Running shoe company On remains on record course
Published: Tuesday, Aug 13th 2024, 13:40
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The running shoe company On continued its record run in the second quarter. Sales rose sharply and margins also improved. The Olympic Games, which ended on Sunday, should provide a further boost in the long term.
Sales climbed by 28% to 568 million Swiss francs in the second quarter, as the Zurich-based company, which is listed on the New York Stock Exchange, announced on Tuesday. The company had already clearly exceeded the figures for the record year 2023 in the first quarter. The operating margin at EBITDA level also improved by almost two percentage points to 16 percent.
Boost from the Olympics
The management is thoroughly satisfied with what has been achieved: "We have continued to grow across all sales channels and regions this quarter," said Co-CEO and CFO Martin Hoffmann in an interview with the news agency AWP. In addition to continued growth, the focus was also on long-term positioning and new partnerships.
Hoffmann hopes that the Olympic Games in Paris, which only began after the deadline at the end of June, will further increase the level of awareness. "We are proud that we were represented by 66 athletes and won 6 medals." However, as expected, the direct impact on sales figures remained "relatively small".
The "LightSpray technology", a new process for manufacturing performance running shoes presented at the Games, was also very well received. "The feedback from the athletes was consistently positive." The task now is to further develop the technology and scale up production.
Fashion is becoming more important
On has also seen strong growth in clothing and accessories since the beginning of the year. "In our new store in Paris, every fourth item sold already comes from this category." The range is also to be constantly expanded with a view to the future.
However, the lion's share of On's turnover is still attributable to the footwear category. The company, in which Roger Federer also has a stake, has turned over 1.03 billion in running shoes since the beginning of the year. This is equivalent to an increase of almost a quarter compared to the previous year.
Overall, the company believes it is on course to pulverize the previous year's record with its sales figures by the middle of the year. In 2023, On exceeded the billion franc mark for the first time with sales of 1.22 billion francs.
If everything goes as planned, sales in 2024 should rise to "at least CHF 2.26 billion" at current exchange rates, as the management confirmed the target for the current year. Despite higher marketing expenditure, the operating profit margin at EBITDA level is also expected to increase further to between 16 and 16.5.
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