On Holding AG Q4 FY2025 earnings call

David highlighted the brand's journey since IPO, with demand for the brand accelerating, outperforming ambitious expectations at the start of 2025. The societal shift to the movement class drives the brand's strategy, focusing on relentless performance innovation, premium inspiration, and a complete expression of the brand from toe to head. Martin mentioned that in 2025, ON crossed the 3 billion Swiss franc net sales mark, with growth re-accelerated, record gross profit margin and adjusted EBDA margin. The brand expanded its reach, global awareness approached 30%, D2C share increased globally, retail footprint scaled, multicategory expansion was a standout driver with apparel and accessories growth. Q4 results were strong with net sales growth, D2C channel performing well, retail network and wholesale delivering exceptional results across regions.

In 2025, ON Holding AG first cleared the 3 billion Swiss franc revenue hurdle. Sales grew 36% at constant currency. For product segments, net sales from shoes reached 687.3 million Swiss francs, increasing 20.8% reported and 28.8% at constant currency. Apparel net sales reached 45.1 million Swiss francs, growing 38.3% reported and 46% at constant currency. Apparel share of sales climbed across every region and channel, with a significant increase in D2C business. Apparel's net sales growth at constant currency was 76% in 2025, and it now represents 7% of total net sales, a meaningful increase of 190 basis points year over year.

In 2026, ON expects net sales to grow at least 23% at constant currency. Anticipates a reported net sales target of at least 3.44 billion Swiss francs. Adjusted EBITDA margin is expected in the range of 18.5% to 19%. Expects full year gross margin of at least 63% above the 2025 result. D2C is expected to outperform wholesale, and apparel is set to meaningfully outpace overall growth.

Today's call contains forward-looking statements subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to the 20F filed with the SEC for a detailed discussion of such risks and uncertainties. Risks include those related to foreign exchange fluctuations, tariffs, and other factors that could impact operational results and financial performance.

Q: Jonathan Comp asked about expectations for growth across regions in 2026 and key drivers in North America.

A: Martin and David responded that there's strong momentum globally, D2C channel expected to grow stronger with innovation, strong product pipeline, and positive reaction from the run specialty community.

Q: Janine Stichter inquired about wholesale distribution expansion.

A: Janine was told there's opportunity to expand in key accounts globally, focusing on premium customer experience and driving apparel sales in key accounts.

Q: Anna Andreeva asked about 2026 growth momentum and DTC new customer ads.

A: Martin responded on strong growth across regions, apparel as an entry point for younger consumers, and co-created products with Zendaya driving appeal to younger female consumers.

Q: Alina asked about investor day arrangement, growth slowdown regions, and LightSpray product占比.

A: David and Martin discussed investor day timing, strong growth across regions, and LightSpray technology's momentum and democratization.

Q: Cristina Fernandez asked about brand awareness regional差异 and毛利率.

A: Martin responded on brand awareness potential, cross-margin strength embedded in the business, and upside to guidance based on tariff regime.

Q: Aubrey Tianello asked about EBITDA margin related line items.

A: Response was on operations and supply chain driving efficiencies, reinvesting into the brand while driving profitability.

Q: Jay Sol asked about target market size, share, and毛利率提升效率.

A: David and Martin talked about the huge growth opportunity beyond traditional sportswear market, premium position driving pricing power, and inventory strength enabling full price sales.