Regionally, the EMEA, lapsing the final year-over-year comparison from strategic store closure in FY23.
The Swiss group is forecasting a constant currency growth rate of at least 27 percent this fiscal year to at least 2.94 billion Swiss francs or more than €3 billion at current exchange rates. On shares rose more than 5.8 percent on the New York Stock Exchange yesterday after the company reported strong Q4 and FY24 results that exceeded expectations.
In the final period, operating income rose 30 percent to CHF53.1m (€56.5m) on 36 percent revenue growth to CHF606.6 million (€645.6m) and 170-basis-point gross margin expansion to 62.1 percent. Direct-to-consumer sales grew by 43 percent to CHF296.2 million (€315.3m) and wholesale revenues increased by 29 percent to CHF310.4 million (€330.4m). Footwear sales stepped 34 percent higher in Q4 to CHF568.8 million (€605.4m). Apparel revenues rose by nearly 78 percent to CHF32.6 million (€34.7m) and accessory sales expanded by 80 percent to CHF5.2 million (€5.5m).
Regionally, the EMEA, lapsing the final year-over-year comparison from strategic store closure in FY23, reported a 31 percent increase in Q4 sales to CHF147.4 million (€156.9m) with significant growth in the Southern European markets of France and Italy where retail store in Paris and Milan “created a noticeable halo effect,” CFO and co-CEO Martin Hoffmann said. Elsewhere, Americas’ revenues grew by 28 percent to CHF385.1 million (€409.9m) and year-over-year sales in Asia-Pacific increased by almost 118 percent to CHF74.1 million (€78.9m).
For FY24, as On experienced 6 to 8 percent sales growth in consumers ages 35 and under purchasing its three top running styles –Cloudmonster, Cloudsurfer, and Cloudrunner, the company posted a 17 percent increase in operating income to CHF211.6 million (€225.2m) and 29 percent revenue growth to CHF2,318.3 million (€2.47b). The annual gross margin expanded by 100 basis points to 60.6 percent and operating cash flow more than doubled year-over-year to CHF510.6 million (€543.4m). FY24 net income grew nearly 205 percent to CHF242.3 million (€257.9m) from CHF79.6 million.
Annual constant-currency sales rose by 19.9 percent in the EMEA to CHF577.8 million (€615.0m), by 31 percent in the Americas to CHF1,480.3 million (€1.58b) and by 95.6 percent in Asia-Pacific to CHF260.2 million (€276.9m). Dtc revenues expanded by 44.6 percent to CHF942.8 million (€1.0b) and wholesale increased by 26 percent to CHF1,375.5 million (€1.46b). By segment, annual footwear sales increased by 32 percent to CHF2,199.6 million (€2.34b); apparel sales jumped by 51 percent to CHF101.0 million and accessory revenues rose by 54 percent to CHF17.7 million (€18.8m).
More details on FY25 outlook
While it anticipates sales growth of at least 27 percent, On is forecasting a higher rate in H1. Additionally, the group expects to achieve an adjusted Ebitda margin of 17.0-17.5 percent versus 16.7 percent in FY24 and maintain a gross margin of approximately 60.5 percent. The brand’s total number of wholesale door is forecast to increase approximately 5.6 percent to 11,300 from 10,700 that including a partnership with Snipes in Europe and expanded exposure in the likes of Foot Locker, JD Sports and Dick’s Sporting Goods in the US. In China, there are plans to expand from 58 stores at the end of FY24 to about 80, split evenly between owned and franchised locations.
