On is up and running
Published: Tuesday, Nov 12th 2024, 12:20
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The running shoe company On continued to significantly increase sales in the third quarter of 2024. The operating profit margin also increased. Against this backdrop, the outlook for the year as a whole has been raised.
From April to June, the Zurich-based company, which is listed on the New York Stock Exchange, generated sales of CHF 635.8 million. This is 32 percent more than in the previous year. At constant exchange rates, growth amounted to 33 percent, as On announced on Tuesday.
On grew in all regions. In America, the largest market, sales rose by 34% to CHF 395.5 million. The Asia-Pacific region once again recorded the strongest growth (+79% to 74.6 million). In the Europe, Middle East and Africa (EMEA) region, sales rose by 15% to 165.8 million.
Profitability increases
Profitability also increased at the same time. At 60.6%, the gross margin in the summer quarter was higher than at any time since the IPO in 2021. In the same quarter of the previous year, it was 59.9%.
On attributes the increase to the significant rise in direct sales. Sales in the comparatively more profitable DTC channel increased disproportionately by around 50 percent in the third quarter. Together with "disciplined cost management", this also led to an increase in the operating profit margin (adj. EBITDA) to 18.9 percent from 16.9 percent, On announced.
The bottom line, however, was a lower net profit of 58.7 million francs. Compared to the same quarter of the previous year, this represents a drop of 48 percent.
Outlook increased
The company, in which Roger Federer also holds a stake, thus continued its record run. The running shoe specialist had already significantly increased sales in the first half of the year compared to the record year 2023.
The sales forecast for 2024 as a whole has also been increased: Currency-adjusted sales are expected to increase by at least 32% (previously: at least 30%). According to the information provided, this would correspond to sales of at least CHF 2.29 billion. In 2023, On had a turnover of 1.79 billion.
Due to the strong momentum in the DTC channel, the running shoe specialist is also forecasting a higher gross margin of 60.5% (previously 60.0%). The adjusted EBITDA margin is also expected to be "at the upper end" of the target range of 16.0% to 16.5%.
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