Running shoe company On once again generates significantly higher sales
Published: Tuesday, Nov 14th 2023, 11:20
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The Zurich-based running shoe company On remains on course for growth after nine months. The company, which is listed on the New York Stock Exchange, also sold significantly more shoes in the third quarter. In particular, direct sales to customers increased. The target for the year as a whole has now been raised.
From July to September, sales rose by 47 percent to CHF 480.5 million, as the company announced on Tuesday. After nine months, this represents an increase in turnover of 57 percent to 1.35 billion Swiss francs.
With an increase of 55%, sales in the third quarter were particularly strong in the direct-to-consumer (DTC) sales channel. However, On still generated two thirds of its sales in the retail trade, where growth amounted to 43%. However, the direction is clear. The Zurich-based company wants to grow faster in the DTC channel, according to reports.
Highest gross margin since IPO
The higher proportion of direct sales is also helping to increase profitability. The gross margin rose from 57.1% to 59.9% in the third quarter, the highest level since the IPO two years ago. In addition to the higher proportion of DTC, more favorable exchange rates and the elimination of extraordinary air freight usage also helped here.
Adjusted operating profit (adjusted EBITDA) rose 44% year-on-year to 81.3 million in the third quarter. At 58.7 million, net profit was almost three times as high as in the same period of the previous year.
More sales expected
Looking ahead, the company, in which former tennis star Roger Federer also holds a stake, remains very optimistic. Due to the "strong" results, the outlook for the year as a whole has been raised.
On is now aiming for sales of CHF 1.79 billion (previously CHF 1.76 billion). The gross margin should also be "at least" 59 percent (previously 58.5 percent). Meanwhile, the outlook for the adjusted EBITDA margin remains unchanged at 15 percent.
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