Q2 2024 On Holding AG Earnings Call

August 13, 2024

Krista: Thank you for standing by. My name is Krista, and I will be your conference operator today. I would like to welcome everyone to the On Hldg AG Second Quarter 2024 Results Conference Call. All lines have been placed on mute to prevent any background noise.

Thank you for standing by my name is Krista and I will be your conference operator today.

Speaker Change: I'd like to welcome everyone to the on holding AG second quarter 'twenty 'twenty four results conference call.

Speaker Change: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during that time simply press star followed by the number one on your telephone keypad and if you'd like to withdraw that question again press Star one. Thank you I will now turn the conference over.

Krista: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again, press star one. Thank you. I will now turn the conference over to Jerrit, who is Head of Investor Relations. Jerrit, you may begin.

Krista: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. And if you would like to withdraw that question, again press star one. Thank you. I will now turn the conference over to Jerrit, who is Head of Investor Relations. Jerrit, you may begin.

Speaker Change: Jarrett, who is head of Investor Relations Jared you may begin.

Jerrit: Good afternoon. Good morning to our investor community. Thank you for joining us on the 2024 second quarter earnings conference call and webcast. With me today on the call are Owens Executive Co-Chairman and Co-Founder David Allemann, CFO and Co-CEO Martin Hoffmann, and Co-CEO Marc Maurer.

Jerrit: Good afternoon, and good morning to our investor community. Thank you for joining the ONS 2024 second quarter earnings conference call and webcast. With me today on the call are Executive Code Chairman and co-founder David Allemann, CFO and co-CO, Martin Hoffmann, and co-CO, Marc Maurer. Before we begin, I will briefly remind everyone that today's call will contain forward-looking statements within the meaning of the federal security law. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially.

Speaker Change: Good afternoon, and good morning to our Investor community. Thank you for joining <unk> 2024 second quarter earnings conference call and webcast with.

Speaker Change: With me today on the call are on executive co Chairman and co founder David Alibaba.

CFO and co CEO, Marc Hoffman and co CEO Marc Mauer.

Jerrit: Before we begin, I will briefly remind everyone that today's call will contain forward-looking statements within the meaning of the federal security law. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our 20th Annual Report on Form SEC filed on March 12th for a detailed discussion of such risks and uncertainties. We will further reference certain non-IFRS financial measures, such as adjusted EBITDA and adjusted EBITDA margins.

Jerrit: Please refer to our 20th Annual Report on Form SEC on March 12th for a detailed discussion of such risks and uncertainties. We will further reference certain non-IFRS financial measures, such as adjusted EBITDA and adjusted EBITDA margins. These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS.

Speaker Change: Before we begin I would briefly remind everyone that today's call will contain forward looking statements within the meaning of the federal security laws.

Speaker Change: These forward looking statements reflect our current expectations and beliefs, only and are subject to certain risks and uncertainties that could cause actual results to differ materially.

Speaker Change: Please refer to our 20-F filed with the SEC on March 12th for a detailed discussion of such risks and uncertainties.

Speaker Change: We will further reference certain non <unk> financial measures such as adjusted EBITDA and adjusted EBITDA margin.

Speaker Change: These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IRS.

Please refer to today's release for reconciliation to the most comparable measures.

Jerrit: These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRX. Please refer to today's release for reconciliation to the most comparable IFRS measures. We will begin with David, followed by Martin, leading through today's prepared remarks, after which we look forward to opening the call for a Q&A session. With that, I'm very happy to turn over the call to David.

Jerrit: Please refer to today's release for reconciliation to the most comparable IFRS measures. We will begin with David, followed by Martin, leading through today's prepared remarks, after which we look forward to opening the call for a Q&A session. With that, I'm very happy to turn over the call to David.

Speaker Change: We will begin with David followed by Martin leading through today's prepared remarks, after which we look forward to opening the call for a Q&A session.

Speaker Change: With that I'm very happy to turn over the call to David.

David Allemann: A warm welcome to our second quarter 2024 results call. Martin, Marc, and I are coming to you from our improvised studio in the Swiss Alps and hope you had a restful and good summer. Wow, what an exciting summer and culture it has indeed been for all. Zendaya joined our team as partner and already played an air tennis tournament against Roger Federer in front of Onlap. Our groundbreaking innovation, Lifespray, has been eagerly discussed in 325 media articles around the world over the past week.

Martin: A warm welcome to our second quarter 2024 results call Martin market.

Martin: To you from our improvised studio in the Swiss Alps, and hope you have a restful and good summer.

David Allemann: Wow, what an exciting summer and quarter it has indeed been for all. Zendaya joined our team as partner and already played an air tennis tournament against Roger Federer in front of Onlap. Our groundbreaking innovation Lifespray has been eagerly discussed in 325 media articles around the world over the past week. And, more importantly, this new technology has already been validated by the amazing performance of all athletes in their competition. On the financial scoreboard, the second quarter saw our reported net sales grow by 28%, resulting in net sales of 567.7 million Swiss francs.

Martin: Wow, what an exciting summer and quarter. It has indeed been for all <unk>.

David Alibaba: Today I'm joined our team as partner and already played in Air Tennis tournament again structure feather in front of all labs, our ground breaking innovation like freight has been equally discussed in 325 media articles around the roles over the past weeks.

David Allemann: And more importantly, this new technology has already been validated by the amazing performance of all athletes in their competition. On the financial scoreboard, the second quarter saw our reported net sales grow by 28%, resulting in net sales of 567.7 million Swiss francs.

And more importantly, this new technology has already been validated by the amazing performance of all athletes in their competition.

Speaker Change: On the financial scoreboard for the second quarter. So while reported net sales grew by 28%, resulting in net sales of $567 7 million Swiss francs.

David Allemann: These very strong results keep us well on track to reach our goals set out for the year. Importantly, we continue to operate and take decisions for the long-term success and health of all. With that in mind, I would like to point out that we have once again increased our profitability levels, both from a gross profit and an adjusted EBCA margin perspective.

David Allemann: These very strong results keep us well on track to reach our goals set out for the year. Importantly, we continue to operate and make decisions for the long-term success and health of all. With that, I would like to point out that we have once again increased our profitability levels, both from a gross profit and an adjusted EBCA margin perspective. During the last weekend in Paris, it struck me that the Olympics do not measure the performance of athletes in a yearly cycle as other tournaments do, or even over quarterly cycles.

Speaker Change: Very strong results keep us well on track to reach our goals set out for the year.

Speaker Change: Importantly, we continue to operate and take decisions for the long term success and how it's our fault.

Speaker Change: With that I would like to point out that we have once again increased our profitability levels. Both from a gross profit and an adjusted EBITDA margin perspective.

David Allemann: Over the last weekend in Paris, it struck me that the Olympics do not measure the performance of athletes in a yearly cycle as other tournaments do, or even over quarterly cycles. The Greeks knew 2,800 years ago that big dreams require a longer period to train, evaluate, and prepare. This is why I want to speak to you today about how Ong's unique ambition to dream big over long cycles leads to extraordinary achievements, breakthrough innovations, and ultimately durable growth. As a founder-led company, our mantra, Dream On, is a rallying cry to pursue the most daring dreams with long-term determination and a diverse, incredible group of people who dream together. We dream together to win.

Speaker Change: Over the last week, and then Paris. It struck me that the Olympics stood up measured the performance of athletes in a yearly cycle as ultra tournament stool or even over quarterly cycles.

David Allemann: The Greeks knew 2,800 years ago that big dreams require a longer period to train, evaluate, and prepare. This is why I want to speak to you today about how Ong's unique ambition to dream big over long cycles leads to extraordinary achievements, breakthrough innovations, and ultimately durable growth. As a founder-led company, our mantra, Dream On, is a rallying cry to pursue the most daring dreams with long-term determination and a diverse, incredible group of people who dream together. We dream together to win.

Speaker Change: The Greeks knew 2800 years ago that big screens require a longer period to train evaluate and prepare.

This is why I want to speak to you today about how all its unique ambition to dream big over long cycles leads to extra ordinary achievements breakthrough innovations and ultimately durable growth.

Speaker Change: As a founder led company our manager Dream all is a rallying cry to pursue the most therein green with long term determination and the diverse incredible group of people who dream together.

Speaker Change: The dream together too weak.

David Allemann: The Games ended just two days ago, yet the extraordinary achievements of all athletes will fuel our passion and inspiration for a long time. It was a true privilege to see the determination, passion, and energy across the competition's first ten. To be reminded of the four years of preparation that many athletes go through for that one big moment. And, of course, the Olympics stand for more than simply the competition for medals.

David Allemann: The Games ended just two days ago, yet the extraordinary achievements of all athletes will fuel our passion and inspiration for a long time. It was a true privilege to see the determination, passion, and energy across the competition's first ten events, to be reminded of the four years of preparation that many athletes go through for that one big moment.

Speaker Change: The gains and just two days ago, yet the extra ordinary achievements of all athletes will fuel our passion and inspiration for a long time going forward.

Speaker Change: It was a true privilege to see the determination passionate and energy across the competition's firsthand.

Speaker Change: If you could remind us after 40 years of preparation that many athletes go through for that one big moment.

David Allemann: And, of course, the Olympics stand for more than simply the competition for medals. The Games' three values – excellence, respect, and friendship – express the unique ability the event has to bring people together in a way that only sport and movement can. These Olympic values inspired us to create a standout campaign with our new partners INDEA that you may have seen together with millions of people across social media or on the streets of Paris. Zendaya reminds us that winning is never the work of just one individual but a highly capable team with a long-term commitment to put the work in and see it come to fruition over time.

Speaker Change: And of course, the Olympics stand for more than simply the competition for metals.

David Allemann: The game's three values, excellence, respect, and friendship, express the unique ability the event has to bring people together in a way that only sport and movement can. These Olympic values inspired us to create a standout campaign with our new partners INDEA, which you may have seen together with millions of people across social media or through the streets of Paris. Zendaya reminds us that winning is never the work of just one individual but a highly capable team with a long-term commitment to put the work in and see it come to fruition over time.

Speaker Change: The gains III values excellence respect and friendship expressed a unique ability to bring people together in a way that only sport and movement can.

These Olympic values inspired us to create a standout competing with our new partners and Dale as.

Speaker Change: As you may have seen together with millions of people across social media or through the streets of Paris.

Speaker Change: Since they are in myself, that's bidding is never to work off just one individual but a highly capable team with a long term commitment to put to work in and see it come to fruition over time.

David Allemann: Winning together continues to scale with our powerful team and friends. We are so fortunate to have the opportunity to dream on with our incredible team of athletes. 66 athletes from 25 different countries made their way to Paris to take part in one of the biggest moments of their careers. We could not be more proud of each and every one of their achievements. On Saturday, Dominique Lobal, whose quest and dream to run in Paris came true, offered us all a memorable moment and came incredibly close to the podium, finishing fourth in the thrilling Men's 5000m.

Speaker Change: Bringing together continues to scale with our powerful team and brands. We are so fortunate to have the opportunity to dream all with our incredible team of athletes.

David Allemann: And on Sunday, Helen O'Biery raced her way to a bronze medal at one of the final competitions in Paris, the Women's Marathon. Igor Sviatek made history by securing the first ever tennis medal for an unsupported athlete, earning a bronze that also marked the first ever tennis medal for Poland. Our triathlete, Lisa Terch, also made her way into the history books in the mixed relay, being the first unsupported athlete to ever win gold in the Olympic Games. And who could ever forget Yared Nogu's final sprint?

David Allemann: This incredible performance earned him a bronze medal just a hundredth of a second behind Ketting Silva. So, truly, historical moments that we'll never forget. In fact, 20 athletes from 12 different countries competed in the Games from our very own On Athletics club alone. The On Athletics Club follows a unique model that highlights how sports unite rather than divide us. This team of talented and committed individuals trains together year-round to prepare for competitions around the world.

Speaker Change: 66, all athletes from 25 different countries made survey to Paris to take part in one of the biggest moments of their careers.

We could not be more palatable, each and every one of their achievements on Saturday, Dominic Lowball, whose quest dream to run in Paris came true offered us all a memorable moments and came incredibly close to the podium finishes force in the thrilling mens five.

Speaker Change: Mitra.

Speaker Change: And on Sunday Helena theory raised her way to a brawl metal at one of the final competitions in Paris to payments marathon.

Speaker Change: You guys should be uptake made history by securing the first ever tennis metal for an all supported athlete, earning abroad that also marks the first ever tennis metals for Poland.

David Allemann: Our triathlete, Lisa Terch, also made her way into the history books in the mixed relay, being the first unsupported athlete to ever win gold in the Olympic Games. And who could ever forget Yared Nogu's final sprint? This incredible performance earned him a bronze medal just a hundredth of a second behind Ketting Silva. So, truly, historical moments that we'll never forget. In fact, 20 athletes from 12 different countries competed in the Games from our very own On Athletics club alone.

Speaker Change: Our tightly at least attach also made her way into the history books in the mix really being the first all supported athletes to ever been gold in the Olympic games.

Speaker Change: And who could ever forget TRA new boards final sprint. This incredible performance earned him abroad, just at the holders of the second behind getting sale.

Speaker Change: So truly historical moments that will never forget.

Speaker Change: In fact 20 athletes from 12 different countries competed indicators from our very own on plastics clock Hello.

David Allemann: It's a model where teamwork and the will to win coexist and thrive. So even an individual sport like running benefits from athletes motivating, supporting, and inspiring each other to perform at the very highest level. Our commitment to our athlete team extends beyond traditional elements such as supporting them in their physical and mental preparation. Overseen by former professional athletes, our program offers assistance in health and recovery, financial planning, personal branding, and media, as well as career development beyond their athletic years. Former triathlon world champion Nikola Spirig, who won the first Olympic medal for Norway in Rio in 2016, has now joined Norway as a team member.

David Allemann: The On Athletics Club follows a unique model that highlights how sports unite rather than divide. This team of talented and committed individuals trains together year-round to prepare for competitions around the world. It's a model where teamwork and the will to win coexist and thrive. So even an individual sport like running benefits from athletes motivating, supporting, and inspiring each other to perform at the very highest level.

Speaker Change: The old Atlantic Club Pillows, a unique mobile that highlights how sports unite rather than divide us.

Speaker Change: This team of talented and committed individuals trained together year round to prepare for competitions around the world.

Speaker Change: It's a muscle that teamwork and developed tubing coexist and strife.

Speaker Change: So even an individual sport like Ronnie benefits from athletes motivating supporting an inspiring each order to perform at the very highest level.

David Allemann: Our commitment to our athlete team extends beyond traditional elements such as supporting them in their physical and mental preparation. Overseen by former professional athletes, our program offers assistance in health and recovery, financial planning, personal branding, and media, as well as career development beyond their athletic years. Former triathlon world champion Nikola Spirig, who won the first Olympic medal for ON in Rio in 2016, has now joined ON as a team member.

Speaker Change: Our commitment to our athlete team extends beyond traditional elements, such as supporting them in their physical and mental preparation.

Speaker Change: Overseen by a former professional athletes our program offers assistance in housing recovery financial planning personal branding and media as well as career development beyond stair Atlantic years.

Speaker Change: Former triathlon World Champion Ecolab Spirit, who won the first Olympic medal for all in Rio in 2016 has now joined on as a team member.

David Allemann: She supports the unique model of our athletic club, which is already becoming generational. Performance is at the core of it all. At all, big dreams lead to breakthrough innovation. Dream On, the spirit that drives our athletes, is the same mantra that fuels our team's bold, innovative vision and mindset. Our new light spray technology is proof of that. It came to life after one of our team members saw the potential to use a hot glue gun to spray a shoe. Like Spider-Man would do with web fluid.

David Allemann: She supports the unique model of our athletic club, which is already becoming generational. Performance is at the core of it all. At all, big dreams lead to breakthrough innovation. Dream On, the spirit that drives our athletes, is the same mantra that fuels our team's fold with a weighty condition in mind. Our new light spray technology is proof of that. It came to life after one of our team members saw the potential to use a hot glue gun to spray a shoe. Like Spider-Man would do with web fluid.

Speaker Change: She supports unique model of our athletic club, which is already becoming generational.

Performance is at the core of all.

Speaker Change: At all Big Dreams leads to breakthrough innovation.

Speaker Change: Dream all the spirit that drives our athletes is the same mantra that fuels our teams bold innovative.

Speaker Change: And mindset.

Speaker Change: Our new light spray technology is proof of that.

Speaker Change: It came to life after one of our key members so the potential to use our hot glue goal to spray ashore.

Speaker Change: Five women with debates that fluids.

David Allemann: 40 years ago, we packed this crazy dream as one of our innovation moonshots with resources at Onlap. From there on, our team came together to test, challenge, and build on every setback to reach new ideas for what would eventually result in the new CloudBoom Strike Lightspray. It features an ultralight upper that is sprayed, not built, in a one-step process automated by a robotic arm in just three minutes. We'll admit, when Marathon star Helena O'Biery saw it for the first time, she was fairly skeptical.

David Allemann: 40 years ago, we packed this crazy dream as one of our innovation moonshots with resources at Onlap. From there on, our team came together to test, challenge, and build on every setback to reach new ideas for what would eventually result in the new CloudBoom Strike Lightspray. It features an ultralight upper that is sprayed, not built, in a one-step process automated by a robotic arm in just three minutes. We'll admit, when Marathon star Helene Aubiri saw it for the first time, she was fairly skeptical.

Speaker Change: 40 years ago, We pass these crazy Dream as one of our innovation Moon shots with resources at OLED.

Speaker Change: From their own our team came together to test challenge and build on every setback to reach new ideas for what would eventually insult in the new cloud boom strike light spray.

Speaker Change: It features an ultralight upper that is sprayed not built in a one step process automated by a robotic arm in just three minutes.

Speaker Change: I will admit when marathon Star Hell No Barry So it's for the first time she was fairly skeptical.

David Allemann: It truly doesn't look like a performance running shoe you've ever seen before. But after putting them to the test in her training session, she decided they were too good to leave behind for competition. She then stunned us all by winning the marathon in Boston earlier this year wearing this groundbreaking shoe. Looking forward to it. This is just the start of a dream that we believe will challenge the norms of outstanding performance, manufacturing efficiency, sustainability, and potentially near-shoring all at once.

David Allemann: It truly doesn't look like a performance running show you have ever seen before. But after putting them to the test in her training session, she decided they were too good to leave behind for competition. She then stunned us all by winning the marathon in Boston earlier this year wearing this groundbreaking shoe. Looking forward to it. This is just the start of a dream that we believe will challenge the norms of outstanding performance, manufacturing efficiency, sustainability, and potentially near-shoring all at once.

It truly doesn't look like and then performance running shoe you have ever seen before.

Barry: But after putting them to the test in her training sessions.

Speaker Change: She decided stable to goods to leave behind for competition.

Shalane Flanagan: She then sandoz all by winning the marathon in Boston earlier this year varying this ground breaking shoe.

Shalane Flanagan: Looking forward.

Shalane Flanagan: This is just the start of the dream that we believe will challenge to norms of outstanding performance manufacturing efficiency sustainability and potentially near shoring all at once.

David Allemann: In fact, this marks a turning point in manufacturing with the potential to be brought to many more products in the future. A few lucky folks might have caught a first-hand glimpse of the innovation live at our own labs pop-up in Paris over the past few weeks. I believe it's safe to say that our guests' reactions to the Light Spray Robot were incredibly positive.

David Allemann: In fact, this marks a turning point in manufacturing with the potential to be brought to many more on-products in the future. A few lucky folks might have caught a first-hand glimpse of the innovation live at our own labs pop-up in Paris over the past few weeks. I believe it's safe to say that our guest reactions to the light ray robots were incredibly positive.

Shalane Flanagan: In fact, this marks a turning point in manufacturing with the potential to be brought to many more oil products in the future.

Shalane Flanagan: A few lucky folks might have hoped a firsthand glimpse of the innovation life at our own labs pop up in Paris over past few weeks.

Shalane Flanagan: I believe it's safe to say that our guests' reactions to delight spray robots were incredibly positive is less the clear message unveil always there to take bold bets on our mission towards achieving long term innovation led success.

David Allemann: It left a clear message that UNWILL is always there to take bold bets on our mission towards achieving long-term innovation-led success. In essence, innovation and new technology enable us to create the best sports gear available. This allows us to broaden our product offering and reach an even larger community, or in other words, our mission to ignite the human spirit's movement. We inspire others to dream on. While SlideSpray is a look into the future, our innovation pipeline continues to deliver new and exciting products in the short term. An example is the Cloud Bloom Strike, our latest high-performance product for race day. Available in a limited first colorway since early July, it will be more broadly launched in early September.

David Allemann: It left a clear mess, but UNWIL is always there to take bold bets on our mission towards achieving long-term innovation-led success. In essence, innovation and new technology enable us to create the best sports gear available. This allows us to broaden our product offering and reach an even larger community. Or, in other words, Rhymer Mission, Ticknight, the Human Spirit's Remotement.

Speaker Change: In essence innovation and new technology enable us to create the best sports gear available.

Speaker Change: This allows us to broaden our product offering and reach an even larger community.

Speaker Change: Or in other words through our mission to ignite the human spirit through movements.

David Allemann: We inspire others to dream on. Whilst Light Spray is a look into the future, our innovation pipeline continues to deliver new and exciting products in the short term. An example is the Cloud Room Stripe, our latest type performance product for eight days. Available in a limited first colorway since early July, it will be more broadly launched in early September. The shoe revolutionizes the fast-running experience with an innovative, ultra-responsive drop-in midsole construction tailored to marathon racing.

Speaker Change: Inspire others to dream all.

Speaker Change: While slide spray is a look into the future our innovation pipeline continues to deliver new and exciting products in the short term. An example is the cloud to strike our latest high performance product for a state.

Speaker Change: Valuable in a limited scores color ways since early July it will be more broadly launched in early September.

David Allemann: The shoe revolutionizes the fast-running experience with an innovative, ultra-responsive drop-in midsole construction tailored to marathon racing. For the everyday runner, the newly launched Cloud Surfer Next offers a dynamic running sensation with our patented Cloud Tech Face technology and an aesthetic inspired by the Cloud Boom Echo Series. We dream of this global talent. As I mentioned earlier, success is a team sport. Through authentic connections, we build long-lasting relationships with athletes in the On Athletics Club, as well as partners like Zendaya, FKA Twigs, Igor Sviatsek, and Roger Federer.

Speaker Change: The shoe revolutionizing the fast running experience with an innovative ultra responsive drop in mid sole construction tailored to marathon races.

David Allemann: For the everyday runner, the newly launched cloud surfer next offers a dynamic running sensation with our patented cloud tech phase technology and an aesthetic inspired by the cloud boom ecosystem. We dream of this global talent. As I mentioned earlier, success is a team sport. Through authentic connections, we build long-lasting relationships with athletes in the On Athletics Club, as well as partners like Zendaya, FKA Twigs, Igor Sviatsek, and Roger Federer.

Speaker Change: For the everyday rolla to newly launched cloud server next offers the dynamic running sensation with our patented cloud Tech based technology and an aesthetic inspired by the cloud boom Echo series.

Speaker Change: Midstream on this global talents.

Speaker Change: As I mentioned earlier successes a team sport.

Speaker Change: Through authentic connections to be build long lasting relationships with athletes into on Atlantic club as well as partners like 10 D. S. K tricks igarashi uptick and Roger Federer.

David Allemann: These partnerships allow us to create incredible momentum for the brand, as seen most recently in Paris, where our presence was felt. From our pop-up on-labs located in the heart of the French capital to our newest and largest flagship store on the legendary Champs-Élysées, Paris has given us the opportunity to leave a mark on the world's largest sports stage. Sport remains one of the last and ultimate life moments to build cultural relevance for brands in performance and lifestyle.

David Allemann: His partnerships allow us to create incredible momentum for the brand, as seen most frequently in Paris, where our presence was felt. From our pop-up on-lap located in the heart of the French capital to our newest and largest flagship store on the legendary Champs-Élysées, Paris has given us the opportunity to leave a mark on the world's largest sports stage. Sport remains one of the last and ultimate life moments to build cultural relevance for brands in performance and lifestyle. In the last weeks, our storytelling reached a global community of millions, and together with our global talents, we are just getting started. If you remember three things from my introduction, I want you to remember this.

Speaker Change: These partnerships allow us to create and critical mentum for the brand as seen most recently in Paris, where our presence was felt.

Speaker Change: From our pop up on labs, located in the heart of the French capital to our newest and largest flagship store on the lectionary charter Lisa Harris has given us the opportunity to leave a mark on the world's largest sports stage.

Speaker Change: Sports remains one of the last and ultimate life moments to build cultural relevance for brands in performance and lifestyle.

David Allemann: In the last weeks, On Storytelling reached a global community of millions. And together with our global talents, we are just getting started. If you remember three things from my introduction, I want you to remember these. First, ON is dreaming and building for the long term with an outstanding team of athletes, talents, and global brand partners. We dream and win together, as performance is at the core of all. Second, the risk-taking approach of a founder-led company leads to radical innovation that will fuel Owens' product ramp and durable growth for years to come.

Speaker Change: And the last weeks on storytelling reached a global community of millions and together with our global talents. We are just getting started.

Speaker Change: If you remember three things for my introduction.

Speaker Change: I want you to remember this.

David Allemann: First, ON is dreaming and building for the long term with an outstanding team of athletes, talents, and global brand partners. We dream and win together as performance is at the core of all. Second, the risk-taking approach of a founder-led company leads to radical innovation that will fuel Owens' product ramp and durable growth for years to come. And third, our bold long-term dreams are creating enduring brand and business value. The 2024 Games have ended, and on it left its mark.

Speaker Change: First one is streaming and building for the long term with announced standing team of athletes talents and global brand partners.

Speaker Change: Dream and being together if performance is at the core of all.

Second the risk taking approach of a founder led company leads to radical innovation that will fuel owns product ramp and durable growth for years to come.

David Allemann: And third, our bold long-term dreams are creating enduring brand and business value. The 2024 games have ended, and on left its mark. The road towards 2028 in L.A. starts for us at dawn today. It's my great pleasure to hand over to Martin for a more detailed review of the quarter. Martin, please.

Speaker Change: And served our bold long term dreams are creating enduring brand and business value.

Mark <unk>: 2024 games has ended and on last it's Mark <unk>.

David Allemann: The road towards 2028 in L.A. starts for us head on today. It's my great pleasure to hand over to Martin for a more detailed review of the quote. Marking, please. Thank you, David. And bonjour from my side as well.

<unk> towards 2020 as generally starts for us at all today.

Mark <unk>: It's my great pleasure to hand over to Martin for a more detailed review of the quarter marketplace.

Martin Hoffmann: Thank you, David. And bonjour from my side as well.

Martin: Thank you, David and brochure from my side as well.

Martin Hoffmann: Please first allow me to begin with how a revolutionary technology like Likespray links to our most important issues, our culture. The level of dedication and energy that our team put into this project became visible to the world over these past weeks. Witnessing the team presenting their innovation to global media, star athletes, and leaders in business and politics from around the world was a big highlight for us. Their pride and passion nearly matched what we saw from athletes winning medals, and we are thrilled and proud to work with such an exceptional team. Not too long ago, we talked about our big dreams for the future.

Martin Hoffmann: Please first allow me to begin with how a revolutionary technology like spray links to our most important S. Our culture. The level of dedication and energy that our team put into this project became visible to the world over these past few weeks. Witnessing the team presenting their innovation to global media, star athletes, and leaders in business and politics from around the world was a big highlight for us. Their pride and passion nearly matched what we saw from athletes winning medals.

Martin: Please first allow me to begin with how our revolutionary technology like spray links to our most important asset our culture.

Speaker Change: The level of dedication at NFC that our team put into this project became visible to developed over these past weeks.

Speaker Change: Witnessing the team presenting their innovation to global media Star athletes and leaders in business and politics from around the World was a big highlight for us.

Speaker Change: That Friday Pershing nearly matched what we saw from athletes spending metals and we are thrilled and proud to work with such an exceptional team.

Martin Hoffmann: And we are thrilled and proud to work with such an exceptional team. Not too long ago, we talked about our big dreams for the company. Looking back at the past weeks, it's clear that we have laid the groundwork for what we believe will shape our future for many years. Zendaya, Lightspray, our athletes, our largest flagship store to date, and leading community events like OnTrack. These big moments were not created to boost short-term sales or to build the foundation for the law.

Speaker Change: Not too long ago, we talked about a big trends for the summer.

Martin Hoffmann: Looking back at the past weeks, it's clear that we have laid the groundwork for what we believe will shape us for many years. Zendaya, Lightspray, our athletes, our largest flagship store to date, and leading community events like OnTrack. These big moments were not created to boost short-term sales but to build the foundation for the long-term, durable, and profitable growth that we outlined at our investor day one year ago. To elevate our brand awareness with a wider fan base and to push our credibility as an innovation-led, global, premium, performance sports brand. A huge moment in themselves. We further boosted them with significant marketing investments across all our channels, and it's really working.

Speaker Change: Looking back at the past weeks, it's clear that we have laid the groundwork for what we believe will shape on for many years to come.

Speaker Change: Data light spray our estimates our largest flagship store to date leading.

Speaker Change: Leading community event like on track nights.

Speaker Change: This peak moments, where not created to boost short term sales, but to build the foundation for the long term durable and profitable growth that we outlined at our Investor day, one year ago.

Martin Hoffmann: [inaudible] Durable and profitable growth that we outlined at our invested day one year ago. To elevate our friend awareness with a wider user base and to push our credibility as an innovation let global premium performance go up. By a huge moment in themselves, we further boosted them with significant marketing investments across all our channels. And it's clearly working.

Speaker Change: To elevate our brand awareness with the wider fan base and to push our credibility as an innovation led global premium performance spots footprint.

Speaker Change: Juge moments in themselves, we further boosted them with significant marketing investment across all our channels.

Martin Hoffmann: The brand is maintaining its incredible momentum, based on direct customer feedback, continued sales through strengths, our brand awareness tracker, a strong increase in Google searches, and millions of media imports. Our multi-channel strategy allows us to capture the brand momentum globally and to convert it into continued strong, self-grossed crossroads. [inaudible] I'm sorry, I'm sorry, I'm sorry. As a result, we are very pleased to have reached net sales of 567.7 million Swiss francs in Q2, up by 27.8% year over year on a reported basis and 29.4% on the constant current

Martin Hoffmann: The brand is maintaining its incredible momentum, based on direct customer feedback, continued sales through strengths, our brand awareness tracker, a strong increase in Google searches, and millions of media impressions. Our multi-channel strategy allows us to capture the brand momentum globally and to convert it into continued strong sales growth across all channels. As a result, we are very pleased to have reached a net worth of 567.7 million Swiss francs in Q2, up by 27.8% year-over-year on a reported basis and 29.4% on the constant current.

Speaker Change: And it's clearly working the brand is maintaining its incredible momentum based on direct customer feedback continued sell through strength our brand awareness trecker a strong increase in Google searches.

Speaker Change: Of media impressions.

Speaker Change: Our multichannel strategy allows us to capture the brand momentum globally and to converted into continued strong sales growth across all channels.

Speaker Change: As a result, we are very pleased to have reached net totaled five.

Speaker Change: $567 7 million Swiss francs in Q2.

Speaker Change: Up by 27, 8% year over year on a reported basis and 29, 4% on a constant currency basis.

Martin Hoffmann: With that, we have for the first time surpassed 1 billion Swiss francs in that cell in a six month period, and 2 billion Swiss francs when looking at the last 12.. Both marking incredible milestones and achievements that we are extremely proud of. As mentioned, the strong brand momentum translates into strong demand across all our channels and partners. The ability to convert this momentum to sales, especially in the Americas region, would have been even higher. But the ongoing transition of our Atlanta warehouse led to some product availability constraints, including key franchises like the cloud, and to delayed or missing delivery, both to our D2C and wholesale customers.

Martin Hoffmann: With that, we have for the first time surpassed 1 billion Swiss francs in net sales in a six-month period and 2 billion Swiss francs when looking at the last 12 months, both marking incredible milestones and achievements that we are extremely proud of. As mentioned, the strong brand momentum translates into strong demand across all our channels and partners. The ability to convert this momentum to sales, especially in the Americas region, would have been even higher.

Speaker Change: With that we have for the first time surpassed 1 billion Swiss francs and that sells in the six months period, and 2 billion Swiss francs when looking at the last 12 months period.

Speaker Change: Both marketing incredible milestones and achievements that we are extremely proud of.

Speaker Change: As mentioned the strong brand momentum converts into strong demand for <unk> across all our channels and partners.

Speaker Change: The ability to convert this momentum sales, especially in the Americas region would have been even higher but the ongoing transition of our Atlanta warehouse, let's just some product availability constraints, including key franchises like the cloud and to delayed are missing deliveries.

Martin Hoffmann: But the ongoing transition of our Atlanta warehouse led to some product availability constraints, including key franchises like the cloud, and to delayed or missing delivery for both stewards of our D2C and wholesale customers. As anticipated, we saw a strong growth reacceleration in our wholesale channel in Q2 in comparison to the last two quarters. Wholesale net sales grew by 27.6% in the quarter on a reported basis and 28.8% on a constant current basis, reaching 358.2 million.

Speaker Change: Towards our DTC and wholesale customers.

Martin Hoffmann: As anticipated, we saw a strong growth re-acceleration in our wholesale channel in Q2, compared to the last two, Pulse and MedSats grew by 27.6% in the quarter on a reported basis and 28.8% on a constant basis, reaching 358.2 million. We continue to execute on the communicative strategy to focus on our existing distribution, driving our ongoing growth paths with deeper penetration at strategic accounts, same stock growth At the same time, we are adding a lower number of incremental wholesale doors than we have in the past.

Speaker Change: As anticipated we saw a strong growth re acceleration in our wholesale channel in Q2 in comparison to the last two quarters.

Speaker Change: Wholesale net sales grew by 27, 6% in the quarter on a reported basis and 28, 8% on a constant currency basis, reaching $358 2 million Swiss francs.

Speaker Change: We continue to execute under communicated strategy to focus on our existing distribution partners.

Speaker Change: Driving our ongoing cross paths with deeper penetration at strategic column same store growth and ongoing market share gains.

Speaker Change: At the same time, we are adding a lower number of incremental wholesale doors than we have over the past years.

Martin Hoffmann: We are pleased to see that growing brand awareness drives strong, full-priced demand to our existing wholesale partners across key accounts and specialty retailers, both in interphysical as well as in digital channels. Our DTC channel continued to outperform wholesale and reached 209.4 million Swiss francs in, growing by 28.1% year over year on a reported basis and 30.4% on a constant current basis. As a result, the Q2 D2C share increased versus the prior year period, reaching 36.9%. In our e-commerce business, we had seen some softer demand in the first days of the quarter.

Martin Hoffmann: We are pleased to see that the growing brand awareness drives strong, full-price demand to our existing holds and partners across key accounts and specialty, both interphysical as well as digital channels. Our DTC channel continued to outperform wholesale and reached 209.4 million Swiss francs, growing by 28.1% year-over-year on a reported basis and 30.4% on a constant. As a result, Q2D2C share increased versus the prior period, reaching 36.9. In our incompatibility, we had seen some software demand in the first days of..., followed by a re-acceleration of growth in the second half, and Patrick's record high traffic on our web. This includes a very strong start for some of our recent digital channels. We can all belong to our first commercial app. It's now coming.

Speaker Change: We are pleased to see that the growing brand awareness drive strong full price two months to our existing wholesale partners across key accounts and specialty retailers.

Speaker Change: Both in our physical as well as digital channels.

Speaker Change: Our DTC channel continued to outperform wholesale and reached $209 4 million Swiss francs in Q2.

Speaker Change: Growing by 28, 1% year over year on a reported basis and 34% on a constant currency basis.

Speaker Change: As a result.

Speaker Change: Q2 D to C share increased versus the prior year period, reaching 36, 9%.

Speaker Change: And our E comm business, we had seen some softer demand in the first days of the quarter.

Martin Hoffmann: Following by a re-acceleration of growth in the second half, Patrick's record high traffic on our web site. This includes a very strong start for some of our recent digital channel expansion. The global launch of our first commercial app is now complete, and both downloads and transactions are well ahead of our expectations. In addition, we are encouraged to see a very high apparel share on the app, comparable to what is reached in our retail environment.

Speaker Change: Followed by a reacceleration of growth in the second half paired with record high traffic on our web site.

Speaker Change: This includes a very strong start for some of our recent digital channel expansion.

Thank you for standing by.

Christa: My name is Christa, and I will be your conference operator today. I would like to welcome everyone to the on-holding AG Second Quarter 2024 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question in answer session. If you would like to ask a question during that time, simply press star, followed by number one on your telephone keypad. And if you would like to withdraw that question, again, press star one. Thank you.

Speaker Change: The global launch of our first commercial is now complete.

Martin Hoffmann: Both downloads and transactions are well ahead of our expectations. In addition, we are encouraged to see a very high volume apparel channel, comparable to what is reached in our retail environment. The increasing brand awareness is also visible in a wave of new visitors to the expanding network of retail stores, in our new Paris location and beyond. In New York City, Lafayette Store remains Byprint Hot, attracting some of the highest traffic levels among all our retail locations.

<unk> downloads and transactions well ahead of our expectations.

Speaker Change: In addition, we are encouraged to see a very high powered shell in the apps.

Speaker Change: Comparable to what is reached in our retail environments.

Martin Hoffmann: The increasing brand awareness is also visible in a wave of new visitors to the expanding network of retail stores, in our new Paris location and beyond. Our New York City Lafayette store remains a vibrant hotspot, attracting some of the highest traffic levels among all our retail locations this quarter. We're excited to open our second store in Manhattan in a few months, where visitors will have even more space to immerse themselves in the full-on experience.

Speaker Change: The increasing brand awareness is also visible in a wave of new visitors to the expanding network of retail stores.

Speaker Change: Our new Paris location and beyond.

Jerrit Peter: I will now turn the conference over to Jerrit, who is head of investor relations. Jerrit, you may begin. Good afternoon. Good morning to our investor community. Thank you for joining on 2024 Second Quarter earnings conference call and webcast. With me today on the call are on Executive Code Chairman and co-founder David Allemann, CFO and CoCO, Martin Hoffmann, and CoCO, Marc Maurer.

Our New York City Lafayette store remains a vibrant hotspot attracting staff the highest traffic levels among all our retailer locations this quarter.

Martin Hoffmann: We're excited to open our second store in Manhattan in a few months, where visitors will have even more space to immerse themselves in the full-on experience. Just a couple of weeks ago, we also opened our first ever store in Hong Kong, which we celebrated with some of our closest partners and tastemakers in the region. Despite the early days, the store has clearly exceeded our internal expectations, effectively doubling the initial project. Check, showcasing the remarkable brand Pete that's noticeable in the, that has already invested a lot.

Speaker Change: We're excited to open our second store in Manhattan in a few months.

Speaker Change: Visitors will have even more space to immerse themselves in default upon experience.

Martin Hoffmann: Just a couple of weeks ago, we also opened our first ever store in Hong Kong, which we celebrated with some of our closest partners and tastemakers in the region. Despite the early days, the store has clearly exceeded our internal expectations. Effectively doubling the initial projection and showcasing the remarkable brand Pete that's noticeable in the region, at Our Invested Day, in Los Angeles, we outlined our focus on own retail as a key pillar for global.

Speaker Change: Just a couple of weeks ago. We also opened our first ever store in Hong Kong.

Jerrit Peter: Before we begin, I will briefly remind everyone that today's call will contain forward-looking statements within the meaning of the federal security laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties. It could cause actual results to differ materially. Please refer to our 20F files with SEC on March 12 for a detailed discussion of such risks and uncertainties.

Speaker Change: We celebrated for some of our closest partner can taste makers in the region.

Speaker Change: Despite the early days the store has clearly exceeded our internal expectations.

Speaker Change: Effectively doubling the initial protections and showcasing the remarkable brand Pete that's noticeable in the region.

Speaker Change: At our Investor Day last October we outlined our focus on owned retail is a key pillar for global growth.

Martin Hoffmann: We outlined our focus on our own retail as a key pillar for clothes. During the last year, we expanded our network to 12 stores outside of China and 25 stores in China. And we gained a lot of additional confidence in the power of the channel to drive growth, high engagement levels with new and existing customers, increasing and strong apparel shares, and, very importantly, additional profitability. Now, let me switch to the region.

Jerrit Peter: We will further reference certain non-IFRS financial measures such as adjusted EBTA and adjusted EBTA margin. These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Please refer to today's release for reconciliation to the most comparable IFRS measures.

Martin Hoffmann: During the last year, we expanded our network to 12 stores outside of China and 25 stores in China. And we gained a lot of additional confidence in the power of the channel to drive growth, high engagement levels with new and existing customers, increasing and strong apparel shares, and, very importantly, additional profitability. Now, let me switch to the regional platform.

Speaker Change: During the last year, we expanded our network to 12 stores outside of China, and 25 stores in China.

Speaker Change: <unk> gained a lot of additional confidence in the power of the channel to drive growth higher engagement levels, with new and existing customers, increasing and strong apparel sure and very importantly additional profitability.

Jerrit Peter: We will begin with David, followed by Martin, leading through today's prepared remarks, after which we look forward to opening the call for a Q&A session.

David Allemann: With that, I'm very happy to turn over your call to David.

Speaker Change: Now, let me switch to the regional performance.

Martin Hoffmann: The EMEA reached net sales of 138.4 million Swiss francs in the quarter, growing by 21.8% year over year or 22.2% on the constant current. We are very happy with the performance in the region, both from an absolute net sales achievement perspective as well as from a product composition point of view. We continue to see exceptional momentum in the United Kingdom across all channels. But from a smaller base, sales in France, but also the Netherlands, and Belgium, clearly accelerated.

Martin Hoffmann: EMEA reached net sales of $138.4 million, growing by 21.8% year over year or 22.2% on a constant currency basis. We're very happy with the performance in the region, both from an absolute net sales achievement perspective, as well as from a product composition perspective. We continue to see exceptional momentum in the United Kingdom across all channels. But from a smaller base, sales in France, but also the Netherlands and Belgium, clearly accelerated. But most important is the acceleration and increased share of sales from our performance running range within some of our legacy markets in Central Europe, which we see as a result of our strategic prioritization over the past. Moving on to the Americas. The region contributed 370 million Swiss francs.

Speaker Change: EMEA reached net sales of $138 $4 million with strengths in the quarter.

David Allemann: A warm welcome to our second quarter 2020 for results call. Martin, Marc and I are coming to you from our improvised studio in the Swiss Alps and hope you had a restful and good summer. Wow, what an exciting summer and quarter it has indeed been for all. Today, I joined our team as partner and already played an air tennis tournament against Roger Federer in front of all labs. Our ground-breaking innovation life spray has been equally discussed in 325 media articles around the world over the past weeks.

Speaker Change: Growing by 21, 8% year over year or 22, 2% on a constant currency basis.

Speaker Change: We're very happy with the performance in the reach both from an absolute net sales achievement as well as the product composition perspective.

Speaker Change: We continue to see exceptional momentum in the United Kingdom across all channels.

Speaker Change: But from a smaller base their craft brands, but also the Netherlands, and Belgium, clearly accelerated.

Speaker Change: But most important is to acceleration and increased share of sales from our performance funding range within some of our legacy markets in Central Europe, which we see as a result of our strategic prioritization over the past months.

David Allemann: And more importantly, this new technology has already been validated by the amazing performance of on athletes in their competitions. On the financial scoreboard, the second quarter saw our report net sales grow by 28% resulting in net sales of 567.7 million Swiss brands. These very strong results keep us well on track to reach our goals set out for the year. Importantly, we continue to operate and take decisions for the long-term success and health of all.

Speaker Change: Moving on to the Americas.

Speaker Change: The recent contributed $370 million with strength in Q2.

Martin Hoffmann: By far our largest quarter in terms of absolute net sales and representing a reported growth rate of 24.8% or 25.8% on a constant current basis. We have already mentioned the impact of the ongoing transition of our Atlanta warehouse, which was even more visible in our D2C than our whole search channel. We are fully focused on improving the situation.

Martin Hoffmann: By far our largest quarter in terms of absolute net sales and representing a reported growth rate of 24.8% or 25.8% on a constant basis. We have already mentioned the impact of the ongoing transition of our Atlanta operation, which was even more visible in our D2C than our whole self-channel. But we are fully focused on improving the situation.

Speaker Change: Our largest quarter in terms of absolute net sales and representing a reported growth rate of 24, 8% or 25, 8% on a constant currency basis.

Speaker Change: We already mentioned the impact of the ongoing transition of our Atlanta biopsy, which was even more visible in our D to C than our wholesale channel.

David Allemann: We said I would like to point out that we have once again increased our profitability levels both from a growth profit and an adjusted EBCA margin perspective. Dennis. Over the last weekend in Paris, it struck me that the Olympic student measured the performance of athletes in a yearly cycle as other tournaments do, or even over quarterly cycles. The Greeks knew 2,000 years ago that big dreams require a longer period to train, evaluate and prepare.

Speaker Change: But we are fully focused on improving the situation. We expect the continued impact into the second half of the year.

Martin Hoffmann: We expect a continued impact in the second half of the year, but this transition is essential to scale our distribution capabilities in the U.S. in the long term and to ultimately meet the incredible brand momentum and demand that we continue to expect in the region. In the APEC region, we continue to win market share past and across more countries than ever. The region grew by an incredible 73.7% in Q2 to reach 59.2 million.

Martin Hoffmann: We expect a continued impact in the second half of the year. But this transition is essential to scale our distribution capabilities in the US and the law, and to ultimately fulfill the incredible brand momentum and demand that we continue to expect in the region. In the APEC region, we continue to win market share past and across more countries. The region grew by an incredible 73.7% in Q2 to reach 59.2 million.

Speaker Change: But this transition is essential to scale, our distribution capabilities in the U S and the long term.

Speaker Change: And to ultimately fulfill the incredible brand momentum and demand that we continue to expect and to reach.

Speaker Change: And the epic region, we continued to win market share past and across more countries than expected.

Speaker Change: The recent grew by an incredible 73, 7% in Q2 to reach $59 2 million Swiss francs on a constant currency basis. The growth was even higher at 84, 7%.

David Allemann: This is why I want to speak to you today about how onto unique conditions to dream big over long cycles, leads to extraordinary achievements, breaks through innovations, and ultimately durable growth. As a finalized company, our mantra, Dream On, is a rallying cry to pursue the most daring dreams with long-term determination and a diverse, incredible group of people who dream together. Dream together to win. The games and the just 2 days ago, yes, the extraordinary achievements of all athletes will fuel our passion and inspiration for a long time going forward.

Martin Hoffmann: On a constant currency basis, the growth was even higher at $0.80. From the continued strong momentum in China, daily queues in front of our store in Japan, record sales in very nascent markets such as Indonesia or the Philippines, and of course, the already mentioned success of our new store in Hong Kong. Turning to the performance by project.

Martin Hoffmann: On a constant currency basis, the growth was even higher at 84.7%. From the continued strong momentum in China, daily queues in front of our store in Japan, record sales in very nascent markets such as Indonesia or the Philippines, and, of course, the already mentioned success of our new store in Hong Kong. Current demand is clearly exceeding supply.

Speaker Change: From the continued strong momentum in China Daily Q is in front of our store in Japan record sales and very nascent markets, such as Indonesia or the Philippines.

Speaker Change: And of course, the already mentioned success of our new store in Hong Kong.

Speaker Change: Current demand is clearly exceeding supply.

Speaker Change: Yeah.

Martin Hoffmann: Turning to the performance by project, Stuth grew by 26.7% year-on-year, reaching 542.5 million Swiss francs. Demand for our products remains strong across all product verticals. In line with our strategic priorities, performance running continues to drive a significant part. We maintain strong growth across all our running franchises, including the Cloud Monster, Cloud Server, and Cloud Run. And we keep fueling this growth with new products and innovation. The newly released Cloud Runner 2 has been a great success and elevates this important franchise and is a staple for the everyday runner.

Speaker Change: Turning to the performance by product.

Martin Hoffmann: Bruce Cooper, 26.7% Tian, Reaching 542.5 Millions [inaudible] Demand for our products remains strong across all product versions. In line with our strategic priorities, performance running continues to drive a significant part. We maintain strong growth across all our running franchises, including the CloudMonster, CloudServer, and CloudRunning. And we keep fueling this grocery's new product at the end of the day. The newly released Cloud Runner 2 has been a great success and elevates this important franchise and is a staple for the everyday runner.

Speaker Change: <unk> grew by 26, 7% year on year.

Speaker Change: Reaching $542 $5 million with strength in Q2.

Speaker Change: Demand for our products remains strong across all product verticals in.

Speaker Change: In line with our strategic priorities performance running continues to try to significant parts growth.

David Allemann: It was a true privilege to see the determination, passion and energy across the competition first-hand, to be reminded of the 4 years of preparation that many athletes go through for that one big moment. And of course, Olympic stands for more than simply the competition for medals. The game's three values, excellence, respect and friendship, express the unique ability the event has to bring people together in a way that only sport and movement can.

Speaker Change: Maintained strong growth across all our running franchise, including the cloud Monster cloud server and cloud products.

Speaker Change: And we keep fueling this growth with new products and innovation.

Speaker Change: The newly released cloud run it too has been a great success and elevate this important franchise.

Speaker Change: And did the staple for the everyday runner.

Martin Hoffmann: The CloudSurfer Next, which we just launched in early August, extends our successful CloudSurfer line towards a lower, but still premium price point, and significantly expands the reach and addressable market. In our performance all day vertical, the CloudTilt continues to fly off the shelf. The list index just called the CloudTilt 2.0 of our Loewe collaboration the quarter's hottest product. From a smaller base, but growing at a rapid speed, is our performance tennis category.

Speaker Change: The cloud turf and next which features launched in early August extend our successful cloud circle line towards a lower but still premium price point and significantly expands the reach and to addressable market.

David Allemann: These Olympic values inspired us to create a stand-out campaign without new partners and data. If you may have seen together with millions of people across social media or through the streets of Paris. And they are reminding us that winning is never the work of just one individual, but a highly capable team with a long-term commitment to put the work in and see it come to fruition over time. Winning together continues to scale with our powerful team and brand.

Speaker Change: And our performance all day vertical the cloud sales continues to fly off the shelves.

Martin Hoffmann: The List Index just called the CloudTill 2.0 of our Louisville collaboration the quarter's hottest product. From a smaller base, but growing at a rapid speed, is our performance tennis. We're excited to be well positioned to drive and capture the increasing cultural relevance of this. The Roger is amongst our fastest growing franchises. It inspires fans to own not only footwear, but also apparel.

Speaker Change: The list index, just called the cloud too to point all of our labor collaboration to quarters hottest product.

Speaker Change: From a smaller base, but growing at a rapid speed.

Speaker Change: <unk> tenants category.

Martin Hoffmann: We're excited to be well positioned to drive and capture the increasing cultural relevance of the sport. The Roger is amongst our fastest growing franchises. But tennis inspires fans to own not only footwear but also apparel.

Speaker Change: We're excited to be well positioned to try to capture the increasing cultural relevance of the sport.

Speaker Change: Russia is amongst our fastest growing franchises.

Speaker Change: But attendants inspire 10 to one not only on footwear, but also apparel pieces.

David Allemann: We are so fortunate to have the opportunity to dream on with our incredible team of athletes. 66 athletes from 25 different countries made their way to Paris to take part in one of the biggest moments of their careers. We could not be more proud of each and every one of their achievements. On Saturday, Dominic Lobaloo, whose quest and dream to run in Paris came true, offered us all a memorable moment and came incredibly close to the podium finishing force in the thrilling man's 5,000-meter.

Martin Hoffmann: The highly successful launch of our Tennessee Pearl collection earlier this year clearly exemplifies, and was further fuelled by the excitement surrounding the air tennis match between Zendaya and Russia. As previewed in our previous public update, the initiatives we have been taking on the apparel side are beginning to show in the next few weeks. Netseh, as in the parallel crew, by an outstanding 63% in Q2, reached 21.9 million.

Martin Hoffmann: The highly successful launch of our tennis apparel collection earlier this year clearly exemplifies this, and was further fueled by the excitement surrounding the air tennis match between Zendaya and Rodgers. As previewed in our previous public updates, the initiatives we have been taking on the apparel side are beginning to show in the numbers. Net sales in the peril group increased by an outstanding 63% in Q2 to reach 21.9 million. Based on the momentum we are seeing in wholesale and even more in our own channels, we are confident in the ability to drive significant growth and to increase our apparel share consistently over the coming quarter.

Speaker Change: Really successful launch of our tenants apparel collection earlier this year clearly exemplifies space.

David Allemann: And on Sunday, Helena Beary raised her way to a bronze medal at one of the final competitions in Paris to women's marathon. Igor Shvia Tech made history by securing the first ever tennis medal for an unsupported athlete, earning a bronze that also marks the first ever tennis medal for Poland. Our triathlete, Lisa Terpsch, also made her way into the history books in the mixed relay, being the first unsupported athlete to ever win gold in the Olympic Games.

Speaker Change: And was further fueled by the excitement surrounding the air tennis match between France and Russia.

Speaker Change: As previewed in our previous public updates the initiatives, we have been taking on the apparel side are beginning to show in the numbers too.

Speaker Change: Net sales in the apparel grew by an outstanding 63% in Q2 to reach $21 9 million Swiss franc.

Martin Hoffmann: Based on the momentum we are seeing in wholesale and even more in our own channels, we are confident in the ability to drive significant growth and to increase our apparel share consistently over the coming. New products, but also exciting collaborations like the one with Loewe or South Korean post-archive actions, drove significant awareness for the category and also allowed us to reach a higher level of engagement from our. For example, we provided members with early access to the post-archive collection. And The launch was a huge success.

Speaker Change: Based on the momentum we are seeing in wholesale and even more in our own channels. We are confident in the ability to drive significant growth and to increase our apparel share consistently over the coming quarters.

Martin Hoffmann: New products but also exciting collaborations like the one with Loewe or South Korean post-archive action drove significant awareness for the category and also allowed us to reach a higher level of engagement from our For example, we provided members with early access to the Post-Archive Faction collection, and the launch was a huge success. In China, the number of new members on launch day equaled what we typically acquire over a period of two weeks.

Speaker Change: New products, but also exciting collaborations like the one with labor or South Korean cost archive action drove significant awareness for the category.

Speaker Change: And also allow us to reach a higher level of engagement from our time.

Speaker Change: For example, we provide members with early access to the post archives section collection and.

Martin Hoffmann: In China, the number of new members on launch day equaled what we typically acquire over a period of... Last but not least, we are very proud of our newest accessories. It's another testimony to the power of our team to innovate and redefine. Innovations like the Swiss style crepe handles or our proprietary Fitlock design box. Meet the unique premium design, then that around functionality for people. [Inaudible] I have had the privilege of using the BEX in my travels over the past year already and keep on receiving positive reactions at almost every security check. Moving down the piano.

Speaker Change: The launch was a huge success in China. The number of new members on launch day equals what we typically acquire over a period of two weeks.

David Allemann: And who could ever forget the R.A.P. Nuboo's final sprint? This incredible performance earned him a bronze just at the hundreds of the second behind getting silver. So truly historical moments that we'll never forget. In fact, 20 athletes from 12 different countries competed in the Games from our very own on Athletics Club alone. The on Athletics Club follows a unique model that highlights how sports unite rather than divide us. This team of talented and committed individuals trained together year round to prepare for competitions around the world.

Martin Hoffmann: Last but not least, we are very proud of our newest accessory offer, our first black collection. It's another testimony to the power of our team to innovate and redefine products. Innovations like the Swiss-style crab handles or our proprietary FITLOCK design buckles meet a unique premium design centered around functionality for people. I have had the privilege of using the BEX in my travels over the past year already and keep on receiving positive reactions at almost every security check.

Speaker Change: Last but not least we are very proud of our newest accessories offering.

Speaker Change: Our trust spec collection.

Speaker Change: It's another testimony to the power of our team to innovate and redefine products.

Speaker Change: Innovations like the Swiss <unk> crept handles or our proprietary fit block design pockets meet the unique premium design centered around functionality for people on them.

Speaker Change: I had the privilege to use the <unk> for my travels over the past year already and keep on receiving positive reactions.

Speaker Change: Most every security checks.

Martin Hoffmann: Moving down the P&L, cross profit reached 340.2 million Swiss francs in the quarter, representing a strong and premium cross profit margin of 59.9% compared to the prior year period. It benefited from lower freight rates in Q2 this year, slightly offset by the higher freight share versus historically low levels last year. SG&A expenses excluding share price compensation were 275.8 million CHF in Q2, equivalent to 48.6% of net sales, flat versus the same period last year. At SLAMMED, we increase marketing expenses to support our big brand building initiatives. At the same time, distribution expenses as a percent of sales were lower compared to Q2 2023 as a result of lower warehousing costs as well as operational efficiency.

Speaker Change: Moving down the P&L.

Martin Hoffmann: [inaudible] Cross-Profit reached 340.2 million with strength, representing a strong and premium cross profit margin of 59% compared to the prior year period. We benefitted from lower freight rates in Q2 this year, slightly offset by higher freight share versus historically low levels last year. SG&A expenses, excluding share price compensation, were 275.8 million Swiss francs in Q2, equivalent to 48.6% of Flat versus the same pure glass.

Speaker Change: Gross profit reached $342 million with strength in the quarter, representing a strong and premium gross profit margin of 59, 9%.

David Allemann: It's a model where teamwork and developed to win, coexist and thrive. So even an individual sport like running benefits from athletes motivating, supporting and inspiring each other to perform at the very highest level. Our commitment to our athlete team extends beyond traditional elements such as supporting them in their physical and mental preparation. Overseen by formal professional athletes, our program offers assistance in health and recovery, financial planning, personal branding and media, as well as career development beyond their athletic years.

Speaker Change: Compared to the prior year periods, we benefited.

Speaker Change: Benefited from lower freight rates in Q2, this year slightly offset by the higher <unk> share was at historically low levels last year.

Speaker Change: SG&A expenses, excluding share based compensation were $275 8 million Swiss francs in Q2 equivalent to 48, 6% of net sales.

Speaker Change: Versus the same period last year.

Martin Hoffmann: As planned, we increased marketing expenses to support our big brand building initiative. At the same time, distribution expenses as a percent of sales were lower compared to Q2 2023 as a result of lower warehousing costs as well as operational efficiency. The resulting adjusted EBDA margin for Q2 is 16%, notably up from 14.1% in Q2 2020. The more stable US dollars with the Frank FX rate during the quarter supported a less volatile foreign exchange result, and what we have seen in recent, As a result, the strong bottom line for the quarter truly reflects our operational success and performance. Net income reached 30.8 million Swiss francs, up from 3.3 million Swiss francs in Q2.

Speaker Change: As planned we increased marketing expenses to support our big brand building initiatives etcetera.

At the same time distribution expenses as a percent of sales were lower compared to Q2 2023, as a result of lower warehousing costs as well as operational efficiency gains.

David Allemann: Former Triathlon World Champion Nikola Spearig won the first Olympic medal for on Rio in 2016 as now joined on as a team member. She supports the unique model of our athletic club, which is already becoming generational. Performance is at the core of all. At all, big dreams leads to breakthrough innovation. Dream on. The spirit that drives our athletes is the same mantra that fuels our team's bold innovative innovation mindset. Our new life spray technology is proof of that.

Martin Hoffmann: The resulting adjusted EBDA margin for Q2 is 16%, notably up from 14.1% in Q2 2020. The more stable US dollar's Swiss franc FX rate during the quarter supported a less volatile foreign exchange result than what we have seen in recent quarters. As a result, the strong bottom line for the quarter truly reflects our operational success and profitability. Net income reached 30.8 million Swiss francs, up from 3.3 million Swiss francs in Q2 2020.

Speaker Change: The resulting adjusted EBITDA margin for Q2, 2016%, notably up from 14, 1% in Q2 2023.

Speaker Change: The more stable U S dollar Swiss franc FX rate during the quarter supported a less volatile foreign exchange results and what we have seen in recent quarters.

Speaker Change: As a result of the strong bottom line for the quarter truly reflect our operational success and profitability.

Speaker Change: Net income reached $30 8 million Swiss francs up from $3 $3 million with strengths in Q2 'twenty three.

David Allemann: It came to life of the one of our team members, so the potential to use a hot glue gun to spray a shoe. Like Spider-Man would do with that fluid. 40 years ago, we packed this crazy dream as one of our innovation moonshots with resources and online. From there on, our team came together to test, challenge and build on every setback to reach new ideas for what would eventually result in the new cloud boom strike light spray.

Martin Hoffmann: Moving to our balance sheet, Capital Expenditures were $16.9 million, equivalent to 3% of net sales, up slightly from 2.5%, while achieving significantly more net. Network in Capital at the end of Q2 was at 567.1, almost flat compared to the 560.2 million at the end of March and even lower than the 598.6 million for the year.

Martin Hoffmann: Moving to our balance sheet, Capital Expenditures were $16.9 million to strengthen, equivalent to 3% of net sales, up slightly from 2.5% last year. While achieving significantly more net sales, net working capital at the end of Q2 was at 567.1, almost flat compared to the 560.2 million at the end of March and even lower than the 598.6 million a year ago.

Speaker Change: Moving to our balance sheet.

Speaker Change: Expenditures were $16 9 million extra strength in Q2 equivalent to 3% of net sales up slightly from 25% last year.

While achieving significantly more net sales networking capital at the end of Q2 was at $567 1 million.

Speaker Change: Flat compared to the $560 2 million at the end of March and even lower than the $598 6 million a year ago.

David Allemann: It features an ultra light upper that is sprayed, not built in a one step process automated birobotic arm in just three minutes. Will it meet when marathon star Heleno Biri, so it's for the first time she was fairly skeptical. It truly doesn't look like an improvement running shoe you have ever seen before. But after putting them to the test in her training session, she decided they were too good to leave behind for competition.

Martin Hoffmann: Our inventory position stands at 401.3 million. Supply increased versus the 365.3 million at the end of Q1, but significantly lower than at the end of Q2 last year. While we remain laser-focused on actively managing our inventory at efficient levels, we are willing to lean in on certain key styles in order to capture the high demand we are observing around. As a result of our strong operating cash flow of 102.4 million Swiss francs in the quarter, we have improved our cash position from 584.6 million Swiss francs at the end of Q1'24 to 652.4 million Swiss francs at the end of Q Over the past 12 months, we achieved an operating cash flow of $412.2 million and have improved our cash position by $315.3 million.

Martin Hoffmann: Our inventory position stands at 401.3 million. The flight increase versus the $365.3 million at the end of Q1, but significantly lower than at the end of Q2 last year. While we remain laser focused on actively managing our inventory at efficient levels, we are willing to lean in on certain key styles in order to capture the high demand we are observing around. As a result of our strong operating cash flow of 102.4 million Swiss francs in the quarter, we have improved our cash position from 584.6 million Swiss francs at the end of Q1'24 to 652.4 million Swiss francs at the end of Q1

Speaker Change: Our inventory position stands at $401 3 million Swiss francs slight increase versus the $365 3 million at the end of Q1, but.

Speaker Change: But significantly lower than at the end of Q2 last year.

Speaker Change: While we remain laser focused on actively managing our inventory at efficient levels. We are willing to lean in on certain key styles in order to capture the high demand we are absorbing around the boat.

David Allemann: She then sunders all by building the marathon in Boston earlier this year, wearing this ground breaking shoe. Looking forward, this is just the start of a dream that we believe will challenge the norms of outstanding performance, manufacturing efficiency, sustainability, and potentially near-shoring all at once. In fact, this marks a turning point in manufacturing with the potential to be brought to many more on-products in the future. A few lucky folks might have called a first-hand glimpse of the innovation life at our own last pop-up in Paris over the past few weeks.

Speaker Change: As a result of our strong operating cash flow of $102 4 million for the strength of the quarter, we have improved our cash position from $584 six months with strength at the end of Q1 'twenty for up to $652 4 million Swiss francs at the end of Q2.

Martin Hoffmann: Over the past 12 months, we achieved an operating cashflow of 412.2 million and improved our cash position by 315.3. With that, I would like to move on to our outlook for the full year 2021. I'm sure you can see that from our remarks, and hopefully also from what you have been seeing and hearing about ON in recent weeks. We continue to experience an incredible amount of momentum around the country, from amazing product launches to groundbreaking innovation and Adelaide Stories and Successes by Tandek Frank-Parker. The summer has definitely lived up to her expectations, and they couldn't be happier with how all of our initiatives came together.

Speaker Change: Over the past 12 months, we achieved an operating cash flow of $412 2 million and have improved our cash position by 315 3 million.

Martin Hoffmann: With that, I would like to move on to our outlook for the full year 2020. I'm sure you can see that from our remarks today and, hopefully, also from what you have been seeing and hearing about in the recent weeks. We continue to experience an incredible amount of momentum around campus, from amazing product launches to groundbreaking innovations, from athlete stories and successes to authentic brand partners. The summer has definitely lived up to our expectations, and we couldn't be happier with how all of our initiatives came to life.

Speaker Change: With that I would like to move onto our outlook for the full year 2024.

Speaker Change: I'm sure you can see it from our remarks today.

Speaker Change: And hopefully also from what you've been seeing and hearing about on of our recent weeks and months.

David Allemann: I believe it's safe to say that our gas reactions to the light spray robots were incredibly positive. It left a clear message. On will always dare to take both paths on our mission towards achieving long-term innovation-led success. In essence, innovation and new technology enable us to create the best sports gear available. This allows us to broaden our product offering and reach an even larger community. Or in other words, our mission to ignite the human spirit's movement, we inspire others to dream on.

Speaker Change: We continue to experience an incredible amount of momentum around the on trend from amazing product launches to groundbreaking innovations from athlete stories and successes <unk> Frank partnerships.

Speaker Change: The summer has definitely lift up to our expectations and we couldnt be happier with how all of our initiatives came to life.

Martin Hoffmann: Seeing all the positive feedback and coverage gives our team so much energy and inspiration to continue on our journey of friendless innovation, challenging the status quo to deliver the best products and experiences to our fans around the world. And we are thrilled to see that all the attention we are generating is leading to increased brand awareness and conversion into online and offline traffic. This provides us with a lot of confidence for the continued high demand for the on-brand and our product, even above our expectations.

Martin Hoffmann: Seeing all the positive feedback and coverage gives our team so much energy and inspiration to continue on our journey of friendless innovation, challenging the status quo to deliver the best products and experiences to our fans around the world. And we are thrilled to see that all the attention we are generating is leading to increased brand awareness and conversions online and offline. This provides us with a lot of confidence for the continued high demand for the on-brand in our project, even above our expectations.

Speaker Change: Being all the positive feedback and coverage gives our teams so much energy and inspiration to continue on our journey of rentals innovation challenging the status quo to deliver the best products and experiences to our fans around the globe.

David Allemann: Whilst light spray is a look into the future, our innovation pipeline continues to deliver new and exciting products in the short term. An example is the Cloud Room Stripe, our latest type of performance product for a day. Available in a limited first-color way since early July, it will be more broadly launched in early September. The shoe revolutionizes the fast-running experience with an innovative, ultra-responsive drop-in mid-sole construction tailored to marathon racing. For the everyday runner, the newly launched Cloud Server Next offers a dynamic running sensation with our patented Cloud Tech face technology and an aesthetic inspired by the Cloud Room Echo series.

Speaker Change: And we are thrilled to see that all the attention. We are generating is leading to increase brand awareness and converting into online and offline traffic.

Speaker Change: This provides us with a lot of confidence for the continued high demand for the brand and our products.

Speaker Change: Even above our expectations.

Martin Hoffmann: At the same time, we acknowledge some of the ongoing distribution challenges to ensure we have the right product at the right place at the right time to fulfill the specific and full demand that is out there. We will build our brand by relying on a certain level of scarcity. We are not fully and consistently delivering to our own high expectations from an operational point of view. That being said, the strong consumer demand, as well as actions taken on our end to mitigate impacts from the warehouse transition, give us a lot of confidence to reiterate our 2024 constant currency net sales growth rate expectation of at least 30%. On a reported basis, at current spot rates and reflecting the most recent strength of the Swiss franc compared to our most meaningful currencies, including the US dollar, this implies 2.26 billion Swiss francs in net sales.

Martin Hoffmann: At the same time, we acknowledge some of the ongoing distribution challenges to ensure we have the right product at the right place at the right time to fulfill the specific and full demand that is out there. We will build our brand by relying on a certain level of scarcity. We are not fully and consistently delivering to our own high expectations from an operational perspective. That being said, the strong consumer demand, as well as actions taken on our end to mitigate impacts from the warehouse transition, give us a lot of confidence to reiterate our 2024 constant currency net sales growth rate expectation of at least 30%. On a reported basis, at current spot rates and reflecting the most recent strength of the Swiss franc compared to our most meaningful currencies, including the US dollar, this implies 2.26 billion Swiss francs in net sales.

Speaker Change: At the same time, we acknowledged some of the ongoing distribution challenges to ensure we have the right product at the right place at the right time to fulfill the specific control demand that is out there.

Speaker Change: We build our brand by relying on a certain level of scarcity, we're not fully and consistently delivering to our own high expectations from an operational perspective.

Speaker Change: The inkjet the strong consumer demand as well as actions taken on our end to mitigate impacts from the warehouse transition gives us a lot of confidence to reiterate our 2020 for constant currency net sales growth rate expectation of at least 30%.

David Allemann: We dream on this global talent. As I mentioned earlier, success is a team sport. Through authentic connections, we build long-lasting relationships with athletes in the on-athletics club, as well as partners like Sandaya, SK Twix, Igor Shvia Tech and Roger Federer. These partnerships allow us to create incredible momentum for the brand, as seen most recently in Paris, where our presence was felt. From our pop-up on-lapse located in the heart of the French capital, to our newest and largest flagship store on the legendary Champs-Élysées, Paris has given us the opportunity to leave a mark on the world's largest sport stage.

Speaker Change: On a reported basis at current spot rates and reflecting the most recent strength of the Swiss franc.

Speaker Change: <unk> two our most meaningful currencies, including the U S. Dollar this implies $2, two 6 billion Swiss francs and that set.

Martin Hoffmann: We are further maintaining our cross-profit margin guidance for the full year at around 60% and continue to expect an adjusted EBDA margin for the full year in the range of 16 to 16.5%. An incredible summer is slowly coming to an end. So many highlights in Paris and across the world give us even more energy and motivation to pursue our dreams in the second half and beyond.

Martin Hoffmann: We are further maintaining our cross-profit margin guidance for the full year at around 60% and continue to expect an adjusted EBTA margin for the full year in the range of 16 to 16.5%. An incredible summer is slowly coming. [inaudible] So many highlights in Paris and across the world give us even more energy and motivation to pursue our dreams in the second half at B.O. As David mentioned, we have, and always will be, committed to building on for the long term. A huge thank you and congratulations to our team for all the amazing.

Speaker Change: We are further maintaining our gross profit margin guidance for the full year at around 60% and continue to expect an adjusted EBITDA margin for the full year in the range of 16% to 16, 5%.

Speaker Change: And equivalent of summer is slowly coming to an end.

David Allemann: Sport remains one of the last and ultimate life moments to build cultural relevance for brands in performance and lifestyle. In the last weeks, on storytelling reached a global community of millions, and together with our global talents, we are just getting started.

Speaker Change: There are many highlights in Paris and across the board gives us even more energy and motivation to pursue our treatment plants.

Speaker Change: In the second half and beyond.

Martin Hoffmann: As David mentioned, we have and always will be committed to building on for long-term success. A huge thank you and congratulations to our team for all the amazing moments. As we continue to dream.

Speaker Change: As David mentioned, we have and always will be committed to building on our long term success.

David Allemann: If you remember three things from my introduction, I want you to remember this. First, on is streaming and building for the long term with an outstanding team of athletes, talents and global brand partners. We dream and win together, as performance is at the core of on. Second, the rigs taking approach of a founder-led company leads to radical innovation that will fuel On's product ramp and durable growth for years to come. And third, our bold long-term dreams are creating enduring brand and business value. The 2024 games have ended and on last this mark.

Speaker Change: Thank you and congratulations to our team for all the amazing moments.

Martin Hoffmann: As we continue to dream, David, Marc, and I would like to open up the floor to your questions. Operator, we're ready to begin. Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one.

Speaker Change: We continue to trade model.

Unknown Executive: With that, David, Marc, and I would like to open up the floor to your questions. Operator, we're ready to begin the Q&A. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star 1.

Speaker Change: With that David Morgan I would like to open up your question operator, we're ready to begin the Q&A session.

Unknown Executive: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one. We do ask that you limit yourself to one question. Your first question comes from the line of Jonathan Komp with Baird. Please go ahead.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue and if you'd like to withdraw that question again press star one.

Speaker Change: Do ask that you limit yourself to one question.

Krista: We do ask that you limit yourself to one question. Your first question comes from the line of Jonathan Komp with Baird. Please go ahead. Yeah, hi, good afternoon.

Speaker Change: First question comes from the line of Jonathan Komp with Baird. Please go ahead.

Jonathan Komp: Thank you. I want to follow up and just ask a little bit more about some of the constraints in North America. Could you maybe discuss how you're choosing to prioritize some of the new launches and products across channels, given the constraints? And then how are you thinking about the steps that are needed or the timeframe that you're looking for to get things fully operational to the standards that you expect them to be? Thank you. Hi John, it's Martin, and I come from my side here as well.

Jonathan Komp: Yeah, Hi, good afternoon. Thank you.

David Allemann: The road towards 2020-18 LA starts for us and on today.

Jonathan Komp: I wanted to follow up and just ask a little bit more about some of the constraints in North America.

Jonathan Komp: Could you maybe discuss how you are choosing to prioritize some of the new launches and products across channels given the constraints and then how are you thinking about the steps that are needed or at the time timeframe that you're looking for to get things fully operational to the standards that you expect them to be thank you.

Martin Hoffmann: It's my great pleasure to end over to Martin for more details review of the quarter. Martin, please. Thank you, David, and Bonjour from my side as well.

Martin Hoffmann: Please first allow me to begin with how a revolutionary technology like Light Spray links to our most important asset, our culture. The level of dedication and energy that our team put into this project became visible to the world over these past weeks. Witnessing the team presenting their innovation to global media, star athletes and leaders in business and politics from around the world was a big highlight for us. Deprived and passionately matched what we saw from athletes winning medals. We are thrilled and proud to work with such an exceptional team.

Jonathan Komp: Yeah.

Martin Hoffmann: Hi John, it's Martin, and I come from my side here as well. So just to put this again into perspective. As you know, we are in the process of building a fully automated warehouse in our Atlanta facility. And as a result, we are temporarily operating out of a space that is simply not optimized. And so, as a result, we experience capacity constraints in that warehouse. And this then leads to basically unreliable late deliveries but also inventory shortages. We are able to shift some of that capacity to our very well-performing warehouse on the

Jonathan Komp: Hi, John This is Martin.

Speaker Change: Compromised idea as well.

Martin Hoffmann: So just to put this again into perspective, so as you know, we are in the process of building a fully automated warehouse in our Atlanta facility. And so as a result, we are temporarily operating out of a space that is simply not optimized. And so, as a result, we experience capacity constraints in that warehouse. And this then leads to basically unreliable late deliveries but also inventory shortages. We are able to shift some of that capacity to our very well-performing warehouse on the West Coast, but only to the extent that we have inventory there.

Speaker Change: So just to put this again.

Speaker Change: Perspective so.

As you know we are in the process of building a fully automated warehouse in our Atlanta facility and so as a result, we are.

Speaker Change: Temporarily operating out of a space that is simply not optimized and so as a result, we experienced.

Speaker Change: Capacity constraints in that warehouse and this then leads into.

Martin Hoffmann: Not too long ago, we talked about our big dreams for this summer. Looking back at the past weeks, it's clear that we have laid the groundwork for what we believe will shape on for many years to come. When they are Light Spray, our athletes, our largest flagship store to date, leading community events like on track nights. These big moments were not created to boost short-term sales, but to build the foundation for the long term, durable and profitable growth that we outlined at our investor day one year ago.

Speaker Change: Basically.

Speaker Change: Unreliable late deliveries, but also inventory shortages.

Martin Hoffmann: West Coast, but only to the extent that we have inventory there. And so the impact on our business that we are seeing is

Speaker Change: We are able to shift some of that capacity to our very well performing warehouse on the west coast, but only to the extent that we have inventory there and so the.

Martin Hoffmann: And so the impact on our business that we are seeing is both in D2C and wholesale. But it's a bit hard to quantify, but we would expect, without those impacts, that we would have been able to deliver sales growth at a global level above our four-year guidance. And we would have seen a stronger D2C share, a higher D2C share, as we clearly missed opportunities in the D2C channel, while in the wholesale channel, you always have the buffer of in-channel inventory.

Speaker Change: The impact on our business that we are seeing is.

Martin Hoffmann: It's a bit hard to quantify, but we would expect without those impacts that we would have been able to deliver sales growth on a global level above our full year guidance.

Speaker Change: It's both in DTC and wholesale, but it's a bit hard to quantify but we would expect without those.

Martin Hoffmann: To elevate our friend awareness with a wider hand base and to push our credibility as an innovation led global premium performance for a friend. While huge moments in themselves, we further boosted them with significant marketing investments across all our channels. And it's really working. The friend is maintaining its incredible momentum based on direct customer feedback, continued sales through strengths, our friend awareness tracker, a strong increase in Google searches and millions of media impression.

Speaker Change: Impact that we would have been able to deliver sales growth on a global level above our full year guidance.

Martin Hoffmann: We would have seen a stronger D2C share or higher.

Speaker Change: And we would have seen a stronger D to C share of higher DTC share SB clearly missed opportunities in the D to C channel while into wholesale channel you always have the buffer of in channel inventory, but then also we clearly saw that the wholesale channel was able to capture some of the traffic.

Martin Hoffmann: D2C share as we clearly missed opportunities in the D2C channel while in the wholesale channel, you always have the buffer of in-channel inventory, but we also clearly saw that.

Martin Hoffmann: But also, we clearly saw that the wholesale channel was able to capture some of the traffic that initially came to our website because of the constraints that we had. So we had already installed a lot of measures.

Martin Hoffmann: https://www.hldg.com

Speaker Change: That initially came tower website.

Martin Hoffmann: Because of the constraints that we had, we had already installed a lot of measures, and as a result, we clearly saw the strongest impact in our D2C business in the first half of Q2. And ever since, we have seen a clear re-acceleration of the growth rate in D2C, and this also continued into the first weeks of the new quarter.

Speaker Change: Because of the constraints that we that we had.

Martin Hoffmann: Our multi-channel strategy allows us to capture the brand momentum globally and to convert it into continued strong sales growth across all channels. As a result, we are very pleased to have reached net sales of 567.7 million Swiss francs in Q2. Up by 27.8% the over a year on a reported basis. And 29.4% on the constant current, and Nancy Bates.

Speaker Change: So we already installed.

Speaker Change: <unk> installed a lot of measures and as a result, we.

Martin Hoffmann: And as a result, we clearly saw the strongest impact on our D2C business in the first half of Q2. And ever since, we have seen a clear re-acceleration of the growth rate in D2C, which also continued into the first weeks of the new quarter.

Speaker Change: Clearly has seen the strongest impact in our DTC business in the first half of <unk>.

Speaker Change: Q2 and ever since we have seen a clear re acceleration of the growth rate in DTC.

Speaker Change: And this also continued into the first.

Martin Hoffmann: the new quarter. So we are

Speaker Change: Weeks of the new quarter.

Martin Hoffmann: With that, we have for the first time surpassed 1 billion Swiss friends in that cell in the 6 months period and 2 billion Swiss friends when looking at the last 12 months period, both marking incredible milestone and achievements that we are extremely proud of. As mentioned, the strong friend momentum converts into strong demand for all our channels and partners. The ability to convert this momentum to cells, especially in the America's region, would have been even higher.

Speaker Change: So we are.

Martin Hoffmann: I am optimistic that we were able to take the measures to be

Martin Hoffmann: So we are optimistic that we were able to take the measures to lower the impact, but we still expect the impact. And as I said, for us, it's much more about not living up to our high expectations from an operational perspective versus actually losing a few percentage points on the sales numbers. So we will clearly prioritize important franchises, we prioritize our important retail partners, we clearly prioritize our D2C channel, but there are simply limitations to the fact that inventory is not always at the right place at the right time where capacity is.

Optimistic that we are able to to the measures to lower the impact, but we still expect the impact and as I said for us it's much more about.

Martin Hoffmann: lower the impact, but we still expect an impact. And as I said, for us, it's much.

Martin Hoffmann: much more about not living up to our high expectations from an operational perspective.

Speaker Change: Not living up to our high expectations from an operational perspective versus actually losing a few percentage points on this on the sales numbers.

Martin Hoffmann: versus actually losing a few percentage points on the sales number.

Martin Hoffmann: So we will clearly prioritize important franchises; we prioritize our important retail partners.

Speaker Change: So we were clearly prioritize important franchises we prioritize.

Speaker Change: Our important retail partners.

Martin Hoffmann: But the ongoing transition of our Atlanta warehouse led to some product availability constraints including key friendships like the cloud and to delayed or missing deliveries, both towards our D2C and wholesale customers. As anticipated, we saw strong growth re-exceleration in our wholesale channel in Q2, in comparison to the last two quarters. Holes and net cells grew by 27.6% in the quarter on a reported basis and 28.8% on a constant currency basis, reaching 358.2 million Swiss friends.

Martin Hoffmann: We clearly prioritize our D2C channel, but there are simply limitations in the fact that the inventory is not always at the right place at the right time where the capacity is. Important for everyone is that we are well on track to have our automated warehouse live in the first half of next year. And I think, in the end, this is where we want to be as this lays the foundation for the years to come.

Speaker Change: We clearly prioritize our DTC channel.

Speaker Change: But they are simply limitations by the fact that the inventory is not always at the right place at the right time with the capacity sits.

Martin Hoffmann: Important for everyone is that we are well on track to have our automated warehouse live in the first half of next year. And I think, in the end, this is where we want to be as this lays the foundation for the years to come. Great, that's very, very helpful. Thank you. Your next question comes from the line of Jim Duffy with Steeple. Please go ahead.

Speaker Change: Important for everyone is that we are well on track to have our automated warehouse life.

Speaker Change: First half of next year.

Speaker Change: I think India and does this business, where we want to be at this lays the foundation for four for the years to come.

David Allemann: Great. That's very, very helpful. Thank you. Your next question comes from the line of Jim Duffy with Stiefel. Please go ahead.

Speaker Change: Great that's very very helpful. Thank you.

Martin Hoffmann: We continue to execute on the communicated strategy to focus on our existing distribution partners, driving our ongoing growth paths with deeper penetration at strategic accounts, damsel growth and ongoing market check-ins. At the same time, we are adding a lower number of incremental wholesale doors than we have over the past years. We are pleased to see that the growing brand awareness tries strong, full price demand to our existing wholesale partners across key accounts and specialty retailers.

Speaker Change: Your next question comes from the line of Jim Duffy with Stifel. Please go ahead.

Speaker Change:

James Duffy: Thank you. I wanted to talk about marketing. Q2 and Q3 have been big brand building moments. Are there any metrics you can share about consumer engagement? Specifically, I'm curious whether Zendaya led to any shift in demographics and if there are any trends you can share around engagement following the Olympics. Thank you.

Jim Duffy: Thank you.

Jim Duffy: Wanted to talk about marketing Q2, and Q3 have been big brand building moments are there any metrics you can share about consumer engagement, specifically I'm curious whether that.

Jim Duffy: I will lead to any shift in demographics.

Jim Duffy: And if there are any trends you can share around engagement. Following the Olympics. Thank you.

David Allemann: As you mentioned, On had an incredible quarter with the visibility of the brand very, very high around Zendaya, but also around Lightspray, the innovation launch in Paris, and, of course, there was a strong presence of our On athletes. To just kind of share one step, Zendaya's Airtames match with Sweater was viewed by 15 million people, was viewed over 15 million times on Insta, and 7 million times on TikTok, and of course, you also saw that on our brand trackers, and then also on the website visits to our site.

David Allemann: Hi James, this is David. Welcome. So, you mentioned it, ON had an incredible quarter with the visibility of the brand very, very high around Zendaya, but also around Lightspray, the innovation launch in Paris, and, of course, also the strong presence of our ON athletes. To just kind of share one step, is that Zendaya's Airtel

Jim Duffy: Hi, James This is David welcome. So you mentioned that you all had an incredible quarter with debates ability after brand very very high rents and de orbit those around light gray innovation launching presence in Paris and of course those are strong presence of our on that to just kind of channel share wants to.

Martin Hoffmann: Both in their physical as well as digital channels. Our D2C channel continued to outperform wholesale and reached 209.4 million Swiss friends in Q2, growing by 28.1% over a year on a reported basis and 30.4% on a constant currency basis. As a result, the Q2 D2C share increased versus the prior period, reaching 36.9%. In our incompativeness, we had seen some software demand in the first days of the quarter, followed by a re-exceleration of growth in the second half, petrice record hydrophic on our website.

Speaker Change: That is.

Speaker Change: That <unk> match with better was viewed by 15 million most viewed over 15 million times on Insta and 7 million times on picked up kind of course, you also saw that on our brand trackers and panels.

David Allemann: And, of course, you also saw that on our brand trackers and then also on our social media.

David Allemann: on the website, visit our site. So OMA has clearly been in the conversation of a.

Speaker Change: Website visits to our site. So all has clearly been in the conversation of a global audience.

David Allemann: So On has clearly been in the conversation of a global audience of millions in the last three months, always with performance innovation at the core and, at the same time, reaching popular culture. And Jim, let me probably just say this, in a space where established brands historically had a monopoly almost on the headlines of innovation, athlete stories, and sporting emotion, we firmly placed ourselves, we believe, not just as a contender but a leading sportswear brand with a strong point of view.

David Allemann: Claude Lodens on Millen. [inaudible]

David Allemann: In the last three months, always with performance innovation at the core, and at the same time, we...

Speaker Change: In the last three months.

Martin Hoffmann: This includes a very strong start for some of our recent digital channel expansion. The global launch of our first commercial app is now complete, with both downloads and transactions well ahead of our expectation. In addition, we are encouraged to see a very high parallel share on the app, comparable to what is reached in our retail environment. The increasing friend awareness is also visible in a wave of new visitors to the expanding network of retail stores, in our new Paris location and beyond. Our New York City Lafayette Store remains a vibrant hotspot, attracting some of the highest traffic levels among all our retail locations this quarter.

Always this performance innovation at the core and at the same time, reaching our popular culture.

Speaker Change: Jim Let me probably just say this in our space Theyre established brands historically had a monopoly almost on the headlines of innovation athlete stories and sporting emotion, we firmly placed ourselves to believe not just as a contender for the leading sportswear brand with a strong point of view, so really dreaming together represented a strong.

David Allemann: Brands historically had a monopoly almost on the headlines of innovation, athlete stories, and sporting emotion. We firmly placed ourselves, we believe, not just as a contender but a leading sportswear brand with a strong point of view. So really, dreaming together represented a strong point of view that captured the community spirit of the games.

David Allemann: So really dreaming together represented a strong point of view that captured the community spirit of the Games. So this is something that is building for the long term, so we're not just looking. We feel it's a little bit too early to look back, but we really look forward to how this will unfold in the momentum of product sales. Thank you, David. Your next question comes from the line of John Kernan with TD Cowan. Please go ahead. Thanks for taking my question and congratulations on all the success and innovation. Martin, can you talk to the second half?

Speaker Change: Point of view that captured a community spirit of the game.

David Allemann: community spirit of the Games. So this is something that is building for the long term, so we're not just looking, so we feel it's a little bit too early to look back, but we really look forward to how this will unfold in the momentum of product sales.

Speaker Change: This is something that is building for the long term. So we're not just looking sorry, we feel it a little bit too early to look back, but we really look forward how do you screen all fold in the momentum of our products.

David: Thank you David.

Martin Hoffmann: We are excited to open our second store in Manhattan in a few months, where visitors will have even more space to immerse themselves in the full upon experience. Just a couple of weeks ago, we also opened our first ever store in Hong Kong. Komp, which we celebrated with some of our closest partners in taste-makers in the region. Despite the early days, the store has clearly exceeded our internal expectations, effectively doubling the initial projections and showcasing the remarkable brand teeth that's noticeable in the region.

Martin Hoffmann: Your next question comes from the line of John Kernan with TD Cowan. Please go ahead.

Speaker Change: Your next question comes from the line of John Kernan with TD Cowen. Please go ahead.

Martin Hoffmann: Thanks for taking my question and congratulations on all the success and innovation. Martin, can you talk to the second half?

Thanks for taking my question and congrats on all the success in innovation.

Martin: Martin can you talk to the second half.

Martin Hoffmann: EBITDA, adjusted EBITDA margin guidance. It looks like incremental EBITDA dollars are going to start to accelerate on a year over year basis in the back half. What gives you that confidence? And obviously, gross margin. You've given us a pretty good picture of gross margin and SG&A, but just curious if there are any dynamics between Q3 and Q4 that we should be aware of.

John Kernan: EBITDA adjusted EBITDA margin guidance, it looks like incremental EBITDA dollars are going to start to accelerate on a year over year basis in the back half what gives you that confidence.

John Kernan: EBITDA, and adjusted EBITDA margin guidance. It looks like incremental EBITDA dollars are going to start to accelerate on a year over year basis in the back half. What gives you that confidence?

Martin Hoffmann: Obviously Gross Margin, you've given us a pretty good picture of Gross Margin and SGNA, but just curious if there's any dynamics between Q3 and Q4 that we should be aware of. Our guidance for the full year implies a slight re-acceleration in the second half of the year. In general, the second half of the year will be of higher volume, and therefore, also basically, the cost base will be overcompensated by more sales.

Speaker Change: Gross margin.

Speaker Change: Give us a pretty good picture of gross margin and SG&A, but just curious if there's any dynamics between Q3 and Q4 that we should be aware of.

Martin Hoffmann: At our investor day last October, we outlined our focus on our own retailers, a key pillar for global growth. During the last year, we expanded our network to 12 stores outside of China and 25 stores in China. And we gained a lot of additional confidence in the power of the channel to drive growth, higher engagement levels with new and existing customers, increasing and strong apparel shares, and very importantly additional profitability.

Martin Hoffmann: Here's our day, our implied guidance.

Speaker Change: Yes.

Speaker Change: Our implied guidance.

Martin Hoffmann: for our guidance for the full year implies a slight re-acceleration in the second half of the year. In general, the second half of the year will be of higher volume. And therefore, also, basically, the cost base will be overcompensated by more sales.

Speaker Change: For the for all of our guidance what is that for the for the full year implies a slight reacceleration.

Speaker Change: In the second half of the year.

Speaker Change: In general second half of the year will be off a higher volume and therefore.

Speaker Change: Although basically the cost base.

That would be overcompensated by.

Speaker Change: By more sales.

Martin Hoffmann: And as we reiterated, we...

Martin Hoffmann: As we reiterated, we see our cross profit margin at a very strong 60% for the full year. A slightly higher cross profit margin in the second half of the year than in the first half of the year, of course, significantly driven by the holiday season, which will deliver and is expected to deliver a very D2C heavy fourth quarter. And then, as mentioned, we had significant investments on the marketing side in Q2, leading up to all the events that David was just talking about.

Speaker Change: SBA reiterated.

Martin Hoffmann: Now let me switch to the regional performance. The mere reach net sales of 138.4 million with strengths in the quarter, growing by 21.8% over a year or 22.2% on the constant currency basis. We are very happy with the performance in the region, both from an absolute net sales achievement, as well as a product composition perspective. We continue to see exceptional momentum in the United Kingdom across all channels. But from a smaller base, sales and brands, but also Netherlands and Belgium clearly accelerated.

Martin Hoffmann: We see our cross-profit margin at a very strong 60% for the full year, so a slightly stronger cross-profit margin in the second half of the year than in the first half of the year, of course, significantly driven by the holiday season, which will deliver and is expected to deliver a very D2C-heavy fourth quarter. And then, as mentioned, we had significant investments on the marketing side in Q2, leading up to all the events that David was just talking about.

Speaker Change: We do see our gross profit margin.

Speaker Change: Strong 60% for the full year.

Speaker Change: So slightly stronger gross profit margins second half of the year than in the first half of the year of course significantly driven by.

Speaker Change: The holiday season, which.

Speaker Change: We'll deliver and is expect to deliver.

Speaker Change: DTC heavy fourth quarter.

Speaker Change: And then as mentioned we had significant investments on the marketing side in Q2, leading up to all the events that David was just talking about that we expect in the second half of the of the year.

Martin Hoffmann: So we expect, in the second half of the year, a slightly lower percentage of net sales flowing into marketing. And this gives us the confidence that we will operate in that range of 16 to 16.5%. Also, very important for us is that we don't restrict our investment in the long-term growth of the company by the temporary warehouse disruptions that we see. So for us, this is always a priority and then as a priority to be in that range of 16 to 16.5%. And this is where we feel very comfortable that we can manage the business in the second half. That's helpful because I don't want to follow it. It's just on Ameya.

Martin Hoffmann: And this gives us confidence that we operate in that industry.

Martin Hoffmann: But most important is the acceleration and increased share of sales from our performance running range within some of our legacy markets in Central Europe, which we see as a result of our strategic prioritization over the past months. Moving on to the Americas, the region contributed 370 million with strengths into two, thus far our largest quarter in terms of absolute net sales and representing a reported growth rate of 24.8% or 25.8% on a constant current basis.

Speaker Change: Slightly lower percentage of net sales flowing into into marketing.

Speaker Change: This gives us the confidence that we operate in that in that range of 60% to 65%.

Martin Hoffmann: We operate in that range of 16 to 16.5 percent. Also, very important for us is that we don't restrict our investment in the long-term growth of the company by the temporary warehouse disruptions that we see. So for us, this is always a priority and then, as a priority, to be in that range of 16 to 16 and a half percent. And this is where we feel very comfortable that we can manage the business in the second half.

Speaker Change: All the very important for us.

That we don't.

Speaker Change: <unk> our investments into the long term growth of the company by the temporary disruption that we see so for US. This is always a priority and then as a priority to be in that range of 16 to 67, 5% and does this but we feel very comfortable that we can manage the.

Martin Hoffmann: We already mentioned the impact of the ongoing transition of our land warehouse, which was even more visible in our D2C than our whole search. But we are fully focused on improving the situation. We expect a continued impact in the second half of the year. But this transition is essential to scale our distribution capabilities in the US and the low term. And to ultimately fulfill the incredible rent momentum and demand that we continue to expect in the region.

Speaker Change: The business in the second half.

Marc Maurer: In Q1, there were some wholesale door closures; AMEA revenues did accelerate on a slightly easier comparison in Q2. How should we think about the door closures in AMEA and wholesale into the back half of the year? Does that affect any one quarter greater than the other?

Marc Maurer: And some of the channel dynamics there, I know Q1 still had some wholesale door closures. Ameya revenue should accelerate on a slightly easier comparison in Q2. How should we think about the door closures in Ameya in wholesale and into the back half of the year and just that affect any one quarter greater than the other? Yes, this is Marc speaking. Hello, everyone.

Speaker Change: That's helpful.

Speaker Change: My follow up is just on EMEA.

Speaker Change: And some of the channel dynamics, there I know Q1.

Speaker Change: There were some wholesale door closures.

Speaker Change: EMEA revenues did accelerate on a slightly easier compare in Q2, how should we think about.

Speaker Change: The door closures in EMEA and down into the back half of the year and does that.

Speaker Change: Affect any one quarter, great greater than the other.

Marc Maurer: Yes, this is Marc speaking. Hello, everyone.

Marc Maurer: So indeed, I think I'm very happy with a very strong return to much, much stronger growth in India, 22.2% and constant currency. And some of the key markets like Germany and Austria will deliver positive growth in line with that. And so, we see the UK accelerating, we see France, for example, really property from the Olympics, but also from the store openings that we had from our brand built ever doing. And so when it comes to the closures, a lot of that impact is more or less over now.

Speaker Change: Yes. This is mark speaking Hello, everyone.

Martin Hoffmann: In the epic region, we continue to win market shares past and across more countries than expected. The region grew by an incredible 73.7% in Q2, the reach 59.2 million with strengths. On a constant current basis, the growth was even higher at 84.7%. From the continued strong momentum in China, daily Q is in front of our store in Japan, reconciles and very nascent markets such as Indonesia or the Philippines. And of course, the already mentioned success of our new store in Hong Kong. Current demand is clearly exceeding supply.

Speaker Change: So we need I think everybody happy with them.

Marc Maurer: So indeed, I think we're very happy with a very strong return to much, much stronger growth in EMEA, 22.2% constant currency. And some of the key markets like Germany and Austria delivered positive growth to that. And so we see the UK accelerating, and France, for example, really profiting from the Olympics, but also from the store openings that we had from the brand build that we're doing. And so when it comes to the closures, a lot of that impact is more or less over now.

Speaker Change: Strong return to much much stronger growth in EMEA and 22, 2% in constant currency.

Speaker Change: And in some of the key markets like Germany, and Austria delivered positive growth to that and so we see the UK accelerating we see France for example.

Speaker Change: Really profiting from from the Olympics, but also from from the store openings that we had from our brand build that we're doing.

Marc Maurer: So we feel we have a way more kind of stabilized perspective on how we can look at India for Q3 and Q4 as well. And that's also built in the guidance on overall store growth. Historically, we've been growing the store base by roughly 10% year over here. We're more looking at 5% right now.

Speaker Change: So so when it comes to that to the closures a lot of that impact.

Speaker Change: More or less over now so we feel we have a way more.

Marc Maurer: So we feel we have a much more kind of stabilized perspective on how we can look at EMEA for Q3 and Q4 as well. And that's also built into the guidance. On overall store growth, historically, we've been growing the store base by roughly 10% year over year. But we're more looking at 5% right now. And this really very much comes from that we feel we're very well on track when it comes to existing store and new store growth in all key markets. And we're super happy where we stand with our partners when it comes to basically executing on the guidance that we gave you.

Martin Hoffmann: Turning to the performance by product. Group by 26.7% here. Maria, reaching 542.5 millions with strength in Q2. Demand for our products remains strong across all product verticals. In line with our strategic priorities, performance running continues to try for a significant part of growth. We maintain strong growth across all our running franchises, including the Cloud Monster, Cloud Server and Cloud Runner. And we keep fueling this growth with new product and innovation. The newly released Cloud Runner 2 has been a great success and elevates this important franchise and is a stable for the everyday runner.

Speaker Change: Stabilized perspective on how we can look at EMEA for Q3, and Q4 as well and that's also built in the guidance.

Speaker Change: On an overall store growth, we historically, we've been growing the store base by roughly 10% year over year, we're more looking at 5% right now.

Marc Maurer: And this really very much comes from that we feel we're very well on track when it comes to existing store and new store growth in all key markets. And we're super happy where we stand with our partners when it comes to basically executing on the guidance that we gave you. Excellent. Thank you. Your next question comes from the line of Jay Sole with UBS. Please go ahead. Great. Thank you so much.

Speaker Change: Really very much comes from that we feel.

Speaker Change: Very well on track when it comes to existing store and new store growth in our key markets and we're Super happy marriage that with our partners. When it comes to basically executing on the guidance that we gave you.

Speaker Change: Excellent. Thank you.

Marc Maurer: Your next question comes from the line of Jay Sole with UBS. Please go ahead.

Jay Sole: Your next question comes from the line of Jay sole with UBS. Please go ahead.

Marc Maurer: Great. Thank you so much.

Jay Sole: I have a two-part question. First, you talked a lot about light spray. Can you give us an idea of what the plan is for that product? I mean, is it going to be just something for elite athletes, or is that something that the mass market will have an opportunity to buy? And secondly, it sounded like the apparel initiatives around sizing and some of the things you've been working on over the last couple of quarters and years have gone well, and you're seeing some positive signs there.

Speaker Change: Great. Thank you so much of a two part question first you talked a lot about <unk> can you give us an idea of what's the plan for that product I mean is it going to be just something currently to athletes or is that something that the mass market will have an opportunity to Dubai and then secondly.

Martin Hoffmann: The Cloud Server next, which we just launched in early August, extends our successful Cloud Server line towards a lower but still premium price point and significantly expands the reach and the transferable market. Now performance all day vertical, the Cloud hills continues to fly off the shelf. The list index just called the Cloud hill 2.0 of our lower-ever collaboration, the quarter hottest product.

Jay Sole: It sounded like the apparel initiatives youre on sizing and some of the things you've been working on over the last couple.

Speaker Change: The quarters and years have been.

Jay Sole: Done well and Youre seeing some positive signs there can you just talk about big picture. How you are feeling about apparel today versus 90 days ago. I mean, do you see it on track to be coming.

Jay Sole: Can you just talk about the big picture, how you're feeling about apparel today versus 90 days ago? Do you see it on track to becoming a higher percentage of total sales? And if you can give us an idea about that, that'd be helpful. Thank you.

Martin Hoffmann: From smaller base, but growing at a rapid speed is our performance tennis category. Very excited to be well positioned to try and capture the increasing cultural relevance of the sport. The Roger is amongst our fastest growing franchises, but the tennis inspires fans to own not only on footwear but also the parallel pieces. The highly successful launch of our tennis appell collection earlier this year clearly exemplifies this and was further fueled by the excitement surrounding the air tennis match between Tendaya and Roger.

Speaker Change: A higher percentage of total sales.

Speaker Change: He can give us an idea about that that'd be helpful. Thank you.

Marc Maurer: Let me take the light spray question and then hand over to David, who will take the apparel question, by the way, which we also see reflected in the pre-order growth. So a lot of positive signs, really, for the second half of the year and also for 2025 on the apparel side. So I think, please think of light spray in three dimensions.

Marc Maurer: I have a two-part question. First, you talked a lot about light spray. Can you give us an idea of what the plan is for that product? I mean, is it going to be just something for elite athletes, or is that something that the mass market will have an opportunity to buy? And secondly, it sounded like the apparel initiatives around sizing and some of the things you've been working on over the last couple of quarters and years have gone well, and you're seeing some positive signs there.

Speaker Change: Let me take the light Gray question, then hand over to David.

David: We will take the.

David: Apparel question.

David: By the way, which we also see reflected in the preorder growth. So a lot of positive signs really for for second half year, but also for 25 on the apparel side. So.

Marc Maurer: I think, first, it's really a manufacturing revolution. So we're very much moving from an OPEX-led production model to more of a CAPEX model, and this allows us to, you know, basically manufacture shoes way closer to the consumer. So think about nearshoring and with way fewer parts.

David: I think pleasing complied spray in three dimensions, I think firstly, it's really a manufacturing revolution. So we're very much moving from an opex, let production model to more of a capex model and this allows us to basically manufacture shoes and wait closer to the consumer and so.

Martin Hoffmann: As previewed in our previous public updates, the initiatives we have been taking on the appell site are beginning to show in the numbers too. Net sales in the parallel crew by an outstanding 63% in Q2, the reached 21.9 million Swiss friends. Based on the momentum we are seeing in wholesale and even more in our own channels, we are confident in the ability to try significant growth and to increase our apparel share consistently over the coming quarters.

David: Think about near shoring and with way less parks.

Marc Maurer: So this is the first step; we have our first station right now, and the goal is very clear that we can expand that significantly. Then, secondly, it is very much an advanced technology that we were able to launch on the peak performance side. We were able to create a new look that has triggered lots of interest beyond our athletes. And it is very clearly our goal that we are able to bring this look and design and this feel to the mass market and not limit it just to the top athletes. And thirdly, we're very proud that it allows us to take huge steps in sustainability.

David: So this is the first.

David: And so we have our first station right now.

David: And the goal is very clear that we can expand that significantly then secondly, it is it is very much in our product technology that we were able to launch on the peak performance side, we were able to create a new look and that has triggered a lot of interest beyond our athletes and it is very clearly our goal that we're able to bring this look and decide.

Martin Hoffmann: New products, but also exciting collaborations like the one with Loeba or South Korean post-archive action, drove significant awareness for the category and also allowed us to reach a higher level of engagement from our fans. For example, we provided members with early access to the post-archive action collection and the launch was a huge success. In China, the number of new members on launch date equaled what we typically acquire over a period of two weeks.

David: And in this field and.

David: To the mass market and not limited just to that top athletes and then thirdly, and we're very proud that it allows us to take huge steps in sustainability, so perhaps at 75% less <unk> emissions than a traditional approach.

Marc Maurer: So the upper has 75% less CO2 emissions than a traditional upper, and obviously being able to manufacture closer to the consumer with less pieces, it allows us to be much, much closer to where the demand is, so also optimized from a supply versus demand perspective, and we feel these things taken together and give us a lot of hope that Lightsbury will allow us to really change some of the things that we're doing but we're at very, very beginning of the process so please don't think in like a six months perspective here and think about this in a very much long term perspective and we're looking forward to bring the product to more consumers and in Q4 and so we have a very clear plan but sometimes it's nice to keep some surprises for our fans and we would love to keep this surprise and you'll see it when the robot will be basically placed somewhere else across the globe and when our fans will be able to have access to the product. So, Jay, kind of, this is David, just coming to a peril, you've seen the 63% growth in Q2 for a peril, which is incredible, of course, that's a result of an incredible brand, he's that we already talked about, and people are now also looking to dress head to toe in an Indian brand, that's leading actually to even an increased momentum. So Marc already hinted to it.

David: And obviously.

David: Being able to manufacture closer to the consumer with less pieces. It allows us to be much much closer to where the demand is so also optimized from a supply versus demand perspective.

Martin Hoffmann: Last but not least, we are very proud of our newest accessories offering, our first spec collection. It's another testimonial to the power of our team to innovate and redefine products. Innovations like the Swiss style crap handles or our proprietary fit-lock design buckets made a unique premium design than that around functionality for people on the move. I had the privilege to use the back for my travels over the past year already and keep on receiving positive reactions at almost every security check.

David: And we feel these things taken together give us a lot of hope that.

David: Lightspeed will allow us to.

David: To really change some of the things that we're doing but we're at very very beginning of the process. So please don't thinking in like six months perspective here.

David: About this in a very much long term perspective.

Speaker Change: And we're looking forward to bring the products to more consumers and in Q4, and so we have a very clear plan, but that sometimes it's nice to keep some surprises for our fans and we would love to keep this surprised and you'll see it when the robot will be basically placed someone else somewhere else across the globe and when our fence will.

Martin Hoffmann: Nick, moving down the P&L, Cross-Profit reached 340.2 millions with strength in the quarter, representing a strong and premium Cross-Profit margin of 59.9%. Compared to the prior year period, we benefited from lower freight rates in Q2 this year, slightly offset, but a higher preferred share was a historically low-level last year. As G&A expenses, excluding shape as compensation, we are 275.8 millions with strength in Q2, equivalent to 48.6% of net sales, flat was the same period last year.

Speaker Change: To be able to have access to the product.

Marc Maurer: Can you just talk about the big picture, how you're feeling about apparel today versus 90 days ago? Do you see it on track to becoming a higher percentage of total sales? And if you can give us an idea about that, that'd be helpful. Thank you.

Speaker Change: Okay.

Speaker Change: This is David just coming to apparel, you have seen the 63% growth in Q2 for apparel, which is incredible.

Marc Maurer: Let me take the light spray question and then hand over to David, who will take the apparel question, by the way, which we also see reflected in the pre-order growth. So a lot of positive signs really for the second half of the year but also for 2025 on the apparel side. I think you should think of light spray in three dimensions.

Marc Maurer: I think first, it's really a manufacturing revolution. So we're very much moving from an opex-led production model to more of a capex model, and this allows us to, you know, basically manufacture shoes way closer to the consumer, so think about nearshoring and with way fewer parts. So this is the first step; we have our first station right now, and the goal is very clear that we can expand that significantly. Then, secondly, it is very much an advanced technology that we were able to launch on the peak performance side.

Marc Maurer: We were able to create a new look that has triggered lots of interest beyond our athletes. And it is very clearly our goal that we're able to bring this look and design and this feel to the mass market and not limit it just to the top athletes. And then thirdly, we're very proud that it allows us to take huge steps in sustainability. So the upper has 75% less CO2 emissions than a traditional upper, and obviously being able to manufacture closer to the consumer with less pieces, it allows us to be much, much closer to where the demand is, so also optimized from a supply versus demand perspective, and we feel these things taken together and give us a lot of hope that Lightspray will allow us to really change some of the things that we're doing but we're at the very very beginning of the process so please don't think in like a six months perspective here and think about this in a very much long-term perspective and we're looking forward to bring the product to more consumers in Q4 and so we have a very clear plan but sometimes it's nice to keep some surprises for our fans and we would love to keep this surprise and and you'll see it when the robot will be basically placed somewhere else across the globe and when you know our fans will be able to have access to it.

David Allemann: So Jay, this is David, just coming to Apparel. You've seen the 63% growth in Q2 for Apparel, which is incredible. Of course, that's a result.

Speaker Change: Of course, that's a result of an incredible brand heat that we already talked about and people are now also looking to dress head to toe in India on brand and.

David Allemann: of the incredible brand heat that we have already talked about, and people are now also looking to dress head-to-toe in their own brands.

David Allemann: And, um, Um, um, um, um, that's actually leading actually.

Martin Hoffmann: As plants, we increased marketing expenses to support our big brand building in the statistics that summer. At the same time, distribution expenses as percent of sales were lower compared to Q2 2023, as a result of lower warehouse in costs as well as operational efficiency gains. The resulting adjusted EBDA margin for Q2 is 16%, notably up from 14.1% in Q2 2023. The more stable US dollars with strength Fx rate, during the quarter supported a less volatile foreign exchange result, than what we have seen in recent quarters. As a result, the strong bottom line for the quarter truly reflects our operational success and profitability.

Speaker Change: That's that's leading actually to even an increased momentum and so mark already hinted to it.

David Allemann: Julia, to even increased momentum. That's all I'm going to show you.

David Allemann: Apparel saw a doubling in pre-orders for Fall-Winter 24. So we see an increased momentum also going forward. And we feel that's not just brand heat, but it's also a factor of the fact that we learned to merchandise apparel in our own channels, like in retail and also digital, which leads then to, for example, in Paris, in our new Paris store, every fourth piece sold is already an apparel piece. That, of course, increases the confidence of our wholesale partner. And as we scale retail, this will happen even more so. And an additional point is that now we're not just touching running, but through the extension of our verticals.

David Allemann: So Marc has already hinted at it.

Speaker Change: Apparel fees.

Mark <unk>: Doubling in preorders our portfolio into 24, so we see an increased momentum also going forward and we feel thats not just brand heat for this also a factor of the fact that we learned to merchandize apparel in our own channels like in retail and also digital which leads them tool for Exxon.

David Allemann: for Fall-Winter 24. So we see an increased momentum also going forward, and we feel that not just brand heat, but it's also a factor of the fact that we

David Allemann: learned to merchandise

David Allemann: , , , ,

David Allemann: digital, which leads them to, for example, Paris, in our new Paris store.

Mark <unk>: In Paris, our new Paris store every force piece sold already being in the apparel piece that of course increases and also the confidence of our wholesale partner and as we scale the retail and this will happen even more so and then an additional point is that now and not just touching running.

David Allemann: Every fourth piece sold is already an apparel piece. That of course increases the confidence of our wholesale partner, and as we scale retail, this will happen even more so, and then an additional point is that now we're not just touching running, but through the extension of our verticals, now for example also training as an apparel first vertical coming into the picture, we of course unlock a lot.

Martin Hoffmann: Net income reached 30.8 million with strength up from 3.3 million with strength in Q2 23. Moving to our balance sheet, capital expenditures were 16.9 million with strength in Q2, equivalent to 3% of net sales, up slightly from 2.5% last year. While achieving significantly more net sales, network in capital at the end of Q2 was at 567.1 million, almost flat compared to the 560.2 million at the end of March, and even lower than the 598.6 million a year ago.

David Allemann: Now, for example, also training as an apparel-first vertical coming into the picture, we, of course, unlock a lot more communities for apparel. The same is true, of course, also for tennis, where we've seen incredible success for tennis. So expect a lot of launches as well in Q3, where you also see exciting innovations. I'll just give you one example.

Mark <unk>: Through the extension of our verticals now for example, also training as an apparel first vertical coming into the picture. We have of course unlock a lot more communities for for apparel. The same is true of course also for tennis, where we've seen incredible success for tenants.

David Allemann: more communities for for apparel. The same is true, of course, also for

David Allemann: For tennis, where we've seen incredible success for tennis. So expect a lot of launches as well in Q3, where you will also see exciting innovations. I'll just give you one example.

Mark <unk>: So expect a lot of launches as well in Q3, where you also see exciting innovations just giving you. One example, we launched our new training gear for high intensity workout for really focused for the gym and be introduced dry tech fabric that actually feels like a constant touch but it has.

David Allemann: We launched all new training gear for high-intensity workouts, so really focused on the gym. And we introduced a dry-tech fabric that actually feels like a cotton touch, but it has the credibility and the feel of a high-performance fabric. And so we bring fabric innovation to apparel as well. So this is all scaling it, but at the same time, I feel it's not just about the sales of apparel, but of course, apparel is also an incredible opportunity for the brand because we're happening to it. All right. Very helpful. Thank you so much.

Speaker Change: And credibility here and there.

Martin Hoffmann: Our inventory position stands at 401.3 million with strength. The flight increase versus the 365.3 million at the end of Q1, but significantly lower than at the end of Q2 last year. While we remain later focused on actively managing our inventory at efficient levels, we are willing to lean in on certain key styles in order to capture the high demand we are observing around the world. As a result of our strong operating cash flow of 102.4 million with strength in the quarter, we have improved our cash position from 584.6 million with strength at the end of Q1, 24, up to 652.4 million with strength at the end of Q2. Over the past 12 months, we achieved an operating cash flow of 412.2 million and has improved our cash position by 315.3 million.

Speaker Change: Our high performance fabric and sell we bring fabric innovation tour apparel as well. So this is all scaling it but at the same time I feel it's not just about the sales of apparel, but of course apparel is also incredible opportunity for the brand because they are happening at the top.

David Allemann: And so we bring fabric innovation to you.

David Allemann: Apparel as well. So this is all scaling it, but at the same time, I feel it's not just about the sales of apparel, but of course, apparel is also an incredible opportunity for the brand because we're going head to toe.

David Allemann: Because we're happening head to toe.

Martin Hoffmann: All right. Very helpful. Thank you so much. Your next question comes from the line of Cristina Fernandez with Tesley Advisory Group. Please go ahead. Hi, good morning and congratulations on the strong demand. I wanted to follow up on the on the constraints you're seeing on the

Speaker Change: Got it very helpful. Thank you so much.

Martin Hoffmann: Your next question comes from the line of Cristina Fernandez with the Tesley Advisory Group. Please go ahead.

Cristina Fernandez: Your next question comes from the line of Cristina Fernandez with the Tesley Advisory Group. Please go ahead. Hi, good morning, and congratulations on the strong demand. I wanted to follow up on the constraints you're seeing in the supply chain. As you look at the second half, I know early in the year you talked about some much stronger DTC growth than wholesale. Should we expect wholesale to be stronger than expected and DTC perhaps not as strong? And then can you talk about the impact it's having on the gross margin? Yes, I'd be happy to do so, Cristina.

Speaker Change: Your next question comes from the line of Cristina Fernandez with <unk> Advisory Group. Please go ahead.

Hi, good morning, and congratulations on the strong demand.

Cristina Fernandez: I wanted to follow up on the on the constraints youre seeing on the supply chain.

Speaker Change: If you look at the second half.

Speaker Change: Early in the year, you had talked about.

Speaker Change: It's much stronger DTC growth and wholesale should we expect wholesale to be stronger than expected and DTC, perhaps not as strong and then can you talk about the impact it's having on the gross margin.

Martin Hoffmann: Instead, I would like to move on to our outlook for the Fulia 2020-24. I'm sure you can see it from our remarks, today. And hopefully also, from what you have been seeing and hearing about on over recent weeks and months. We continue to experience an incredible amount of momentum around the on-brand. From amazing product launches to groundbreaking innovations, from active stories and successes to authentic brand partnerships. The summer has definitely lived up to her expectations and they couldn't be happier with how all of our initiatives came to life.

Martin Hoffmann: Yes, I'd be happy to do so, Cristina.

Cristina Fernandez: Yes, happy to happy to to Cristina.

Martin Hoffmann: We continue to expect that D2C significantly outgrows our wholesale channel despite the impacts that we planned for. And as a result, as I mentioned before, we also expect that our cross-profit margin comes in higher in the second half of the year than in the first half of the year. As I said, we certainly don't run at the optimal level of our D2C business, and we could capture more of the demand that is out there. But still, even with the impact, we will be able to outgrow our wholesale channel with our D2C channel. Your next question comes in line with Aubrey Tianello with BNP Parabas. Please go ahead.

Cristina Fernandez: We continue to expect.

Cristina Fernandez: See significantly outgrown our wholesale channel despite.

Cristina Fernandez: The impacts that we planned in.

Cristina Fernandez: And as a result, I mentioned it before we also expect that.

Cristina Fernandez: Our gross profit margin comes in higher in the second half of the year than in the first half of the year.

Cristina Fernandez: As I said.

Cristina Fernandez: We certainly don't run at the optimal level of our DTC business and we could capture more of the demand that is out there but.

Martin Hoffmann: Seeing all the positive feedback and coverage gives our teams so much energy and inspiration to continue on our journey of friends with innovation, challenging the status quo to deliver the best products and experiences to our fans around the globe. And we are thrilled to see that all the intentions we are generating is leading to increased brand awareness and converting into online and offline traffic. This provides us with a lot of confidence for the continued high demand for the on-brand and our products, even above our expectations.

Martin Hoffmann: But still, given the, even with the impact.

Cristina Fernandez: Still given the.

Martin Hoffmann: Even with the impacts, we will be able to outgrow our wholesale channel with our D to Z channel. Your next question comes from the line of Aubrey Tianello with BNP Paribas. Please go ahead. Hey, thanks for taking the question.

Cristina Fernandez: Even with the impact we will be able to outgrow our wholesale channel with our DTC channel.

Cristina Fernandez: Yeah.

Marc Maurer: Hi Aubrey, so I'm going to give you a bit of a look into history, and David will take you into the future. So I think very excited definitely about apparel. But we still feel, especially on the apparel side, we were not able to capture all the demand from a product availability perspective. I think the confidence that we see with retailers also going to the pre-orders now coming from products that have already launched is very, very high.

Martin Hoffmann: Your next question comes from the line of Aubrey Tianello with BNP Paribas. Please go ahead.

Speaker Change: Your next question comes from the line of operate <unk> with BNP Paribas. Please go ahead.

Aubrey Tianello: Hey, thanks for taking the question. I wanted to ask about new products. We've seen a lot of new products launched over the past year. You called out several of them in your prepared remarks, like Cloud Tilt.

Speaker Change: Hey, Thanks for taking the question.

Speaker Change: I wanted to ask about new products, we have seen a lot of new products launched over the past year, you've called out several of them in the prepared remarks by cloud.

Martin Hoffmann: At the same time, we acknowledge some of the ongoing distribution challenges. To ensure we have the right product at the right place at the right time to fulfill the specific and full demand that is out there. When we build our brand by relying on a certain level of scarcity, we are not fully and consistently delivering to our own high expectations from an operational perspective. That being said, the strong consumer demand, as well as actions taken on our end to mitigate impacts from the warehouse transition, gives us a lot of confidence to reiterate our 2024 constant currency, net sales, growth rate expectation of at least 30%.

Marc Maurer: We'd love to hear which of this year's launches you're most excited about and, among the new launches on the footwear side, could one of these new launches become your 8th franchise that reaches 5% revenue share? Hi Aubrey, so I'm going to give you a bit of a look into history, and David will take you into the future.

Speaker Change: Would love to hear which in this year's launches you're most excited about and among the new launches on the footwear side.

Speaker Change: Should one of these new launches become your eighth franchises that reaches 5% revenue share.

Speaker Change: Alright.

Speaker Change: Hi, everyone. So I'm going to give you a better look into history and David will take you into the future.

Marc Maurer: So I think very excited definitely about apparel, and we still feel, especially on the apparel side, that we were not able to capture all the demand from a product availability perspective. I think the confidence that we see with retailers also going to the pre-orders now coming from products that have already launched is very, very high. So I know we're not talking footwear franchise here, but we just want to reiterate that we're very, very happy with what we're seeing on the apparel side. Then I'm super happy with how Cloud Runner 2 and the overall Cloud Runner franchise have launched.

David: So, yes, I think very excited.

Speaker Change: Definitely about apparel and so we still feel especially on the apparel side, we were not able to capture all the demand from the product availability perspective, I think that the confidence that to be CE with retailers also go into the preorders now coming from the products that have already launched is very very high.

Martin Hoffmann: On a reported basis, at current spot rates and reflecting the most recent strengths of the Swiss franc compared to our most meaningful currencies, including the US dollar, this implies 2.26 billion Swiss francs in net sales. We are further maintaining our cross-profit marching items for the full year at around 60% and continue to expect no trusted EBDA margins for the full year in the range of 16 to 16.5%.

David Allemann: and Jim Latley, probably just say this in a space where it is established...

Marc Maurer: So I know we're not talking footwear franchise here, but we just want to reiterate that we're very, very happy with what we're seeing on the apparel side. Then I'm super happy with how the Cloud Runner 2 and the overall Cloud Runner franchise have launched. It's important to us because it really captures that core run consumer.

David: So I know, we're not talking footwear franchise here, but we just want to reiterate that we're very very happy with what we're seeing on the apparel side then.

David: Super Happy with how the cloud run or two and with that the overall cloud on our franchise is not is launched it is important to us because it really captures that core run consumer. So for example, it already takes are in Germany took 25% off of our sales at fleet feet, which is already very strong. We're also seeing the cloud monster franchise.

Marc Maurer: It's important to us because it really captures that core running consumer. So, for example, it already takes, or in June, it took 25% of our sales at Fleet Feet, which is very, very strong. We're also seeing the Cloud Monster franchise growing almost at a triple-digit rate, and then also the Cloud Surfer, with the launch of the Cloud Surfer Next being able to bring two different price points, is working well. So you see, those are three franchises that are really in the core running segment, which reconfirms the efforts that we're doing with positioning on or continuing to position on as a core performance brand. And then we could have sold way, way, way, way more Cloud Tilt if we had the inventory.

Marc Maurer: So, for example, it already takes, or in June, it took 25% of our sales at Fleet Feet, which is very, very strong. We're also seeing the Cloud Monster franchise growing almost at a triple-digit rate, and then also the Cloud Surfer, with the launch of the Cloud Surfer Next, being able to bring two different price points is working well. So you see, those are three franchises that are really in the core running segment, which reconfirms the efforts that we're doing with positioning on or continuing to position as a core performance brand. And then we could have sold way, way, way, way more Cloud Tilt if we had the inventory.

Martin Hoffmann: An incredible summer is slowly coming to an end. So many highlights in Paris and across the world give us even more energy and motivation to pursue our dreams and plans. In the second half and beyond. As David mentioned, we have and always will be committed to building on for long-term success.

David: Growing almost at the Triple digit rate and then also the cloud circle with the launch of the clouds are for next being able to bring to different price points is working well. So you'll see those are three franchises that are really in the core running segment, which is which reconfirms. The efforts that we're doing with positioning on our continuing to position on.

Martin Hoffmann: Thank you and congratulations to our team for all the amazing moments as we continue to dream on.

David: That is a core performance brand.

David Allemann: With that, David Margindai would like to open up your question.

David: And then we could episodes way way way way more cloud deals if we had the inventory so.

Christa: Operator, we are ready to begin the Q&A session. Thank you. We will now begin the question and answer a session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the Q. And if you'd like to withdraw that question, again, press star one. We do ask that you limit yourself to one question.

Marc Maurer: So the energy that Sendai was able to bring to the product is outstanding, and we're looking forward to bringing more Cloud Tilt to the market. You also saw the collaboration we had with Loewe. Martin mentioned it in his prepared remarks. And so we really feel we were able to create a couple of new franchises that are performing well. And at the same time, for example, Cloud is still the largest franchise.

Marc Maurer: So the energy that Sendai was able to bring to the product is outstanding, and we're looking forward to bringing more Cloud Tilt to the market. You also saw the collaboration we had with Loewe. Martin mentioned it in his prepared remarks. And so we really feel we were able to create a couple of new franchises that are performing well at the same time. For example, The Cloud is still the largest franchise, so we're not forgetting about the things that have been there.

David: At the entity that Sunday.

David: To bring to the product.

Speaker Change: Is outstanding and and we're looking forward and to bring more cloud deals to the market. He also saw the calibration, we had with <unk> and Martin mentioned it in the prepared remarks.

Speaker Change: And so we really feel we were able to create a couple of new franchises that are performing while while at the same time for example, the cloud is still is still the largest franchisee.

Jonathan Komp: Your first question comes from the line of Jonathan Comp. With Baird, please go ahead. Yeah, hi. Good afternoon. Thank you. I want to follow up and just ask a little bit more about some of the constraints in North America.

Marc Maurer: So we're not forgetting about the things that have been there. And so I really see that we're growing an existing product, but also growing a new product is very, very important for us. And David will give you an outlook on what's happening in the second half of the year.

Speaker Change: So no.

Speaker Change: We're not forgetting about the things that have been there and sell it. So we do see that growing in existing products, but also growing a new product is very very important for us.

Marc Maurer: And so I really see that we're growing in existing products, but also growing in new products is very, very important for us. And David will give you an outlook on what's happening in the second half of the year. So just building on what Mark said, the second half of the year, I can promise will be as packed as the first. So, first of all, building on the Cloud Surfer Next that Mark mentioned, we will also double down on the Cloud Surfer franchise by launching Cloud Surfer 2.

Martin Hoffmann: Could you maybe discuss how you're choosing to prioritize some of the new launches and products across channels given the constraints and then how are you thinking about the steps that are needed or the time timeframe that you're looking for to get things fully operational to the standards that you expect them to be? Thank you. Hi John, this is Martin and welcome from my side here as well. So just to put this again into perspective.

Speaker Change: David will give you an outlook into what's happening in the second half here.

David Allemann: So just building on what Marc said, the second half of the year, I can promise will be as packed as the first. So, first of all, building on the CloudSurfer Next that Marc mentioned, we will also double down on the CloudSurfer franchise by launching the CloudSurfer Next.

David: On what Mark said.

David: Second half of the year I can promise will be S pack that's the first.

David: So first of all.

David: Building on the cloud so for next that Mark mentioned, we will also double down on the cloud circle franchise by launching the cloud surfer too so really building renewing the full franchise there.

David Allemann: So really building, renewing the full potential.

David Allemann: So really building, renewing the full franchise there. And secondly, kind of not just building on the commercial relevance, but also very much at the pinnacle, we just launched the Cloud Boom Strike, which is a performance marathon shoe now pouring from the aesthetic of the light spray shoe and flying off the shelf. It's really broadening the halo of the light spray that has already happened. We have just launched Cloud Nova 2. So really, our running sneaker that has become a staple.

David Allemann: And secondly, kind of not just building on the commercial relevance, but also very much at the pinnacle. We just launched the cloud boom strike, which is a performance marathon to now pouring from the server.

Speaker Change #100: Currently kind of not just building on the commercial relevance, but also very much at the Pinnacle <unk> just launched the cloud boom strike Mitch is that performance Marsh Marathon June outpouring from the aesthetic of the lights ratio and flying off the shelf is really broadening the halo of the widespread that already happened.

Martin Hoffmann: So as you know, we are in the process of building a fully automated warehouse in our Atlanta facility. And so as a result, we are temporarily operating out of a space that is simply not optimal. And so as a result, we experience capacity constraints in that warehouse and this then leads into basically unreliable late deliveries, but also inventory shortages. We are able to shift some of that capacity to our very well performing warehouse on the west coast, but only to the extent that we have inventory there.

David Allemann: https://www.youtube.com

Vieira: And Vieira.

Speaker Change #102: We have just launched a cloud Noah too so really our running sneak two that has become a staple but now we're following up then also.

David Allemann: That has become a staple. But now we're following up then also early next year, sorry, now in August with the cloud.

David Allemann: But now we're following up then also early next year, sorry, now in August with the Cloud Nova X. So it's a crossover model that crosses over into training, so similar to how the Nova crosses into running.

Speaker Change #102: Early next year already now in August with the cloud over X. So it's a cross over module that crosses over into training. So similar house noble crosses into running normal X into training. So we are building really with de Novo a full franchise that is for young consumer that also looks for versatility.

David Allemann: X. So, it's a crossover model that carries over into training. So, similar to how the Nova crosses into running, Nova X into training. So, we're building, really, with the Nova, a full franchise that is for a young consumer that also looks for versatility between all day and their school. And then, of course, Marc mentioned it, Cloud 6, that's going to be a biggie then in February next year because it's one of our biggest franchises, which will be all new again and continue as an internal icon of innovation and design.

Martin Hoffmann: And so the impact on our business that we are seeing is both in D2C and wholesale, but it's a bit hard to quantify, but we would expect without those impacts that we would have been able to deliver a self-growth on a global level above our full-year guidance. And we would have seen a stronger D2C share or higher D2C share as we clearly missed opportunities in the D2C channel, while in the wholesale channel, you always have the buffer of in channel inventory, but then also we clearly saw that the wholesale channel was able to capture some of the traffic that initially came to our website because of the constraints that we had.

David Allemann: So we're really building with the Nova, a full franchise that is for a young consumer that also looks for versatility between all day and their sport. And then, of course, Marc mentioned it, the Cloud 6. That's going to be a biggie then in February next year because it's one of our biggest franchises, which will be all new again and continue as an internal icon of innovation and design. I can also reveal that there's going to be a special Cloud Tilt dropping in Q4 that has been conceived together with Zendaya.

Speaker Change #102: Between all day and their support.

Mark <unk>: And then of course, Mark mentioned it the cloud six that's going to be a banking than in February next year, because it's one of our biggest franchises, which will be all new again and continue as an internal aitken of innovation and.

Speaker Change #103: <unk> I can also revealed that there is going to be a special cloud tilt.

David Allemann: that there's gonna be a special cloud tilt dropping in Q4 that has been conceived together with Zendaya, so we're excited about that.

Speaker Change #103: Dropping in Q4 that has been completed to get the recent data. So we're excited about that.

David Allemann: So, we're excited about that.

David Allemann: So we're excited about that. Your next question comes from the line of Michael Binetti with Evercore ISI. Please go ahead.

Speaker Change #103: Okay.

Martin Hoffmann: Your next question comes from the line of Michael Binetti with Evercore ISI; please go ahead.

Speaker Change #103: Your next question comes from the line of Michael Binetti with Evercore ISI. Please go ahead.

Martin Hoffmann: So we already installed a lot of measures, and as a result, we clearly have seen the strongest impact in our D2C business in the first half of Q2. And ever since we have seen a clear re acceleration of the growth rate in D2C, and this also continued into the first weeks of the new quarter. So we are optimistic that we were able to do the measures to lower the impact, but we still expect the impact.

Michael Binetti: Thanks for the help with all the questions here. Let me ask, let me zero in on a question that was maybe asked earlier. A little bit of detail on the previous shape of the guidance for the year. I think you were saying DTC would gain about 200 basis points of revenue share this year, something similar to what it has done in the past. I think that would have put DTC at roughly 30%, mid 30% type growth for the year. So maybe high 30s in the back half.

Martin Hoffmann: Thanks for your help with all the questions here. Let me ask, let me zero in on a question that was maybe asked earlier, a little bit of detail on the previous shape of the guidance for the year. I think you were saying DTC would gain about 200 basis points of revenue share this year, something similar to what it has done in the past. I think that would have put DTC at roughly 30%, mid-30% type growth for the year.

Speaker Change #104: Thanks for help with all the questions here, Let me ask Scott, Let me zero in on a question maybe asked earlier.

Speaker Change #105: A little bit of detail on the previous shape of the guidance for the year I think you were saying DTC.

Scott: Would gain about 200 basis points of <unk>.

Scott: Revenue share this year something similar to what it has done in the past I think that would've put DTC at roughly 30% mid 30% type growth for the year.

Martin Hoffmann: Is that still a good framework for us to think about? Or maybe some help in shaping it, considering the comments that Atlanta will impact DTC more. Maybe how you see the third and fourth quarters as you balance demand and the direct to consumer business improving in the third quarter that you talked about offset by some of the self-help initiatives in Atlanta. Yeah, Michael.

Martin Hoffmann: So maybe, maybe high 30s in the back half. Is that still a good framework for us to think about? Or maybe some help on shaping, considering the comments that Atlanta will impact DTC more, maybe how you see third and fourth quarter as you balance demand and, you know, the direct to consumer business improving in the third quarter that you talked about offset by some of the self-help initiatives in Atlanta.

Speaker Change #107: So maybe maybe high <unk> in the back half is that still a good framework for us to think about or maybe some help on shaping considering the comments that Atlanta will impact DTC more maybe how you see third and fourth.

Martin Hoffmann: And as I said, for us, it's much more about not living up to our high expectations from an operational perspective versus actually losing a few percentage points on the sales numbers. So we will clearly prioritize important franchises. We prioritize our important retail partners. We clearly prioritize our D2C channel, but there are simply limitations by the fact that the inventory is not always at the right place at the right time with the capacities.

Scott: Sure.

Scott: Yes.

Speaker Change #108: As you balance demand in the direct to consumer business, improving third quarter that you talked about offset by some of the self help initiatives in Atlanta.

Martin Hoffmann: Yeah, thanks, Michael. So going a bit back to the big picture, we, our D2C channel is extremely healthy, and we see record visits coming to our...

Mike: Yes, Thanks, Mike.

Speaker Change #108: Michael.

Martin Hoffmann: So going a bit back to the big picture, we, our D2C channel is extremely healthy. And we see record visits coming to our website; we see that all our key D2C metrics, so from new customers, to repeat purchase rates, to average item value, all those things are at historical high levels and basically showcase the strengths of the channel. And we talked about the app and other new elements that clearly put us in a strong position to capture that customer that is shopping online.

Speaker Change #110: So growing a bit back to the sort of big picture.

Speaker Change #110: Our D to C channel.

Speaker Change #110: Extremely healthy and.

Speaker Change #110: We see record visits coming to our website, we seeded all our key <unk> metrics, so from new customers to repeat.

Martin Hoffmann: Important for everyone is that we are well on track to have our automated well live in the first half of next year. And I think in the end, this is where we want to be as this lays the foundation for the years to come. Great, that's very helpful. Thank you.

Martin Hoffmann: On the website, we see all our key D2C metrics, so from new customers to repeat purchase rates to average item value.

Speaker Change #110: Purchased rates to average item value all those things are at historical high levels and basically.

Martin Hoffmann: All those things are at historical high levels, and basically,

Martin Hoffmann: showcase the strengths of the channel, and we talked about the app and other new elements that that clearly put ourselves in a strong position to capture that customer that is shopping online.

Speaker Change #110: Showcase the strength of the channel.

Jim Duffy: Your next question comes from the line of Jim Duffy with Steeple. Please go ahead. Thank you.

Speaker Change #110: <unk> talked about.

Speaker Change #110: And other new elements that clearly put ourselves in a strong position to capture that customer that is shopping online.

Jim Duffy: I wanted to talk about marketing, Q2 and Q3 have been big brand building moments. I think metrics you can share about consumer engagement, specifically I'm curious whether it's in dialogue, led to any shift in demographics. And if there are any trends, you can share around engagement, following the Olympics. Thank you. Hi, Jim, this is David. Welcome. So you mentioned it on had an incredible car quarter with the visibility of the brand very, very high around Sunday, but also around light spray, innovation, orange and present in Paris.

Martin Hoffmann: At the same time, we are then not able to continue.

Martin Hoffmann: At the same time, we are not able to convert all of them at the moment into final sales. The expectation that we will outgrow our wholesale channels, our D2C channels, I just confirmed it. And if you look back in the past, we were able to win and increase the D2C share by one and a half to two percentage points every year.

Speaker Change #111: At the same time, we are they are not able to convert all of them at the moment into into the final sales.

Martin Hoffmann: Convert all of them at the moment into the final sales. The expectation that we will outgrow our wholesale channels, our D2C channels, I just confirmed it.

<unk>.

Speaker Change #111: The expectation that we will outgrow our our wholesale channel with our <unk>.

Martin Hoffmann: And if you look back in the past.

Speaker Change #111: Confirm it.

If you look back in the past we were able to win.

Martin Hoffmann: We were able to win and increase the D2C share by one and a half to two percentage points every year.

Speaker Change #111: <unk> sure.

Martin Hoffmann: And we expect that this journey will continue. And I also shared that we have seen a re-acceleration of our D2C growth basically already in the second half of Q2, but also in the first weeks of Q3. So that means a growth rate above the 30% that we had for the full quarter. And so I think this provides confidence that consumer demand is there and the strength of our D2C channel is there. Thanks for that!

Speaker Change #112: By one and half to two percentage points every year.

Martin Hoffmann: And we expect that this journey will continue. And I also shared that we have seen a re-exit.

Speaker Change #112: We expect that this journey continues.

Jim Duffy: And of course, those are strong presents of our own athletes. So just kind of share one step is that today's air 10 match with Federer was viewed by 15 million, was viewed over 15 million times on Insta, and 7 million times on TikTok. And of course, you also saw that on our brand trackers and then also on the website, basics to our site. So one has clearly been in the conversation of a global audience of millions in the last three months, always this performance innovation at the core and at the same time reaching a popular culture.

Speaker Change #113: I also shared that.

Martin Hoffmann: We have seen a re-acceleration of our D2C growth, basically, in the second half of Q2, but also in the first weeks of Q3. So that means a growth rate above the 30% that we had for the full quarter. And so I think this provides confidence that consumer demand is there and the strength of our D2C channel is there.

Speaker Change #113: We have seen a reacceleration of our D to C growth.

Speaker Change #113: Basically already in the second half of the of Q2, but also in the first weeks of Q3.

Speaker Change #113: So that means.

Speaker Change #113: Our growth rate above the 30% that we had for the full quarter.

Speaker Change #113: And so I think as this provides the confidence that.

Speaker Change #113: The consumer demand is there and the strength of our D to C channel this year.

Martin Hoffmann: And if I could follow up with one, maybe how do you think shareholders will see a return on the investments that you're making and that you've made in the quality of sales initiatives in Europe by exiting some of the non-strategic wholesale doors and some of the limits that you've placed on retailers ordering lifestyle products to drive the strong trends you mentioned earlier in the performance products? We're building on in the very long term and we're continuing to build on as a performance brand so we told you a couple of times we're really focusing on the channels that allow us to reach those consumers that also allow us to tap into a younger consumer segment as well and what we're clearly seeing with the initiatives that we're doing is that we're not just basically kind of re-accelerating our existing consumer base but we're also tapping into new consumer segments and some of these retailers that we're scaling with now are the best partners to do that and you see that reflected in our overall wholesale number we see that in the sellout of the likes of JD and Footlocker as well where our sellout is going much much stronger than for example on hand inventory that we have with them and so this really allows us to tap into that new consumer and this will build up over time so we have we I already mentioned it we see into the pre-order for spring summer 25 and we can see which accounts in which country are basically you know placing what pre-orders and we clearly feel that the messages that we're trying to give to the markets are appreciated by our consumers and so we're very very happy that we took that step we're very very happy that we kind of closed those doors and took probably a bit a short-term hit but it will allow us to be even stronger in the long term and we have absolutely no signs that this strategy is not working. We have time for one more question and that question comes from Alex Stratton with Morgan Stanley. Please go ahead.

Speaker Change #114: Thanks for that and if I could follow up with one maybe how how do you think shareholders will see a return on the investments that you're making in that you've made in the quality of sales initiatives in Europe by exiting some of the non strategic wholesale doors.

Jim Duffy: And Jim, let me probably just say this in a space where established brand historically had a monopoly almost on the headlines of innovation athlete stories and sporting emotion. We firmly placed ourselves to believe not just as a contender, but a leading sportswear brand with a strong point of view. So really dreaming together represented a strong point of you that captured a community spirit of the games.

Speaker Change #115: The limits that you placed on retailers ordering lifestyle product.

Speaker Change #115: To drive the strong trends you mentioned earlier in the performance products.

David Allemann: So this is something that is building for the long term, so we're not just looking, so we feel it's a little bit too early to look back, but we really look forward how this been unfold in the momentum of a product. Thank you, David.

Martin Hoffmann: We're building for the very long term, right, and we're continuing to build as a performance brand. So, as we said a couple of times, we're really focusing on the channels that allow us to reach those consumers, and that also allow us to tap into a younger consumer segment as well. And what we're clearly seeing with the initiatives that we're doing is that we're not just basically kind of re-accelerating our existing consumer base, but we're also tapping into new consumer segments.

Speaker Change #115: Hey.

Speaker Change #116: We're building on it in the very long term items.

Speaker Change #117: To build on as a performance brand.

Speaker Change #117: So we told you is a couple of times, we're really focusing on the channels that allow us to reach those consumers that also allow us to tap into.

John Kernan: Your next question comes from the line of John Kernan with TD Cowan, please go ahead. Let me take my question and congrats on all the success and innovation. Martin, can you talk to the second half? Ebit, adjust the EBITDA margin guidance, it looks like incremental EBITDA dollars are going to start to accelerate on a year over your basis in the back half. What gives you that confidence and obviously gross margin. You've given us a pretty good picture of gross margin and SGNA, but just just curious if there's any dynamics between Q3 and Q4 that we should be aware of.

Speaker Change #117: A younger consumer segment, as well and but they are clearly seeing with initiatives that we're doing is that we're not just basically kind of re accelerating our existing consumer base, but we're also tapping into new consumer segments and some of these retailers stats that we're scaling with now are the best partners to do.

Martin Hoffmann: And some of these retailers that we're scaling with now are the best partners to do that, and you see that reflected in our overall wholesale numbers. We see that in the sellout of the likes of JD and Footlocker as well, where our sellout is going much, much stronger than, for example, the on-hand inventory that we have with them. And so this really allows us to tap into that new consumer, and this will build up over time. I have already mentioned it.

Speaker Change #117: And you'll see that reflected in our overall wholesale number we see that in the sellout of the likes of Fad J D and foot locker as well, but our sellout is growing much much stronger than for example in on hand inventory that we have with them and so this really allows us to tap into that new consumer and this will build up over time.

John Kernan: Yes, our implied guidance for the full year implies a slight re-acceleration in the second half of the year. In general, second half of the year will be of a higher volume and therefore, also basically the cost base will be over compensated by more sales. As we reiterated, we see our cross-profit margin at a very strong 60% for the full year. So slightly stronger cross-profit margin second half of the year than in the first half of the year, of course, significantly driven by the holiday season, which will deliver and is expected to deliver a very D2C heavy force quarter.

Speaker Change #117: We have.

Martin Hoffmann: We can see into the pre-orders for spring and summer 25. We can see which accounts in which country are basically placing what pre-orders. And we clearly feel that the messages that we're trying to give to the markets are appreciated by our consumers. So we're very, very happy that we took that step. We're very, very happy that we kind of closed those doors and took probably a bit of short-term hits, but it will allow us to be even stronger in the long term. And we have absolutely no signs that this strategy is not working.

Speaker Change #117: I already mentioned that we see into the preorder for spring summer 'twenty fives, and we can see which accounts in which country are basically.

Speaker Change #117: <unk> bought preorders.

Speaker Change #117: And we clearly feel that the message is that we're trying to give to the markets are appreciated by our consumers and so so we're very very happy that we took that step. They are very very happy that we kind of closed those stores and took probably a bit of short term hit and.

Speaker Change #117: But it will allow us to be even stronger in the long term and we have absolutely no signs that the strategy is not broken.

Marc Maurer: We have time for one more question, and that question comes from Alex Stratton with Morgan Stanley. Please go ahead. Great. Thanks a lot for fitting me in here. I just wanted to move this.

Marc Maurer: We have time for one more question, and that question comes from Alex Stratton with Morgan Stanley. Please go ahead. Great, thanks all for...

Alex <unk>: And we have time for one more question I'll hand that question comes from Alex <unk> with Morgan Stanley. Please go ahead.

Alex Stratton: Great. Thanks a lot for fitting me in here. I just wanted to move it to the big picture here. There's been a lot of fears around a recent potential U.S. consumer step down. Can you just share what you've observed about the consumer, either in the quarter or quarter to date, and if you've noticed any differences in consumer behavior across the regions that you're exposed to? So, if there are any differences between the U.S., Europe, or Asia, that would be super helpful.

Speaker Change #119: Great. Thanks, a lot perfect man here I just wanted to move it big picture here and there's been a lot of fears around our recent potential you have consumer step down can you just share what you've observed in the consumer either on a quarter on quarter to date and if you've noticed any differences in consumer behavior across the regions that you're experiencing in South Carolina.

Marc Maurer: Thanks a lot. Thank you, Alex. I think Martin mentioned it when it comes to the U.S., for example. So we, I mean, I think we confirmed an already strong guidance, and we wouldn't do that if we didn't have confidence in the consumer. We have seen very positive signs over the last couple of weeks. So actually, what we see happening within our channels, and what we hear from our partners versus what some of the market reaction was is not exactly in line.

John Kernan: Then, as mentioned, we had significant investments on the marketing side in Q2 leading up to all the events that David was just talking about. So we expect in the second half of the year, slightly lower percentage of net sales flowing into marketing and this gives us the confidence that we operate in that range of 16 to 16.5%. All the very important for us is that we don't restrict our investment into the long-term growth of the company by the temporary warehouse disruptions that we see.

Marc Maurer: And this also gives us confidence from the U.S. perspective for the rest of the year. We clearly see that the brand efforts that we're doing in Europe, and again, especially France and also the U.K., are working out. And we can also capture that in our own channels.

Speaker Change #119: Burnt ends between the U S Europe or Asia that would be super helpful. Thanks, a lot.

Marc Maurer: Thank you, Alex. I think Martin mentioned it when it comes to the US, for example. So, I think we confirmed an already strong guidance, and we wouldn't do that if we didn't have confidence in the consumer. We've seen very positive signs over the last couple of weeks. So actually, what we see happening within our channels, and what we hear from our partners versus what some of the market reaction was, is not exactly in line.

Alex <unk>: Thank you Alex.

Alex <unk>: I think Martin mentioned it when it comes to that to the U S. For example, so.

Speaker Change #120: I think we confirmed an already strong guidance and we wouldn't do that if.

Speaker Change #121: If we didn't have confidence in the consumer and we see very positive signs over the last couple of weeks, so actually but what we see happening within our channels, what we hear from our partners versus what some of the market reaction.

John Kernan: So for us, this is always a priority and then as a priority to be in that range of 16 to 16.5% and this is where we feel very comfortable that we can manage the business in the second half. That's helpful. I just want to follow up. It's just on Ameya, and some of the channel dynamics there. I know Q1, Silverstone, wholesale, door closures, Ameya Revenue Skid, accelerate on a slightly easier compare in Q2. How should we think about the door closures in Ameya and wholesale into the back cap of the year, and does that affect any one quarter greater than the other?

Speaker Change #121: It's not exactly in line and this gives US also confidence from the U S perspective for the rest of the year, we clearly see that the brand efforts that we're doing in Europe, again, especially promise or also the UK are working out and we can also capture that in our own channels.

Marc Maurer: And this gives us also confidence from the US perspective for the rest of the year. We clearly see that the brand efforts that we're doing in Europe, and again, especially France and also the UK, are working out. And we can also capture that in our own channels. We're, for example, very happy with the partnership that we've launched with Zalando and how we're tapping into their consumers and then, you know, going to Asia and Japan, growing very, very strongly.

Marc Maurer: We're, for example, very happy with the partnership that we've launched with Zalando and how we're tapping into their consumers. And then, you know, going to Asia and Japan, and growing very, very strongly. There is clearly some uncertainty around, you know, the kind of currency and what it does to tourism. We have a lot of inbound tourism into Japan and some sales coming from that. But we are aware of that, and we're factoring some of those constraints in, and we're seeing, then, going to China, that we can capture the demand that is there with the stores that we're opening. So we really feel quite positive going into Q3 and Q4. And, you know, given the last couple of weeks, we have no concerns around that immediate future.

Speaker Change #121: For example, we're very happy with the partnership that we've launched if sell endo and how we're tapping into their consumers.

Speaker Change #121: And then going to Asia, and Japan growing very very strongly there is there is clearly some uncertainty around.

Marc Maurer: Yes, this is Marc speaking.

Marc Maurer: There is clearly some uncertainty around the kind of currency and what it does to tourism. We have a lot of inbound tourism into Japan and some sales coming from that. But we are aware of that, and we're factoring some of those constraints in. And we're seeing then, going to China, that we can capture the demand that is there with the stores that we're opening. So we really feel quite positive going into Q3 and Q4. And, you know, given the last couple of weeks, we have no concerns around that immediate future.

Marc Maurer: Hello, everyone. So indeed, I think I'm very happy with very strong return to much, much stronger growth in Ameya, 22.2% and constant currency. And some of the key markets like Germany and Austria deliver positive growth to that. And so we see the UK accelerating, we see France, for example, really property from the Olympics, but also from the store opening that we had, from the brand built that we're doing. And so when it comes to the closures, a lot of that impact is more or less over now.

Speaker Change #122: Kind of a currency and wanted us to tourism, we have a lot of it.

Speaker Change #122: In bound tourism into Japan, and some sales coming from that but we are aware of that and and the factoring some of those constraints in and we're seeing then going to China that we can capture the demand that is there with the stores that we're opening so we really feel quite positive going into Q3, and Q4 and given the last couple.

Speaker Change #122: Of weeks, we have no concerns around that immediate future.

Marc Maurer: Thanks a lot. Good luck. And, ladies and gentlemen, this concludes today's conference call. Thank you for your participation.

Speaker Change #123: Thanks, a lot good luck.

Unknown Executive: And ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.

Speaker Change #124: And ladies and gentlemen. This concludes today's conference call. Thank you for your participation and you may now disconnect.

Marc Maurer: So we feel we have a way more kind of stabilized perspective on how we can look at Ameya for Q3 and Q4 as well. And that's also built in the guidance. On an overall store growth, we historically we've been growing the store base by roughly 10% year over year. We're more looking at 5% right now. And this really very much comes from that we feel will very well on track when it comes to existing store, a new store growth in all key markets. And we're super happy where we stand with our partners when it comes to basically executing on on the guidance that we gave you.

Speaker Change #124: [music].

Marc Maurer: Excellent, thank you.

Jay Sole: Your next question comes from the line of J Seoul with UBS, please go ahead. Great, thank you so much to park question. I'm first you talked a lot about lights break. You give some idea of what's the plan for that product. I mean, it's going to be just something for elite athletes or is that something that you know the mass market will have access and opportunity to buy. And then secondly, it sounded like the apparel initiatives you're on sizing and some of the things you've been working on over the last couple quarters and years have been done well and you're seeing some positive signs there.

Jay Sole: You just talk about big picture how you're feeling about apparel today versus 90 days ago as you see it on track to be coming, you know, you know, higher percentage of total sales. And if you can give us an idea about that, that would be helpful. Thank you.

Martin Hoffmann: Let me take the light spray question then hand over to David who will take the apparel question, by the way, which we also see reflected in the pre-order growth. So so a lot of positive signs really for for second half year, but also for 25 and on the apparel side. So I think please think of light spray in three dimensions. I think first it's it's really a manufacturing revolution. So we're very much moving from an apex let production model to more a capex model and this allows us to, you know, basically manufacture shoes way closer to the consumer.

Martin Hoffmann: So think about near showing and with way less parts. So this is the first step and so we have our first station right now. And the goal is very clear that we can expand that significantly. Then secondly, it is it is very much an upper technology that we were able to launch on the peak performance side. We were able to create a new look and that has triggered lots of interest beyond our athletes.

Martin Hoffmann: And it is very clearly our goal that we're able to bring this look and design and this feel and to the mass market and not limited just to the top athletes. And then thirdly, we're very proud that it allows us to take huge steps and sustainability. So this the opera has 75% less CO2 emissions than a traditional opera and and obviously, you know, being able to manufacture closer to the consumer with less pieces.

Martin Hoffmann: It allows us to be much, much closer and to where to demand this. So also optimize from a supply versus demand perspective. And we feel these things taken together and give us a lot of hope that light spray bill allow us to really change some of the things that we're doing. But we're at very, very beginning of the process. So please don't think in like a six months perspective here and think about this in a very much long term perspective.

Martin Hoffmann: And we're looking forward to bring the product to more consumers and in Q4. And so we have a very clear plan, but sometimes it's nice to keep some surprises for our fans and we would love to keep this surprise. And you'll see it when the robot will be basically placed somewhere else across the globe and when, you know, our fans will be able to have access to the product.

David Allemann: So, Jay, kind of, David, just coming to a peril, you've seen the 63% grows into two for a peril, which is incredible. Of course, that's a result of an incredible brand, he's that we already talked about, and people are now also looking to dress head to toe in an Indian brand. And that's leading actually to even an increased momentum. So, Marc already hinted to it, a peril sees doubling in pre-orders for four winter 24.

David Allemann: So, we see an increased momentum also going forward. And we feel that's not just branded, but it's also a factor of the fact that we learned to merchandise a peril in our own channels, like in retail and also digital, which leads them to, for example, in Paris, in our new Paris store, every four-piece sold already being an apparel, please, that of course increases than also the confidence of our wholesale partner. And as we scale retail, and this will happen even more so.

David Allemann: And then an additional point is that now we're not just touching running, but through the extension of our verticals. Now, for example, also training as an apparel first vertical coming into the picture, we of course unlock a lot more communities for apparel. The same is true, of course, also for tennis, where we've seen incredible success for tennis gear. So, expect a lot of launches as well in Q3, very also see exciting innovations or just giving you one example.

David Allemann: We launch our new training gear for high-intensity verticals, so really focused for the gym. And we introduced a dry-tech fabric that actually feels like a cotton touch, but it has the credibility and the feel of a high-performance fabric. And so we bring fabric innovation to a peril as well. So this is all scaling it, but at the same time, I feel it's not just about the sales of a peril, but of course, peril is also an incredible opportunity for the brand because we're happening at the top. Very helpful.

David Allemann: Thank you so much.

Cristina Fernandez: Here next question comes from the line of Christina Fernandez with Tess Lee Advisory Group. Please go ahead. Hi, good morning and congratulations on the strong demand. I wanted to follow up on the constraints you're seeing on the supply chain. As you look at the second half, you know, early in the year, you had talked about, you know, very, you know, much stronger DTC growth than wholesale. Should we expect, you know, wholesale to be stronger than expected in DTC perhaps not as strong.

Cristina Fernandez: And then can you talk about the impact it's having on the gross margin? Yes, happy to do so, Christina. We continue to expect that DTC significantly outcros our wholesale channel, despite the impacts that we planned in. And as a result, I mentioned it before, we also expect that our cross profit margin comes in higher in the in the second half of the year than in the first half of the year. As I said there, we certainly don't run at the optimal level of our DTC business and we could capture more of the demand that is out there. But still given the even best impact, we will be able to outgrow our wholesale channel with our DTC.

Cristina Fernandez: You are next.

Aubrey Tianello: Question comes in line of Aubrey Tianello with BNP Parabas. Please go ahead. Hey, thanks for taking the question. I wanted to ask about new products. We've seen a lot of new products launched over the past year. You called out several of them in the prepared marks like Cloud Tilt. We'd love to hear which of this year's launches you're most excited about. And among the new launches on the footwear side, could one of these new launches become your eighth franchises that reaches 5% revenue share?

Marc Maurer: Hi, I'm going to give you a bit of a look into history and David will take you into the future. So I think very excited. Definitely about apparel. And so we still feel especially on the apparel side, we were not able to capture all the demand from a product availability perspective. I think the confidence that we see with retailers also going into the pre-orders now coming from the products that have already launched is very, very high.

Marc Maurer: So I know we're not talking about their franchise here, but we just want to reiterate that they're very, very happy with what we're seeing on the apparel side. I'm super happy with how the cloud runner two and with that, the overall cloud runner franchise has launched. It's important to us because it really captures that core run consumer. So for example, it already takes or in June, it took 25% of our sales at Fleet feet, which is very, very strong.

Marc Maurer: We're also seeing the cloud monster franchise growing almost at the triple digit rate and then also the cloud server with the launch of the cloud server. For next, being able to bring two different price points is working well. So you see those are three franchises that are really in the core running segment, which is which reconfirms the efforts that we're doing with positioning on or continuing to position on as a core performance brand.

Marc Maurer: And then we could have sold way, way, way, way more cloud tilt if we had the inventory. So the energy that Sunday was able to bring to the product is outstanding and we're looking forward and to bring more and cloud deals to the market. You also saw the collaboration we had with Louis Martin mentioned it in the prepared remarks. And so we really feel we were able to create a couple of new franchises that are performing while well at the same time.

Marc Maurer: For example, the cloud is still the largest franchise. So we're not forgetting about the things that have been there. And so we really see that we're growing in existing products, but also growing in new products is very, very important for us.

David Allemann: David will give you an outlook into what's happening in the second half of the year. We will also double down on the cloud server franchise by launching the cloud server to so really building renewing the full franchise there. And secondly, kind of not just building on the commercial relevance, but also very much at the pinnacle. We're just launched a cloud boom strike, which is a performance marriage. I'm sure now pouring from the aesthetic of the light pressure and flying off the shelves is really broadening the halo of the light spray that already happened.

David Allemann: And we're and we're have just launched a cloud Nova 2. So really our running sneaker that has become a staple, but now we're following up and also early next year, sorry now in August with the cloud Nova X. So it's a crossover model that crosses over into training. So similar how the Nova crosses into running Nova X into training. So we're building really with the Nova a full franchise that is for a young consumer that also looks for versatility between all day and their sport.

David Allemann: And then of course Mark mentioned it the clouds six that's going to be a biggie then in February next year, because it's one of our biggest franchises, which will be all new again and continue as an internal icon of innovation and design. I can also reveal that there's going to be a special cloud tilt and dropping into four that has been conceived together with Sunday, so we're excited about that.

Michael Binetti: You are next question comes from the line of Michael Binetti with Evercore ISI. Please go ahead. Thanks for help with all the questions here.

Michael Binetti: Let me ask a, let me zero in on a question of maybe I was a little bit of detail in the previous shape of the guidance for the year. I think you were saying, you know, D to C would, would gain about 200 basis points of revenue share this year. There's something similar to what it's done in the past. I think that would have put D to C roughly 30% mid 30% type growth for the year. So maybe maybe high 30s in the back half.

Martin Hoffmann: Is that still a good framework for us to think about or maybe some help on shaping, considering the comments that Atlanta will impact you to see more. Maybe how you see third and third. As you balance demand and, you know, the direct consumer business improving been third quarter that you talked about offset by some of the self health initiatives in Atlanta. Yeah, thanks Michael.

Martin Hoffmann: So going a bit back to the, to the big picture. We, our D to C channel is extremely healthy and we see record visits coming to our website. We see that all our key D to C metrics. So from new customers to repeat purchase rates to average item value, all those things are at historical high levels and basically showcase the strengths of the channel. And we talked about the app and another new elements that that clearly put ourselves in a strong position to capture that customer that is shopping online.

Martin Hoffmann: At the same time, we are then not able to to convert all of them at the moment into into the final sales. The expectation that we will outgrow our, our, our whole search channels, our D to C channel, not just confirmed it. And if you look back in the past, we were able to win an increase that D to C share by by one and half to two percentage points every year.

Martin Hoffmann: And we expect that this journey continues. And I also shared that we have seen a re acceleration of our D to C growth, basically already in the second half of the of Q2, but also in the first weeks of Q3. So that means a growth rate above the 30% that we had for the full quarter. And so I think this, this provides the confidence that the consumer demand is there and the strengths of our D to C channel this down.

Martin Hoffmann: Thanks for that.

David Allemann: And if I could follow up with one, maybe how, how, how do you think shareholders will see a return on the investments that you're making and that you've made in the quality of sales initiatives in Europe by exiting some of the non strategic wholesale doors and some of the limits that you've placed on retailers ordering lifestyle product to drive the, the strong trends you mentioned earlier in the performance product. Hey, we're building on in the very long term, right?

David Allemann: And we're continuing to build on as a performance brand. So we told you a couple of times, we're really focusing on the channels that allow us to reach those consumers, that also allow us to tap into a younger consumer segment as well. And what we're clearly seeing with the initiatives that we're doing is that we're not just basically kind of reaccelerating our existing consumer base, but we're also tapping into new consumer segments.

David Allemann: And some of these retailers that we're scaling with now are the best partners to do that. And you see that reflected in our overall wholesale number, we see that in the sellout of the likes of JD and footlocker as well, where our sellout is going much, much stronger than, for example, on-hand inventory that we have with them. And so this really allows us to tap into that new consumer and this will build up over time.

David Allemann: So we have, I already mentioned it, we see into the pre-order force, bring some or 25, we can see which accounts in which country are basically placing what pre-orders. And we clearly feel that the messages that we're trying to give to the markets are appreciated by our consumers. And so we're very, very happy that we took that step, we're very, very happy that we kind of closed those doors and took probably a bit of short-term hits, but it will allow us to be stronger in the long-term, and we have absolutely no signs that this strategy is not working.

Alex Stratton: We have time for one more question, and that question comes from Alex Stratton. With Morgan Stanley, please go ahead. Great, thanks a lot for fitting me in here.

David Allemann: I just wanted to move it big picture here. There's been a lot of fears around a recent potential U.S, consumer step-down. Can you just share what you've observed on the consumer or either in the quarter or quarter to date, and if you've noticed any differences in consumer behavior across the regions that you're exposed to, so if there's any differences between the U.S., Europe, or Asia, that would be super helpful. Thanks a lot.

David Allemann: Thank you, Alex. I think Martin mentioned it when it comes to the U.S., for example. I think we confirmed an already strong guidance, and we wouldn't do that if we didn't have confidence in the consumer. We see very positive signs over the last couple of weeks, so actually what we see happening within our channels, what we hear from our partners versus what some of the market reaction was, is not exactly in line, and this gives us also confidence from the U.S, perspective for the rest of the year.

David Allemann: We clearly see that the brand efforts that we do in Europe, and again, especially from us, are also the UK, are working out. We can also capture that in our own channels, where, for example, very happy with the partnership that we've launched if Zalando, and how we're tapping into their consumers, and then going to Asia and Japan, growing very, very strongly. There is clearly some uncertainty around kind of the currency and what it does to tourism.

David Allemann: We have a lot of inbound tourism into Japan and some sales coming from that, but we are aware of that, and we're factoring some of those constraints in, and we're seeing then going to China that we can capture the demand that is there with the stores that we're opening, so we really feel quite positive, going into Q3 and Q4, and given the last couple of weeks, we have no concerns around that immediate view. Thanks for walking along.

Christa: And ladies and gentlemen, this concludes today's conference call.

Christa: Thank you for your participation and you may now disconnect.

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