On Holding Reports Strong Earnings but Stock Drops
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 03 2026
0mins
Source: Fool
- Significant Sales Growth: On Holding reported a 35.6% year-over-year increase in sales, surpassing 3 billion Swiss francs (approximately $3.84 billion) for the first time, although it fell short of analysts' expectations of 3.7 billion francs, indicating strong market demand but raising investor concerns.
- Profitability Improvement: The company's gross profit margin reached 62.8%, leading the industry and demonstrating high brand value and customer loyalty, allowing it to avoid holiday discounts and maintain profitability, thereby enhancing future market competitiveness.
- Stock Volatility: Despite strong earnings, On Holding's stock dropped as much as 14.3% following the report, with a 6.95% decline as of 2:08 PM, reflecting market caution regarding future growth expectations.
- Investment Opportunity: With the stock down about 10% over the past year, analysts suggest investors consider buying at the current dip, believing On Holding possesses a consumer base and brand recognition akin to global luxury brands, with potential for price and margin increases in the future.
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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: 39.810
Low
30.00
Averages
60.79
High
85.00
Current: 39.810
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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- Consumer Spending Trends: The athletic apparel industry faces challenges from slowing consumer spending, particularly in North America; although On Holdings and Adidas excel in pricing new products, the overall market must focus on pricing power and inventory management.
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- Board Election Showdown: At the upcoming annual meeting, Lululemon will face a contest between Wilson's nominees and its own, including former Levi Strauss CEO Chip Bergh, reflecting strategic considerations in the leadership restructuring process.
- Increased Market Pressure: Lululemon has faced mounting pressure in the U.S. market over the past two years, particularly due to tariffs and weak consumer confidence, resulting in a nearly 43% drop in its stock price this year, highlighting the challenges the company faces in the competitive athleisure market.
- New CEO Appointment: Lululemon has appointed former Nike executive Heidi O'Neill as its new CEO, and while her appointment raises market concerns, the company is confident that her extensive experience will bring a turnaround for the brand, emphasizing her potential in rapid growth and brand revitalization.
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- Gross Margin Decline: Nike's gross margin contracted by 130 basis points to 40.2%, with North American tariffs exerting 300 basis points of pressure, marking the sixth consecutive quarter of year-over-year declines, highlighting significant cost challenges for the company.
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See More
