On failed to meet expectations for its quarterly earnings due to a 42.6 million Swiss franc (€45.4m) currency fluctuation impacting results. Still, the Swiss group posted another blockbuster sales period and increased its revenue and gross margin guidance for the year.
Operating income rose by 26 percent to CHF72.6 million (€77.4m) on 32 percent revenue growth to CHF635.8 million (€677.5m) for the three months ended Sep. 30. Net income slipped by 48 percent year-over-year to CHF30.5 million (€32.5m) from CHF58.7 million, but gross margin improved by 70 basis points to 60.6 percent. Wholesale revenues rose by 23 percent to CHF389.1 million (€414.6m) and Direct-to-consumer sales grew by 50 percent year-over-year to CHF246.7 million (€262.9m). Footwear sales stepped up by 32 percent to CHF603.7 million (€643.3m); apparel sales increased by 33 percent to CHF26.8 million (€28.6m); and accessories revenues expanded by 54 percent to CHF5.3 million (€5.6m).
| On Holding - Income | |||
|---|---|---|---|
| 2024 | 2023 | Change | |
| Three months ended Sept. 30 | |||
| Net sales | 635.8 | 480.5 | 32.3% |
| Cost of sales | 250.5 | 192.8 | 29.9% |
| Gross profit | 385.3 | 287.7 | 33.9% |
| SG&A expenses | 312.7 | 229.9 | 36.0% |
| Operating result | 72.6 | 57.8 | 25.6% |
| Financial income | 6.0 | 1.0 | 500.0% |
| Financial expenses | 6.5 | 3.2 | 103.1% |
| Forex gain | -42.6 | 13.8 | – |
| Pre-tax | 29.6 | 69.3 | -57.3% |
| Tax | -0.9 | 10.6 | – |
| Net income | 30.5 | 58.7 | -48.0% |
| Diluted EPS Class A | 0.09 | 0.18 | -50.0% |
| Diluted EPS Class B | 0.01 | 0.02 | -50.0% |
| Nine months ended Sept. 30 | |||
| Net sales | 1,711.7 | 1,345.0 | 27.3% |
| Cost of sales | 682.8 | 547.9 | 24.6% |
| Gross profit | 1,028.9 | 797.1 | 29.1% |
| SG&A expenses | 870.4 | 657.6 | 32.4% |
| Operating result | 158.5 | 139.5 | 13.6% |
| Financial income | 17.1 | 7.3 | 134.2% |
| Financial expenses | 17.2 | 6.8 | 152.9% |
| Forex gain | 29.7 | -25.9 | – |
| Pre-tax | 188.1 | 114.1 | 64.9% |
| Tax | 35.4 | 7.7 | 359.7% |
| Net income | 152.7 | 106.3 | 43.7% |
| Diluted EPS Class A | 0.47 | 0.33 | 42.4% |
| Diluted EPS Class B | 0.05 | 0.03 | 66.7% |
| Source: On Holding | |||
Regionally, Asia-Pacific was the largest sales gainer on a percentage basis, rising by 74 percent to CHF186.2 million (€198.4m). The region, led by Japan and China in Q3, has grown its constant-currency sales by more than 85 percent over the first nine months. Revenue expansion in China has been spearheaded by its own retail stores, now at 50, and the e-commerce strategy has been formulated to reach the market’s younger, mobile-savvy consumers. While the group is rapidly expanding its scale in South Korea and opening a second Tokyo store in 2025, it is also eying the markets of Indonesia and the Philippines for future growth on the continent.
Elsewhere, EMEA constant-currency sales increased by 16 percent in Q3 to CHF430.4 million (€458.6m) and rose by 30 percent in the Americas to CHF1,095.1 million (€1.17b). France, bolstered by the Summer Olympics, has emerged as the EMEA’s fastest-growing market in the EMEA as Zalando has helped the brand reach younger consumers.
With the Q3 results, On raised its FY24 outlook. The company now expects its constant-currency sales growth to increase by at least 32 percent this fiscal year to CHF2.29 billion (€2.44b). Full-year gross margin is now forecast to reach 60.5 percent, 50 basis points than initially expected. The annual adjusted Ebitda margin is now forecast to hit the high end of the 16.0-16.5 percent guided range.
| On Holding - Revenues | ||||
|---|---|---|---|---|
| 2024 | 2023 | Change | ||
| Three months ended Sept. 30 | ||||
| Channels | ||||
| Wholesale | 389.1 | 315.7 | 23.2% | |
| DTC | 246.7 | 164.7 | 49.8% | |
| Net sales | 635.8 | 480.5 | 32.3% | |
| Regions | ||||
| EMEA | 165.8 | 144.0 | 15.1% | |
| Americas | 395.5 | 294.9 | 34.1% | |
| Asia-Pacific | 74.6 | 41.6 | 79.3% | |
| Net sales | 635.8 | 480.5 | 32.3% | |
| Segments | ||||
| Shoes | 603.7 | 456.9 | 32.1% | |
| Apparel | 26.8 | 20.1 | 33.3% | |
| Accessories | 5.3 | 3.5 | 51.4% | |
| Net sales | 635.8 | 480.5 | 32.3% | |
| Nine months ended Sept. 30 | ||||
| Channels | ||||
| Wholesale | 1,065.1 | 879.8 | 21.1% | |
| DTC | 646.6 | 465.2 | 39.0% | |
| Net sales | 1,711.7 | 1,345.0 | 27.3% | |
| Regions | ||||
| EMEA | 430.4 | 376.3 | 14.4% | |
| Americas | 1,095.1 | 861.7 | 27.1% | |
| Asia-Pacific | 186.2 | 107.0 | 74.0% | |
| Net sales | 1,711.7 | 1,345.0 | 27.3% | |
| Segments | ||||
| Shoes | 1,630.8 | 1,285.6 | 26.9% | |
| Apparel | 68.4 | 50.4 | 35.7% | |
| Accessories | 12.4 | 8.9 | 39.3% | |
| Net sales | 1,711.7 | 1,345.0 | 27.3% | |
| Source: On Holding | ||||
