where the company has closed approximately 200 non-strategic stores, net sales rose 23 percent to CHF112.5 million (€117.3m) and were 26 percent on a constant currency basis. Americas’ sales increased by 18.5 percent to CHF300.6 million (€313.5m), the brand’s strongest quarter ever in the region. Sales in APAC, bolstered by China and Japan, expanded by 58 percent to CHF34 million (€35.5m). By product category, apparel sales grew by 60 percent to CHF18.4 million (€19.2m), and footwear sales stepped up by 20 percent to CHF425.7 million (€444.0m).
For FY23, On reported a 112 percent growth in annual operating income to CHF180.2 million (€187.9m) as total sales increased by 47 percent to CHF1,792.1 million (€1.87bn) from CHF1,222.1 million.
This year, On is guiding toward a gross margin of 60 percent and DTC as a higher percentage of overall sales. The group is not planning any significant price increases, only small hikes on some updated models, such as the Cloudmonster 2. While the company intends to ramp up efforts to increase brand awareness among consumers worldwide in 2024, it will maintain an overall marketing spend of about 12 percent of revenues.
