Swiss shoemaker On Holding AG topped estimates after faster-than-expected growth in the US of its running and lifestyle sneakers.
(Bloomberg) — Swiss shoemaker On Holding AG topped estimates after faster-than-expected growth in the US of its running and lifestyle sneakers.
First-quarter sales of 420 million Swiss francs ($470 million) exceeded the 383-million franc average analyst estimate, and profit also beat expectations.
The Roger Federer-backed shoe company is enjoying strong demand, especially in the Americas, as it eats into market share from bigger rivals like Adidas AG, Nike Inc. and Puma SE. The Zurich-based firm has expanded from its Swiss roots as a quirky, performance-running shoe brand to become one of the hottest companies in the athletic leisure shoe sector.
The company needs to report strong growth to justify its share performance. Shares in On have almost doubled this year, far outperforming Nike and Adidas.
The Swiss brand said Tuesday sales jumped 92% in the Americas to reach 270 million francs in the first quarter, while growing 52% in Europe to 119 million.
“Our focus is on durable growth,” Co-Chief Executive Officer Martin Hoffmann said in a phone interview. Whenever On jumps into new markets, “we don’t play all the cards in one season, but we stretch it over a period of time.”
On also had a couple of professional sports milestones, with Kenyan runner Hellen Obiri winning the Boston Marathon last month outfitted in On shoes and apparel, while rising tennis star Iga Świątek won the Stuttgart Open.
The brand’s momentum is catching the attention of its biggest competitors. Earlier this month, Adidas Chief Executive Officer Bjorn Gulden told analysts that brands like On and Hoka are changing the market dynamics by taking performance running shoes more mainstream.
“We need to make sure that we very quickly are having an answer to that, and that’s what we’re working on,” Gulden said.
On also nudged its full-year sales guidance higher to at least 1.74 billion francs, which is roughly in line with analyst estimates.
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