On Holdings Revenue Guidance Falls Short of Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 03 2026
0mins
Should l Buy ONON?
Source: seekingalpha
- Revenue Guidance Shortfall: On Holdings (ONON) issued a revenue guidance for FY26 that fell short of analysts' expectations, raising concerns about potential growth slowdown, leading to an opening share price drop of over 11%.
- Profit Decline: The company's net income margin decreased from 14.8% last year to 9.3%, with both unadjusted and adjusted earnings per share declining by approximately 20% to CHF0.21 and CHF0.25, respectively, indicating a significant reduction in profitability.
- Strong Sales Growth: Despite the profit decline, On Holdings generated CHF743.8M ($947.3M) in sales for Q4, a 23% year-over-year increase that slightly exceeded expectations of CHF743.1M, while gross profit margin improved by 180 basis points to 63.9%.
- Regional Performance Disparities: Sales in the Asia-Pacific region soared over 85%, significantly outperforming gains in the Americas (+21.3%) and EMEA (+2.5%), highlighting strong demand and potential growth opportunities in that market.
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Analyst Views on ONON
Wall Street analysts forecast ONON stock price to rise
21 Analyst Rating
18 Buy
2 Hold
1 Sell
Strong Buy
Current: 34.770
Low
30.00
Averages
60.79
High
85.00
Current: 34.770
Low
30.00
Averages
60.79
High
85.00
About ONON
On Holding AG is a Switzerland-based company active in athletic sports accesories industry. The Company provides footwear and sports apparel and is engaged in developing and distributing performance sports products, through independent retailers and global distributors. The Company sells its products trough the internet and its own stores.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Stock Price Decline: Following the executive changes announcement, On Holding's stock price dropped, reflecting investor apprehension regarding the uncertainty of the company's future leadership and potential risks that may affect its performance in a competitive market.
- Legal Investigation Initiated: Johnson Fistel is investigating whether On Holding complied with federal securities laws, particularly regarding the executive changes and their impact on investor losses, aiming to seek compensation for affected investors.
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See More
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- Lululemon's International Strength: Despite pressure in the North American market, Lululemon's international revenue grew 17% year-over-year, with China alone seeing a 24% increase, showcasing the effectiveness of its localized product strategy and suggesting significant long-term growth potential.
- On Holding's Growth Momentum: On Holding's Cloud footwear line has quadrupled its annual revenue since 2021, with a 23% year-over-year revenue increase last quarter and a record gross margin of 64%, highlighting its strong pricing power even amid weak consumer spending.
- Nike's Challenges: Nike's stock has fallen about 70% from its peak, yet many companies in the retail sector continue to post relatively strong financial results while facing macroeconomic pressures, suggesting that investors should focus on businesses with multiple growth engines.
See More
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- Nike's Stock Decline: Nike's (NKE) stock has fallen about 70% over the past few years, primarily due to self-inflicted issues and softer consumer spending, which has pressured sales and negatively impacted share performance.
- Amazon's Market Leadership: Amazon (AMZN) became the top apparel seller in 2018, and in 2025, its online store sales rose 9% year-over-year to $269 billion, showcasing its robust fulfillment network and AI technology that enhance customer loyalty and drive sales growth.
- Lululemon's International Expansion: Lululemon (LULU) has shown strong performance in international markets, particularly in China where revenue grew 24% year-over-year, contrasting with Nike's 7% decline in the same region, indicating Lululemon's effective localization strategy and significant long-term growth potential.
- On Holding's Growth Potential: On Holding (ONON) has seen its Cloud footwear franchise revenue quadruple since 2021, with a 23% year-over-year revenue increase last quarter despite weak consumer spending, and a gross margin of 64%, highlighting its superior pricing power and attractive long-term growth outlook.
See More
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- Earnings Performance: Nike's Q3 revenue remained flat at $11.28 billion, down 3% in constant currency, slightly exceeding the market expectation of $11.23 billion; however, the overall performance failed to boost market confidence, leading to a 9% drop in after-hours trading, hovering near an eight-year low.
- Gross Margin Decline: Gross margin fell by 130 basis points to 40.2%, primarily due to tariffs in North America, while selling, general, and administrative expenses rose 2% to $3.98 billion, resulting in a 23% decline in operating income to $635 million, reflecting pressure on the company's cost control efforts.
- Inventory Clearance Strategy: Management indicated that efforts to clear excess inventory of classic styles are expected to reduce revenue by over $4 billion, with this strategy causing a five-point headwind on revenue in the quarter, highlighting the lengthy road ahead for Nike's turnaround.
- Cautious Future Outlook: Management forecasts a revenue decline of 2%-4% in Q4, with growth in North America but continued declines in China and Converse, casting a dim overall outlook; investors should monitor the target for gross margin recovery in Q2 FY2027, as failure to achieve this may significantly impact Nike's turnaround plans.
See More
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- Flat Financial Performance: Nike reported revenue of $11.28 billion, down 3% in constant currency, slightly above the market expectation of $11.23 billion; however, the overall performance failed to excite investors, leading to a 9% drop in after-hours trading, hovering near an eight-year low.
- Declining Gross Margin: Gross margin fell by 130 basis points to 40.2%, primarily due to tariff impacts in North America, while selling, general, and administrative expenses rose 2% to $3.98 billion, resulting in a 23% decline in operating income to $635 million, reflecting challenges in cost management.
- Inventory Clearance Strategy: Management indicated that efforts to clear excess inventory of classic styles negatively impacted revenue by five percentage points this quarter, with expectations of reducing over $4 billion in revenue from classic footwear franchises, highlighting difficulties in Nike's turnaround process.
- Cautious Future Outlook: Nike anticipates a revenue decline of 2%-4% in the fourth quarter; while North America shows growth, ongoing declines in China and Converse cast a shadow on the overall outlook, with management projecting a return to gross margin growth only by Q2 2027, disappointing investors.
See More
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- Stagnant Sales Growth: Nike's revenue growth flatlined in fiscal 2024 as declining sales in North America and a strong dollar offset gains in China and other overseas markets, leading to increased market pressure on the company.
- Declining Gross Margin: The gross margin dropped from 43.5% in fiscal 2023 to 42.7% in fiscal 2025, as Nike relied on markdowns to boost sales and reduce inventory, resulting in a significant drop in EPS from $3.23 to $2.16, reflecting a decline in profitability.
- Intensified Market Competition: Nike is at a disadvantage against competitors like Adidas, On Holding, and Lululemon, particularly as the latter began selling its own branded shoes in 2022, further eroding Nike's market share.
- Strategic Adjustments: Nike is attempting to stabilize its business by increasing the sales mix of full-price and premium products, launching new marketing campaigns, and rebuilding relationships with wholesale retailers, although it still relies on markdowns for short-term sales boosts.
See More
Johnson Fistel Investigates On Holding AG for Potential Investor Claims
- Executive Changes Impact: On Holding AG announced that co-founders David Allemann and Caspar Coppetti will serve as Co-CEOs, Scott Maguire was promoted to President & COO, and CEO Martin Hoffmann will step down on May 1, 2026, leading to market concerns and a subsequent decline in stock price.
- Stock Price Decline: Following the executive changes announcement, On Holding's stock price dropped, reflecting investor apprehension regarding the uncertainty of the company's future leadership and potential risks that may affect its performance in a competitive market.
- Legal Investigation Initiated: Johnson Fistel is investigating whether On Holding complied with federal securities laws, particularly regarding the executive changes and their impact on investor losses, aiming to seek compensation for affected investors.
- Investor Rights Protection: The law firm is recognized for its success in securities class actions, having recovered approximately $90.725 million for clients, demonstrating its capability and influence in advocating for investor rights.
See More
