Running shoe company On continues on record course after second quarter
Published: Tuesday, Aug 13th 2024, 11:30
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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 Zurich-based company, which is listed on the New York Stock Exchange, confirmed its outlook for the year as a whole.
From April to June, sales rose by 28 percent to 568 million Swiss francs, as On announced on Tuesday. At constant exchange rates, growth was as high as 29 percent. The company had already clearly exceeded the figures for the record year 2023 in the first quarter.
In the largest market, America, On increased sales by around a quarter to CHF 370 million in the second quarter. The Asia-Pacific region continued to show the strongest momentum with an increase of 74% to 59 million. Sales in the Europe, Middle East and Africa (EMEA) region also rose sharply by 22% to 138 million.
Higher profitability
The higher proportion of direct sales at full price had a positive impact on profitability, the report continues. The more favorable freight rates compared to the previous year also helped. The gross profit margin rose to 59.9% from 59.5% in the previous year and the EBITDA margin climbed by almost 2 percentage points to 16.0%.
The bottom line was a net profit of CHF 30.8 million, which is almost ten times higher than in the same quarter of the previous year. At that time, high costs due to a temporarily higher proportion of air freight had weighed on the profit figures.
Outlook confirmed
The company, in which Roger Federer also holds a stake, has confirmed its previous target for the current year: Currency-adjusted sales should increase by "at least 30 percent". At current exchange rates, this would correspond to at least 2.26 billion Swiss francs, according to the statement. In 2023, On exceeded the billion franc mark for the first time with 1.22 billion francs.
At the same time, the gross profit margin is expected to be around 60% in the current year. The adjusted EBITDA margin is still expected to be in a range between 16.0% and 16.5%.
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