By Neil J Kanatt
(Reuters) -On Holding raised its annual sales forecast on Tuesday as its focus on brand promotion drove demand for its athletic-focused apparel and footwear, sending its shares up about 10% in premarket trade.
The Swiss company has been grabbing market share in the U.S. from rivals, including Adidas and Nike, by trying to appeal to younger customers through high-profile collaborations and product innovations.
The Roger Federer-backed company, seen as a premium brand, hiked prices by about $10 mainly on lifestyle-focused offerings in July.
“We are very clear, we want to be the most premium brand, and as that, will also need to lead with pricing on the premium position,” said CEO Martin Hoffmann.
“But now, looking into the rest of the year, we don’t need more pricing,” he added.
On has been launching new products, including the Cloudsurfer Max shoes, which retail for $180, alongside its ongoing partnerships with actress Zendaya and musician FKA Twigs.
The company faces a 20% tariff on goods imported from Vietnam, a key source of its finished products.
“We have been paying 20% tariffs on the majority of our imports into the U.S., and now with the latest numbers, those tariffs go up to 40% for Vietnam,” Hoffmann said.
On expects full-year 2025 net sales of at least CHF 2.91 billion ($3.60 billion), compared to previous expectations of at least CHF 2.86 billion.
The company forecast annual adjusted earnings before interest, taxes, depreciation, and amortization margin in the range of 17% to 17.5%, compared to its previous expectation of 16.5% to 17.5%.
For the second quarter ended June 30, sales increased 32% to CHF 749.2 million, exceeding estimates of CHF 705.3 million, according to data compiled by LSEG.
Shoe segment net sales rose 29.9% while apparel sales jumped 75.5% in the quarter.
However, On posted an adjusted loss per share of CHF 0.09, compared with an estimated profit of CHF 0.21, due to a weaker dollar.
($1 = 0.8093 Swiss francs)
(Reporting by Neil J Kanatt in Bengaluru; Editing by Sriraj Kalluvila)
