The Swiss group generated 29 percent constant-currency sales growth in Q1 to surpass the CHF 500 million mark for the first time ever over three months, bolstered by a 49 percent gain in its Dtc segment and double-digit increases in shoes, apparel and accessories.
With the results, On Holdings reiterated its FY24 targets of at least 30 percent net sales growth on a constant currency basis to at least CHF 2.29 billion (€2.33b), a gross profit margin of at least 60 percent and adjusted Ebitda margin in the 16.0 to 16.5 percent range. On shares closed up more than 18 percent on the New York Stock Exchange yesterday.
First quarter operating income dipped by 9.0 percent to CHF 38.5 million (€39.4m) from CHF 42.3 million. Ebit rose by 125 percent to CHF 115.8 million (€118.1m) for the period ended March 31 as net income soared 106 percent to CHF 91.4 million (€93.2m). Adjusted Ebitda improved 70 basis points to 15.2 percent, ahead of expectations.
Total sales increased by 21 percent to CHF 508.2 million (€518.4m) from CHF 420.2 million as gross margin improved by 140 basis points to 59.7 percent. Constant currency revenues were up 29 percent on strong consumer demand across channels and geographies.
By channel, Dtc sales jumped by 39 percent to CHF 190.5 million (€194.3m) as the company launched its first commercial app worldwide during the period. Wholesale revenues, meanwhile, improved by 12 percent year-over-year to CHF 317.7 million (€324.1m).
By geography, the largest increases were in Asia-Pacific, up 69 percent to CHF 52.4 million (€53.5m), and the Americas, up 22 percent to CHF329.6 million (€336.2m). In the EMEA, Q1 revenues rose by 6.1 percent to CHF 126.2 million (€128.7m) and by 10.4 percent on a constant-currency basis. Closures of non-strategic doors contributed to lower wholesale revenues in the DACH region but Dtc sales across the region have accelerated, the company said.
In the Americas, On enjoyed 30 percent constant-currency sales growth in Q1. Sales in Brazil doubled year-over-year as the brand continues to build momentum in Latin American markets. In Asia-Pacific, sales growth in Japan paced the region. The company will operate approximately 30 doors in China by year-end.
All product categories enjoyed double-digit growth in Q1. Constant-currency shoe sales lifted 29 percent higher to CHF 484.7 million (€494.4m) ahead of launches for the Cloudrunner2 this week and Cloudsurfer in the late summer. Apparel, where sizing has been updated on most of the collection, posted a 25 percent sales gain to CHF19.7 million (€20.1m) and accessories revenues rose by 43 percent to CHF3.8 million (€3.9m).
