On Holding AG Q2 2026 Earnings Call Summary

Moby Intelligence

Wed, August 12, 2026 at 5:56 AM GMT+3 3 min read

On Holding AG Q2 2026 Earnings Call Summary - Moby

Strategic Performance Drivers

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Performance was characterized by a sharp divergence between direct-to-consumer (DTC) strength and a disciplined pullback in wholesale to protect full-price integrity.
DTC momentum reached record levels, growing 34% at constant currency, driven by a younger consumer cohort where 1/3 of customers are now under age 34.
Management intentionally moderated wholesale sell-in, particularly in the Americas, to avoid building excess channel inventory that would necessitate discounting.
The 'movement class' demographic is expanding the addressable market, treating health and longevity as status symbols, which fueled 40% growth in the training vertical.
Apparel is becoming a primary entry point for the brand, with sales nearly tripling in the tennis category and reaching a record 28% share of running campaign sales.
Operational efficiencies and a favorable channel mix allowed the company to absorb higher U.S. import tariffs while still expanding gross margins to 65.4%.

Strategic Outlook and Guidance Assumptions

Full-year constant currency net sales growth is projected in the low 20s, reflecting deliberate wholesale restraint to clear the runway for 2027 innovations.
Gross margin guidance was raised to at least 65%, predicated on significant DTC mix expansion and continued full-price execution for the remainder of the year.
The innovation pipeline is accelerating, with a plan to update all everyday running franchises with new foam technologies and precision fit within the next 14 months.
Management expects Q3 growth to be lower than Q4 due to the timing of wholesale recalibration actions taken in the Americas.
Adjusted EBITDA margin guidance of 19.5% to 20% is maintained, as gross margin gains are balanced against continued investments in brand building and digital ecosystems.

Operational Risks and Structural Changes

U.S. import tariffs remain a headwind, though management noted that current margin guidance does not yet include anticipated tariff refunds expected in the second half.
Inventory levels increased 30% year-over-year, primarily driven by volume growth and foreign exchange movements rather than excess stock.
The leadership structure was unified under Co-CEOs to reinforce founder-led DNA while scaling into a multi-decade global sports brand.
Selective retail expansion continues with a The company is focusing on store clusters in regions like Germany and the Nordics, while noting that its two Tokyo stores continue to perform exceptionally with no signs of cannibalization.

Q&A Session Highlights

Confidence in industry growth despite broader athletic wear slowdown

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Management believes the 'movement class' represents a permanent societal shift where sports gear is an identity marker rather than just a utility.
On's premium positioning and innovation focus allow it to capture market share from incumbents even in a competitive environment.

Drivers behind the increased gross margin guidance

The uplift is almost entirely attributable to a higher-than-expected DTC sales mix and the continued success of the full-price strategy.
Operational efficiencies in distribution and last-mile fulfillment are also contributing to the sustainable margin profile.

Duration and scope of wholesale sell-in limitations

The wholesale softness is localized to the Americas everyday running franchises and is viewed as transitory.
A massive product rollout starting in October with the Cloudsurfer 3 is expected to re-energize the channel through late 2027.

Pricing strategy and potential for price resistance

Management is 'opening the aperture' of pricing, maintaining a $160 entry point while scaling high-demand performance models toward $300.
There is no intent to lower prices; instead, the brand is leveraging elite technology like LightSpray to command higher premiums.