Detailed narrative
Premium Strategy and Innovation Driving Growth
On's founder-led DNA and commitment to innovation are central to its premium strategy, focusing on superior technology, unique design, and cultural relevance. This approach enables the brand to scale globally without compromising its premium positioning or margin ambitions, fostering a highly defensible financial profile. The company emphasizes long-term value creation over short-term volume, as evidenced by its disciplined management of wholesale channels.
Exceptional Direct-to-Consumer Momentum
The direct-to-consumer (DTC) channel demonstrated exceptional momentum in Q2 FY26, growing 34.3% at constant currency to CHF 388 million, representing a record 45.7% of total sales. This strong performance was driven by deep consumer demand, increasing brand awareness (now 30%), and successful engagement with younger consumers, with over one-third of the customer base under 34.
E-commerce growth exceeded expectations across all regions, and retail stores also performed very well, with strong growth in new doors and comparable sales.
Disciplined Wholesale Management
In contrast to DTC, wholesale growth was more moderate at 12.7% at constant currency, particularly in the Americas. The sell-out of everyday running franchises tracked below ambitions in a highly promotional multi-brand marketplace. On deliberately chose to hold back sell-in rather than build channel inventory, protecting full-price integrity and partner inventory health.
This strategic decision, while impacting short-term wholesale growth, is intended to ensure optimal positioning for launching significant innovations in 2027.
Strong Geographic Performance
EMEA was a standout region, with net sales up a very strong 20.5% at constant currency, benefiting from past strategic channel pruning and robust performance in Southern Europe (France, Spain, Italy). APAC delivered exceptional growth of 54.7% at constant currency, contributing 20% to global share, with strong results in Japan, Korea, and Greater China, including successful new store openings in Macau.
Americas growth was impacted by the aforementioned wholesale dynamics, though DTC momentum accelerated in North and Latin America.
Product and Category Expansion
On's innovation engine continues to anchor its premium position, with breakthroughs like the Cloudboom Strike 2 (demonstrating a 1.6% improvement in running economy) and the scaling of LightSpray technology. The brand is successfully expanding into new sports verticals, with tennis sales nearly tripling and the training vertical growing 40%.
Lifestyle products, such as the Cloudtilt franchise, are also performing strongly, capturing top selling positions in Foot Locker Europe. Apparel grew 56.2% at constant currency, becoming a significant growth driver and achieving a record 28% share of running campaign net sales.
Robust Profitability and Financial Health
The company achieved an outstanding gross margin of 65.4% and an adjusted EBITDA margin of 19.8%, driven by strong DTC momentum, disciplined execution, and continued operational efficiencies. These efficiencies allowed On to absorb external pressures🌐, including higher U.S. import tariffs, and still expand margins.
Net working capital improved by CHF 14.9 million, and the cash balance increased by CHF 185.2 million, ending with over CHF 1.2 billion in net cash, providing a strong financial position to fund innovation, stores, and brand building.
Talent Architecture and Future Outlook
On is strategically strengthening its leadership team to support its next chapter of scale, with key promotions like Rebecca Kaye to Chief Global Markets Officer and the addition of Alice Delahan as Chief Customer Officer. The company remains confident in its premium growth strategy, projecting full-year net sales growth in the low 20s at constant currency, a gross margin of at least 65%, and an adjusted EBITDA margin of 19.5% to 20%, with an Investor Day planned for September to detail its long-term roadmap.