2023-08-15 08:21:25 ET
On Holding AG( NYSE: ONON ) slumped in early trading on Tuesday after warning that a strong Swiss franc is cutting into earnings results more than anticipated.
Revenue jumped 52.3% during Q2 and was up more than 60% on a constant currency basis. The company said the strong results were driven by the high end-consumer demand. Net sales in the direct-to-consumer channel outgrew the wholesale channel, increasing by 54.7% year-over-year. On Holding ( ONON ) saw broad geographic sales growth, with sales up across the Europe, Middle East and Africa (+28.9% year-over-year), Americas (+59.8%), and Asia-Pacific (+90.2%) regions. Sales by product were also strong across shoes (+52.6%), apparel (+45.9%), and accessories (+45.4%).
On Holding's gross profit margin increased to 59.5% from 55.1% during the quarter, but net income fell 93.3% and EPS was down a penny from a year ago. Adjusted EBITDA rose 99.6% during the quarter.
Looking ahead, On Holding ( ONON ) said it is again raising its outlook for the full fiscal year, and now expects to reach net sales of CHF 1.76B to represent a year-over-year growth rate of 44.0%. On is maintaining its previous outlook on gross profit margin and adjusted EBITDA margin of 58.5% and 15.0% respectively. As it relates to gross profit margin, On holding ( ONON ) sees the potential to exceed the 58.5% mark in the case of an ongoing US Dollar weakness versus the Swiss Franc and absent any significant offsets from other currencies. Notably. On Holding ( ONON ) said it is "extremely pleased" with the feedback on the Cloudboom Echo 3 product, which was more broadly launched in Q2 and is the company's fastest long-distance running shoe yet.
Shares of On Holdings ( ONON ) fell 8.64% premarket to $31.62 vs. the 52-week trading range of $15.44 to $37.08.
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On Holding falls 9% after strong Swiss franc cuts into Q2 results