Swiss sportswear brand On posted a strong second quarter, with revenue jumping 32% year-over-year, prompting the company to increase its full-year sales and margin outlook despite facing new import tariffs from Vietnam.
The company now expects 2024 sales of 2.91 billion Swiss francs ($3.58 billion), up from its earlier forecast of 2.86 billion francs. That figure closely matches analyst expectations of 2.92 billion francs, according to LSEG data. On also lifted its projected gross margin range to 60.5%–61%, compared to the previous 60%–60.5% guidance.
Shares of On climbed 7% in early Tuesday trading on the news.
Managing Tariffs and Price Increases
Roughly 90% of On’s products are sourced from Vietnam, meaning recent U.S. tariffs have impacted costs. The company implemented targeted price increases on July 1 to offset the hit, focusing more on its lifestyle segment while keeping prices steadier for its performance running products.
“So far, we haven’t seen a slowdown in demand from either consumers or wholesale partners,” CEO Martin Hoffmanntold CNBC, expressing confidence in the brand’s positioning.
Beating Wall Street Expectations
On exceeded Wall Street’s Q2 sales estimates:
- Revenue: 749 million francs vs. 705 million francs expected
- Wholesale revenue: 441 million francs vs. 429 million francs expected
- Direct-to-consumer revenue: 308 million francs vs. 279 million francs expected
Net results, however, swung to a loss of 40.9 million francs (12 cents per share), compared to a profit of 30.8 million francs (10 cents per share) in the same period last year, with currency exchange fluctuations between the Swiss franc and U.S. dollar driving much of the decline.
Growth Across Regions
Sales were ahead of expectations in all major markets — the Americas, EMEA, and Asia-Pacific. China was a standout, delivering approximately 50% year-over-year sales growth in the quarter, driven by strong same-store performance, expanding e-commerce, and new store openings.
Strategic Positioning in the Sportswear Market
Founded in 2010, On has built a reputation for premium performance footwear, gaining ground against industry giants like Nike. While its total sales remain a fraction of Nike’s, the company has consistently delivered double-digit growth, even in a softer global sneaker market.
One pillar of its success has been maintaining a balanced mix of wholesale and direct sales, filling retail shelf space vacated by Nike while also expanding its own store network and online presence.
With continued demand in key regions and a growing international footprint, On is positioning itself as one of the most dynamic players in the global sportswear sector.
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