On Holding ( NYSE: ONON ) shares ran over 10% lower on Wednesday after missing EPS expectations for the third quarter.
The Swiss apparel and footwear manufacturer notched CHF 0.07 ($0.07) in earnings per share, below the $0.12 expected by analysts. Gross profit margin decreased to 57.1% from 60.2% amid inflationary and supply chain pressures impacting the company. However, an over 50% jump in revenue to CHF 328.01M ($347.98M), above the $330.4M expectation.
After the mixed report, management nonetheless voiced confidence in the company’s ability to continue to grow sales and promote profitability despite supply chain troubles.
“The strong nine-month results and the strong order books for Q4 and beyond give us a lot of confidence going into the last months of the year and into 2023, putting us in a position to again increase our net sales outlook for the full year 2022,” CEO Martin Hoffmann said.
Management now expects CHF 1.125B ($1.193B) up CHF 25M ($26.52) from prior forecasts and slightly above the $1.18B consensus. Adjusted EBITDA expectations were also raised to CHF 148M ($157M), up from CHF 145M ($153.83M) guided in August.
“While On expects continued margin pressure from the combination of a strong USD and weak EUR compared to its reporting currency CHF, the current demand puts On in a strong position to further increase absolute and relative profitability,” the company stated.
Despite the confidence from management and raised forecasts, shares of the Zurich-based company fell 11.08% on Wednesday.
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On Holding stock slides despite hiking sales outlook