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: 35.610
Low
30.00
Averages
60.79
High
85.00
Current: 35.610
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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- Leadership Change: Former CEO Calvin McDonald stepped down last December, and O'Neill's appointment is seen as an attempt to pivot the company amid brand saturation and increasing competition, yet the market's reaction has been notably negative.
- Industry Context: O'Neill spent nearly 30 years at Nike, where sales grew from $10 billion to $50 billion; however, Nike itself has faced a 75% stock decline, leading investors to approach her past performance with caution.
- Future Challenges: While O'Neill brings extensive industry experience, Lululemon currently requires a leader capable of innovation and turnaround to address brand fatigue and market competition, making the upcoming months' performance critical for investor sentiment.
See More
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- Optimistic Growth Outlook: Analyst Rick Patel noted that despite tariff and freight pressures, the company's robust growth and reduced FX impact will support performance, with expectations for significant growth in the athleisure and footwear markets this year.
- Leadership Change Concerns: Although On Holding's stock has declined over 21% year-to-date amid investor concerns regarding an upcoming leadership shakeup, analysts believe the long-term potential remains intact, suggesting now is a good time to buy shares.
- Market Consensus Support: According to LSEG data, of the 29 analysts covering On Holding, 25 have rated the stock as strong buy or buy, reflecting strong market confidence in the company's prospects.
See More
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See More
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- Intensifying Competitive Pressure: As rivals like On Holding AG and Deckers Outdoor Corp.'s Hoka gain market share, Nike's appeal among high-income consumers is under scrutiny, particularly with its Converse division struggling and operations in China facing ongoing pressure.
- Analyst Perspective Changes: At least six brokerages, including JPMorgan Chase and Goldman Sachs, have recently retracted their previously bullish views, signaling growing concerns about Nike's future performance and extending market expectations for its recovery timeline.
- Executive Buying Signal: Despite the challenges, Apple CEO Tim Cook disclosed a purchase of 25,000 shares at the April 10 low, leading to a 7.2% stock increase, indicating that some investors are still seeking opportunities, although Nike is on track for its fifth consecutive annual decline.
See More
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- Declining Financial Performance: Nike's net income fell 35% year-over-year in Q3 of fiscal 2026, resulting in a net profit margin of 4.6%, significantly down from 10% three years ago, indicating substantial pressure on profitability.
- Weakness in China Market: Sales in Greater China dropped 7% in the latest fiscal quarter, attributed to increased competition and a weak consumer environment, reflecting a loss of growth momentum in this critical market for Nike.
- Insufficient Product Innovation: Nike's heavy reliance on classic franchises has led to inventory flooding and diminished market appeal, allowing competitors like On Holding and Hoka to rapidly capture market share due to their innovative offerings.
- Running Segment Recovery: Despite challenges, Nike's running revenue increased by 20% last quarter, indicating potential recovery in this segment, while the CEO's strategic direction provides clarity for future turnaround efforts.
See More
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- Sales Decline in China: Nike's sales in Greater China dropped 7% in the latest fiscal quarter, primarily due to increased competition and a weak consumer environment, indicating a weakening growth engine in this critical market that could impact future market share.
- Significant Profit Drop: The company's net income fell 35% year-over-year in Q3, resulting in a net profit margin of 4.6%, down from 10% three years ago, highlighting substantial pressure on profitability that may affect investor confidence.
- Lack of Product Innovation: Nike's reliance on classic franchises has led to inventory overflow and diminished market appeal, allowing competitors like On Holding and Hoka to rapidly capture market share, underscoring the urgent need for product innovation.
- High-Risk Investment Choice: While Nike's brand still holds pricing power and market influence, analysts expect flat revenue and a 31% decline in diluted earnings per share for fiscal 2026, making investment in Nike a high-risk option suitable for patient investors.
See More
