Q2 2025 On Holding AG Earnings Call

Speaker #1: Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to On Holding AG Q2 2025 results.

Liv Redlinger: Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to On Holding AG Q2 2025 results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Liv Redlinger, Head of Investor Relations. Please go ahead.

Speaker #1: Online 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 this time, simply press * followed by the number 1 on your telephone keypad.

Speaker #1: If you would like to withdraw your question, press * 1 again. Thank you. I would now like to turn the call over to Liv Redlinger, Head of Investor Relations, please go ahead.

Speaker #3: Good afternoon and good morning to our investor community. Thank you for joining On's Q2 2025 earnings conference call and webcast. With me today on the call are On's Executive Co-Chairman and Co-Founder, David Allemann, and CEO and CFO, Martin Hoffmann.

Liv Redlinger: Good afternoon and good morning to our investor community. Thank you for joining On’s 2025 second quarter earnings conference call and webcast. With me today on the call are On’s Executive Co-Chairman and Co-Founder, David Allemann, and CEO and CFO, Martin Hoffmann. Before we begin, I will briefly remind everyone that today's call will contain forward-looking statements within the meaning of the Federal Securities Laws. 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 annual report on Form 20-S for the 2024 fiscal year filed with the SEC on March 4, 2025, 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 margin.

Speaker #3: Before we begin, I will briefly remind everyone that today's call will contain forward-looking statements, within the meaning of the Federal Securities Laws. 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 #3: Please refer to our annual report on Form 20-F for the 2024 fiscal year, filed with the SEC on the 4th of March, 2025, for a detailed discussion of such risks and uncertainties.

Speaker #3: We will further reference certain non-IFRS financial measures, such as adjusted EBITDA, and adjusted EBITDA margin. These measures are not intended to be considered in isolation, or as a substitute for the financial information presented in accordance with IFRS accounting standards.

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

Speaker #3: Please refer to today's release, for a reconciliation for the most comparable IFRS measures. We will begin with David, followed by Martin, leading through today's prepared remarks.

Speaker #3: After which, we are looking forward to opening the call for a Q&A session. With that, I am very happy to turn the call over to David.

Speaker #4: A very warm welcome to our second quarter 2025 results call. We hope you are having an enjoyable summer. This past quarter, our story of growth continued with incredible momentum.

David Allemann: A very warm welcome to our second quarter 2025 results call. We hope you are having an enjoyable summer. This past quarter, our story of growth continued with incredible momentum. Our results show that what we are building is robust and truly transformative. We grew net sales by 38% on a constant currency basis to a record of 749.2 million Swiss francs, beating our expectations. This wasn't just about growth. It was about our premium positioning, which drove further expansion in our gross profit margin to 61.5% and our adjusted EBITDA margin to 18.2%. What I'm most proud of is that this momentum was broad-based. We saw strength across every region, channel, and product category. This broad-based resilience is the very definition of the athlete spirit in our business, setting the stage for long-term growth. The strong numbers we just reported are a direct reflection of something deeper.

Speaker #4: Our results show that what we are building is robust and truly transformative. We grew net sales by 38% on a constant currency basis, to a record of $749.2 million Swiss francs.

Speaker #4: Beating our expectations. But this wasn't just about growth; it was about our premium positioning, which drove further expansion in our gross profit margin to 61.5% and our adjusted EBITDA margin to 18.2%.

Speaker #4: What I'm most proud of is that this momentum was broad-based. We saw strength across every region, channel, and product category. This broad-based resilience is the very definition of the athlete's spirit in our business.

Speaker #4: Setting the stage for long-term growth. The strong numbers we just reported are a direct reflection of something deeper. Today, I want to talk about one of the core values at On, the athlete's spirit.

David Allemann: Today, I want to talk about one of the core values at On, the athlete spirit. This spirit is all about resilience and balance. It's about waking up ready to train, regardless of whether you won or lost yesterday. It's about playing the long game, not chasing a fast win. We're building resilience everywhere: in our product portfolio and our channel mix, in the strength of our global footprint and fan base, and in our founder-led leadership. It's building our future for years to come. For me, everything starts with the product. What truly excites me is that we're not just creating footwear; we're building iconic franchises. Today, we have nine distinct footwear franchises, each contributing more than 5% to our top line. That kind of balance isn't an accident. It's the result of a years-long focused strategy to build resilience into our portfolio.

Speaker #4: This spirit is all about resilience and balance. It's about waking up ready to trade, regardless of whether you won or lost yesterday. It's about playing the long game, not chasing a fast win.

Speaker #4: We're building resilience everywhere, in our product portfolio and our channel mix. In the strength of our global footprint and fan base, and in our founder-led leadership.

Speaker #4: It's building our future for years to come. For me, everything starts with the product. What truly excites me is that we're not just creating footwear, we're building iconic franchises.

Speaker #4: Today, we have nine distinct footwear franchises, each contributing more than 5% to our top line. That kind of balance isn't an accident. It's the result of a years-long focused strategy to build resilience into our portfolio.

Speaker #4: We're building iconic franchises like the Cloudsurfer and Cloudmonster, and we're also seeing fresh momentum with the newly launched Cloud6. These are product brands in their own right.

David Allemann: We're building iconic franchises like the Cloudsurfer and Cloudmonster, and we're also seeing fresh momentum with the newly launched Cloud 6. These are product brands in their own right. Our apparel business is expanding very fast, and with it, our relevance as a full sportswear brand. We recently previewed our Spring/Summer 2026 collection during Paris Fashion Week and launched new apparel with Zendaya, which will further elevate awareness. What connects footwear and apparel is On's drive in technological innovation and our roots in Swiss engineering and design. This allows us to show up head-to-head, connected with a broader audience, and build a truly resilient portfolio. Our product resilience is about more than just footwear and apparel. It is our commitment to win in multiple sports.

Speaker #4: But our vision goes far beyond footwear. Our apparel business is expanding very fast, and with it, our relevance as a full sportswear brand. We recently previewed our spring-summer 26 collection during Paris Fashion Week, and launched new apparel with Zendaya.

Speaker #4: Which will further elevate awareness. What connects footwear and apparel is On's drive in technological innovation, and our roots in Swiss engineering and design. This allows us to show up, coat to head, connected with a broader audience, and build a truly resilient portfolio.

Speaker #4: But our product resilience is about more than just footwear and apparel. It's our commitment to win in multiple sports. We started in running, but with successfully expanded to trail, outdoor tennis, and training, moving us closer to our vision of being the most premium holistic sportswear brand.

David Allemann: We started in running, but we successfully expanded to trail, outdoor tennis, and training, moving us closer to our vision of being the most premium holistic sportswear brand. For example, fans saw Iga Światek win an incredible Wimbledon final a few weeks ago, and Ben Shelton captured his first Masters 1000 title at the 2025 Canadian Open, climbing to world number six. Now fans can wear the styles of these athletes both on and off the tennis court. They can shine in the training capsule collection we just launched with FKA Twigs. While On is fundamentally a sports brand, the cultural shift towards sport as the new uniform and fashion means we are also a lifestyle brand, unlocking a much larger addressable market. Our hugely successful collaboration with Loewe on the Cloudtilt, which sold out almost entirely within days, retailing at $590, perfectly illustrates this intersection.

Speaker #4: For example, fans saw Iga Światek win an incredible Wimbledon final, a few weeks ago. And Ben Shelton captured his first Masters 1000 title at the 2025 Canadian Open, climbing to world number six.

Speaker #4: And now fans can wear the styles of these athletes, both on and off the tennis court. Or they can shine in the training capsule collection, which just launched with FKA Twigs.

Speaker #4: While On is fundamentally a sports brand, the cultural shift towards sport as the new uniform and fashion means we're also a lifestyle brand. Unlocking a much larger addressable market.

Speaker #4: Our hugely successful collaboration with Löwe on the Cloud tilt, which sold out almost entirely within days, retailing at $590, perfectly illustrates this intersection. The seed for the most premium global multi-sports brand is planted.

David Allemann: The seed for the most premium global multi-sports brand is planted. The result of all this is what we call consumer resilience. What we are seeing is that we are no longer just for early adopters. We are now resonating with a much wider audience, from established runners to the very young. Our brand strength is over-indexing with Gen Z consumers. In the US, we have previously shared that awareness has more than doubled in a single year, making On one of the top-wanted athletic shoe brands among teens. They love the Soft Wins campaign with Elmo for the Cloudsurfer. We are also seeing this broad appeal powered by diverse sports and franchises like the Cloud, which has grown from a running shoe into an everyday essential. For us, it feels like we have reached a tipping point.

Speaker #4: The result of all this is what we call consumer resilience. What we're seeing is that we are no longer just for early adopters. We are now resonating with a much wider audience, from established runners to the very young.

Speaker #4: Our brand strength is over-indexing with Gen Z consumers. In the US, we have previously shared that awareness has more than doubled in a single year, making On one of the top wanted athletic shoe brands among teens.

Speaker #4: They love the Soft Wins campaign with Elma for the Cloudsurfer. We're also seeing this broad appeal powered by diverse sports and franchises, like the Cloud.

Speaker #4: Which has grown from a running shoe into an everyday essential. For us, it feels like we've reached a tipping point. We are converting broad communities who are buying On's premium sports products again, and again.

David Allemann: We are converting broad communities who are buying On’s premium sports products again and again. Our channel strategy is another dimension of resilience and balance. Wholesale remains a vital channel, and we are incredibly successful with over 11,000 stores globally, from the biggest players to local running specialties. At the same time, our direct-to-consumer business, both online and in physical retail, is a key highlight with a particularly strong performance. We now operate 54 On stores worldwide, and these are not just places to transact. They are spatial experiences where product, brand, community, and storytelling come together. With robust productivity growth in existing On retail stores, we are confident to scale On retail to create further balance between On's wholesale and D2C channels. Next up are high-profile openings in Palo Alto, Stockholm, and Seoul. This global footprint has been a priority for us since the very beginning.

Speaker #4: Our channel strategy is another dimension of resilience and balance. Wholesale reminds a vital channel, and we're incredibly successful with over 11,000 doors globally, from the biggest players to local running specialty.

Speaker #4: At the same time, our direct-to-consumer business, both online and in physical retail, is a key highlight with a particularly strong performance. We now operate 54 On stores worldwide, and these aren't just places to transact.

Speaker #4: They are spatial experiences where product, brand, community, and storytelling come together. With robust productivity growth in existing On retail doors, we are confident to scale On retail to create further balance between On's wholesale and D2C channels.

Speaker #4: Next up, our high-profile openings in Palo Alto, Stockholm, and Seoul. This global footprint has been a priority for us since the very beginning. As founders of a young Swiss brand from a small home market, what do you do?

David Allemann: As founders of a young Swiss brand from a small home market, what do you do? We went to Europe in our first year, to the US in our second, and to Asia, to Japan in our third. That global mindset has led to a significant business in the world's most important sports market, the US, where we continue to see strong growth. At the same time, we are seeing rapid demand acceleration in Europe, with France, Italy, and Spain showing lots of untapped potential for On. The continued triple-digit growth in Asia as a whole is nothing short of amazing, including new expansions for our brand into Singapore and Thailand. All of this is leading to a beautifully balanced global portfolio. We are bringing this global mindset to manufacturing and supply, and it's this focus that recently earned us a major recognition.

Speaker #4: We went to Europe in our first year, to the U.S. in our second, and to Asia, specifically Japan, in our third. That global mindset has led to a significant business in the world's most important sports market, the U.S., where we continue to see strong growth.

Speaker #4: At the same time, we are seeing rapid demand acceleration in Europe, with France, Italy, and Spain showing lots of untapped potential for On. And the continued triple-digit growth in Asia as a whole is nothing short of amazing.

Speaker #4: Including new expansions for our brand into Singapore and Thailand. All of this is leading to a beautifully balanced global portfolio. We are bringing this global mindset to manufacturing and supply.

Speaker #4: And it's this focus that recently earned us a major recognition: Fast Company named On one of the world's 50 Most Innovative Companies of 2025, thanks to our widespread technology.

David Allemann: Fast Company named On one of the world's 50 most innovative companies of 2025, thanks to our LightSpray technology. This ultra-light op-res spray is not built in a one-step process, automated by a robotic arm in just three minutes. A few weeks ago, we launched our first LightSpray factory in Zurich with four robotic arms. It's a path to the future of manufacturing: faster, less labor-intensive, in various locations, with a much simpler supply chain that's closer to consumer demand. It's all about the long game and a company that is innovating on product manufacturing beyond the product itself. Our financial profile mirrors our vision to be the most premium global sportswear brand and enables us to build for the long term. Powerful top-line growth and our premium positioning mean we can consistently invest in important multi-year projects, striking a balance between near-term success and long-term growth drivers.

Speaker #4: This ultra-light upper is sprayed, not built, in a one-step process, automated by a robotic arm in just three minutes. A few weeks ago, we launched our first light spray factory in Zurich, with four robotic arms.

Speaker #4: It's a pass to the future of manufacturing: faster, less labor-intensive, in various locations, with a much simpler supply chain that's closer to consumer demand.

Speaker #4: It's all about the long game, and the company that is innovating in product manufacturing—beyond the product itself. Our financial profile mirrors our vision to be the most premium global sportswear brand.

Speaker #4: And enables us to build for the long term. Powerful top-line growth, and our premium positioning means we can consistently invest in important multi-year projects, striking a balance between near-term success and long-term growth drivers.

Speaker #4: Our ambition of constant wins we dedicate significant time and financial investment into projects like light spray, knowing they will only fully unfold over several years, and require consistent focus and patience.

David Allemann: Our ambition means we dedicate significant time and financial investment into projects like LightSpray, knowing they will only fully unfold over several years and require consistent focus and patience. As I noted earlier, it's these long-term commitments that support and strengthen our resilience. It's a virtuous circle. Our leadership philosophy builds a company that is here to stay for a very long time. As a founder-led business, Caspar, Olivier, and myself, with Martin as CEO, operate together with our senior leadership team like athletes in a team sport. We sometimes lose together, and we often win together. We have the bandwidth to play both defense and offense at the same time. We give each other very direct feedback, once in the locker room after the game. Our deep bench of talent is the ultimate source of our resilience.

Speaker #4: As I noted earlier, it's these long-term commitments that support and strengthen our resilience. It's a virtuous circle. Our leadership philosophy builds a company that is here to stay for the very long time.

Speaker #4: As a founder-led business, Caspar Coppetti and I, along with Martin Hoffmann as CEO, operate together with our senior leadership team like athletes in a team sport.

Speaker #4: We sometimes lose together, and we often win together. We have the bandwidth to play both defense and offense at the same time. And we give each other very direct feedback.

Speaker #4: Once in the locker room, after the game, our deep bench of talent is the ultimate source of our resilience. We hire for an exceptional balance, the right mindset, aligned with the five spirits of On, combined with a unique skill set.

David Allemann: We hire for an exceptional balance: the right mindset, aligned with the five spirits of On, combined with a unique skill set. Our diverse team comprises over 100 different nationalities, operates from 15 global locations, and attracts 200,000 job applications a year, all in pursuit of finding exceptional talent. This deep bench of talent and our global structure bring in critical perspectives from around the world to ensure we build a global brand with local sensibility. Our mission, Dream On, speaks to the growth mindset at On. We dream daring dreams that create resilience, balance, and opportunity, now and in the future, because we firmly believe the best days are ahead of On. We could not be more excited that Time Magazine sees it the same way and in tune this year named On one of the 100 most influential companies globally.

Speaker #4: Our diverse team comprises over 100 different nationalities, operates from 15 global locations, and attracts 200,000 job applications a year, all in pursuit of finding exceptional talent.

Speaker #4: This deep bench of talent and our global structure bring in critical perspectives from around the world to ensure we build a global brand with local sensibility.

Speaker #4: Our mission, Dream On, speaks to the growth mindset at On. We dream daring dreams that create resilience, balance, and opportunity. Now and in the future.

Speaker #4: Because we firmly believe the best days are ahead for On. We could not be more excited that Time magazine sees it the same way, and in June this year named On one of the 100 most influential companies globally.

Speaker #4: You just heard me share my excitement for the long game vision of On. But the vision is only as strong as its execution. It's my great pleasure to now hand the baton over to my partner and our CEO, Martin, to walk you through the details of a quarter that proves our vision is becoming a reality.

David Allemann: You just heard me share my excitement for the long game vision of On. The vision is only as strong as its execution. It is my great pleasure to now hand the baton over to my partner and our CEO, Martin, to walk you through the details of a quarter that proves our vision is becoming a reality. Martin, please.

Speaker #4: So, Martin, please.

Speaker #5: Thank you, David, and hello

Martin Hoffmann: Thank you, David, and hello from my side as well. The athlete spirit is the core of our culture, and I am incredibly proud of the passion and unwavering focus our team and partners have shown over the last six months. We are one and a half years into our three-year strategic plan, and we are running far ahead of our expectations. For the next one and a half years, we have more confidence than ever in the impact of our growth pillars on our products, customer experiences, and ultimately our financial results.

Speaker #4: from my side as well. The athlete's spirit is the core of our culture. And I'm incredibly proud of the passion and unwavering focus our team and partners have shown over the last six months.

Speaker #4: We are one and a half years into our three-year strategic plan. And we are running far ahead of our expectations. For the next one and a half years, we have more confidence than ever in the impact of our growth pillars on our products, customer experiences, and ultimately, our financial results.

Speaker #4: And at the same time, this strategic clarity allows us to dream on. To dream even bigger and even further. To lay the foundation to bring our mission and vision to life at an even bigger scale.

Martin Hoffmann: At the same time, this strategic clarity allows us to dream on, to dream even bigger and even further, to lay the foundation to bring our mission and vision to life at an even bigger scale, to invest time and resources to work on new initiatives, products, and exciting projects that will expand our addressable market in the future, as well as our abilities to elevate the premium experience of our customers. The incredible work of our team is evident everywhere. What truly stands out to me is our brand momentum across communities, the power of our distribution, and the rapid growth of our apparel business. Running remains the foundation of our brand, and it is where our credibility is rooted. In recent months, our proprietary brand tracker has shown a significant increase in our connection with runners and our performance credibility.

Speaker #4: To invest time and resources to work on new initiatives, products, and exciting product tracks that will expand our addressable market in the future, as well as our abilities to elevate the premium experience of our customers.

Speaker #4: The incredible work of our team is evident everywhere. But what truly stands out to me is our brand momentum across communities, the power of our distribution, and the rapid growth of our apparel business.

Speaker #4: Running remains the foundation of our brand, and it's where our credibility is rooted. In recent months, our proprietary brand tracker has shown a significant increase in our connection with runners and our performance credibility.

Speaker #4: We also grew overall brand awareness faster than any other brand in our category. This momentum will carry forward with the launch of the Cloudboom Max next week.

Martin Hoffmann: We also grew overall brand awareness faster than any other brand in our category. This momentum will carry forward with the launch of the Cloudboom Max next week. It is our first super shoe built for the everyday runner, and many On team members, including myself, will be wearing it in our fall marathons. This brand heat is spreading. We are seeing great traction in tennis apparel, and the new Cloud Ultra Pro and Cloud Ultra 3 are strengthening our connection with dedicated trail runners. What is truly unique is how we are reinforcing our position at the intersection of sport and lifestyle. Our brand tracker shows we are the only brand growing our connection with both performance and lifestyle simultaneously. This is a rare position to be in that speaks to the strength and versatility of the On brand.

Speaker #4: It's our first super shoe built for the everyday runner. Many On team members, including myself, will be wearing it in our fall marathons.

Speaker #4: This brand heat is spreading. We are seeing great traction in tennis apparel, and the new Cloud Ultra Pro and Cloud Ultra 3 are strengthening our connection with dedicated trail runners.

Speaker #4: What's truly unique is how we are reinforcing our position at the intersection of sport and lifestyle. Our brand tracker shows we are the only brand growing our connection with both.

Speaker #4: Performance and lifestyle simultaneously: a rare position to be in that speaks to the strengths and versatility of the On brand. This is also evident in our outsized growth, with the 18 to 34 year old segment.

Martin Hoffmann: This is also evident in our outsized growth with the 18 to 34-year-old segment. The momentum in our products comes to life through our multi-channel distribution strategy. Over the last few months, I have had the opportunity to spend time with many of our global key account partners. In every conversation, I felt their incredible motivation and commitment to grow the brand together, including in offering elevated, even more premium customer experiences. Nowhere is our commitment to premium experiences more evident than in our retail network. Its exceptional growth, driven by both improvements in productivity as well as space expansion, demonstrates the strength and resonance of this position. Three weeks ago, I had the pleasure of joining the opening of our first retail store in Singapore, a large and beautifully designed store at the Chuo Changi Airport Mall.

Speaker #4: The momentum in our products comes to life through our multi-channel distribution strategy. Over the last few months, I've had the opportunity to spend time with many of our global key account partners.

Speaker #4: In every conversation, I felt the incredible motivation and commitment to grow the brand together. Including in offering elevated, even more premium customer experiences. Nowhere is our commitment to premium experiences more evident than in our retail network.

Speaker #4: And it's exceptional growth, driven by both improvements in productivity as well as space expansion. Demonstrates the strengths and resonance of this position. Three weeks ago, I had the pleasure of joining the opening of our first retail store in Singapore.

Speaker #4: A large and beautifully designed store at the Chuo Changi Airport Mall delivered close to the highest daily sales across our global retail fleet.

Martin Hoffmann: The store delivered close to the highest daily sales across our global retail fleet during its opening weekend. The largest transformation since our investor day has happened in our apparel business. The passion within our team to build On as a toe-to-head sportswear brand is leaving visible marks across the whole organization. In the first half of this year, we sold more apparel items than one of our most successful footwear franchises, the Cloud Tilt. Our retail momentum and the growing number of dedicated executions are supporting our significant growth in apparel across all our regions, and we remain focused on taking our offer to the next level. Overall, we are building a foundation that is stronger than ever. We achieved close to 1.5 billion Swiss francs in net sales in the first half of 2025, which is a 39% increase year over year on a constant currency basis.

Speaker #4: During its opening weekend. The largest transformation since our investor day has happened in our apparel business. The passion within our team to build On as a toe-to-head sportswear brand is leaving visible marks across the whole organization.

Speaker #4: In the first half of this year, we sold more apparel items, than one of our most successful footwear franchises. The Cloud tilt. Our retail momentum and the growing number of dedicated executions are supporting our significant growth in apparel across all our regions, and we remain focused on taking our offer to the next level.

Speaker #4: Overall, we are building a foundation that is stronger than ever. We achieved close to 1.5 billion Swiss francs in net sales in the first half of 2025.

Speaker #4: Which is a 39% increase year over year on a constant currency basis. In fact, both Q1 and Q2 of 2025 had higher absolute net sales than the entirety of our first year as a public company.

Martin Hoffmann: In fact, both Q1 and Q2 of 2025 had higher absolute net sales than the entirety of our first year as a public company. A reminder of just how far we have come in an incredibly short period of time. As David and I have both said, our team and our culture are the ultimate source of our success and resilience. We are thrilled to have our new Chief Human Resource Officer, Katerina Berg, join us to continue building that culture. With that, let's have a closer look at Q2. It was another record quarter on both net sales and adjusted EBITDA. Net sales reached 749.2 million Swiss francs, up 32% year over year on a reported basis, and 38.2% on a constant currency basis. Our D2C channel delivered another exceptional quarter, demonstrating incredible momentum.

Speaker #4: A reminder of just how far we have come in incredibly short period of time. As David and I have both said, our team and our culture are the ultimate source of our success and resilience.

Speaker #4: We are thrilled to have our new Chief Human Resource Officer, Katharina Berg, join us to continue building that culture. With that, let's have a look at Q2.

Speaker #4: It was another record quarter on both net sales and adjusted EBITDA. Net sales reached CHF 749.2 million, up 32% year over year on a reported basis, and 38.2% on a constant currency basis.

Speaker #4: Our D2C channel delivered another exceptional quarter, demonstrating incredible momentum. Net sales reached 308.3 million Swiss francs, up an outstanding 54.3% year over year at constant currency, and 47.2% on a reported basis.

Martin Hoffmann: Net sales reached 308.3 million Swiss francs, up an outstanding 54.3% year over year at constant currency, and 47.2% on a reported basis. This very strong growth elevated our D2C mix to a new second quarter high of 41.1% of sales. Crucially, this reflects strengths in both e-commerce and retail, which are continuing to work together to boost our global brand awareness and customer engagement. The strength in e-commerce was particularly evident with accelerated growth in both EMEA and the Americas, while our APAC region continued to deliver results that significantly exceeded expectations. In retail, our flagship stores remain key in driving this success. Our Paris Champs-Élysées store continues its strong growth a year after opening, and our LA Abbot-Kinney store saw the highest year-over-year growth in the Americas, powered by strong community engagement.

Speaker #4: This very strong growth elevated our D2C mix to a new second quarter high of 41.1% of sales. Crucially, this reflects strengths in both e-commerce and retail.

Speaker #4: Which are continuing to work together to boost our global brand awareness and customer engagement. The strength in e-commerce was particularly evident with accelerated growth in both EMEA and the Americas.

Speaker #4: While our APEC region continued to deliver results, that significantly exceeded expectations. In retail, our flagship stores remain key in driving this success. Our Paris Champs-Élysées store continues its strong growth a year after opening.

Speaker #4: And our LA and Bikini store saw the highest year-over-year growth in the Americas, powered by strong community engagement. As LA prepares to host the 2028 Olympics, we are strategically increasing our brand exposure to capture the city's rising buzz and excitement.

Martin Hoffmann: As LA prepares to host the 2028 Olympics, we are strategically increasing our brand exposure to capture the city's rising buzz and excitement. Meanwhile, our wholesale channel also saw strong growth in Q2, reflecting the strong demand across all regions while we maintain our focus on a slow and controlled store rollout. Net sales were up 28.8% year over year at constant exchange rates and up 23.1% on a reported basis, reaching 441 million Swiss francs. We continue to build and scale relationships with premium distributor partners in select markets. The store reopened in Singapore, with one of these partners marks a significant milestone, and we are excited to explore new markets in Southeast Asia and in the Middle East through this channel in the coming quarters. Now, let me take you through the development by region, demonstrating our global momentum.

Speaker #4: Meanwhile, our wholesale channel also saw strong growth in Q2, reflecting the strong demand across all regions while we maintain our focus on a slow and controlled door rollout.

Speaker #4: Net sales were up 28.8% year over year at constant exchange rates, and up 23.1% on a reported basis, reaching 441 million Swiss francs. We continue to build and scale relationships with premium distributor partners in select markets.

Speaker #4: The store reopened in Singapore, and one of these partners marked a significant milestone. We are excited to explore new markets in Southeast Asia and in the Middle East through this channel in the coming quarters.

Speaker #4: Now, let me take you through the development by region, demonstrating our global momentum. Starting with EMEA, which delivered a very strong quarter, with net sales growing by an outstanding 46.1% year over year on a constant currency basis.

Martin Hoffmann: Starting with EMEA, which delivered a very strong quarter, with net sales growing by an outstanding 46.1% year over year on a constant currency basis, and by 42.9% on a reported basis to 197.8 million Swiss francs. This is the strongest growth rate we have seen in the region in the past two years, confirming the strategic decisions we took to elevate our brand perception. We're seeing this accelerated growth across both newer markets like France and Italy and established ones, with the UK being a particular highlight, delivering extremely strong growth rates on an increasingly large sales base. Moving on to the Americas, net sales grew strongly by 23.6% on a constant currency basis and by 16.8% on a reported basis to 432.3 million Swiss francs.

Speaker #4: And by 42.9% on a reported basis, to CHF 197.8 million. This is the strongest growth rate we have seen in the region in the past two years.

Speaker #4: Confirming the strategic decisions we took to elevate our brand perception. We're seeing this accelerated growth, across both newer markets like France and Italy, and established ones.

Speaker #4: With the UK being a particular highlight, delivering extremely strong growth rates on an increasingly large sales base. Moving on to the Americas. Net sales grew strongly by 23.6% on a constant currency basis, and by 16.8% on a reported basis, to $472.3 million Swiss francs.

Speaker #4: As a result of the ongoing strong demand for the brand and our significantly improved operational capabilities, our D2C channel materially outperformed in Q2. Selling into our wholesale partners spread a slower base, given the timing of product launches.

Martin Hoffmann: As a result of the ongoing strong demand for the brand and our significantly improved operational capabilities, our D2C channel materially outperformed in Q2. Selling into our wholesale partners grew at a slower pace, given the timing of product launches. But sell-out rates with our key account partners reflected the same strong demand we saw in our D2C channel. Last, but by no means least, the APAC region continues to materially outpace our expectations, delivering the third successive quarter triple-digit growth and now accounting for a mid-teens percentage of our net sales. On a constant currency basis, net sales were up 110.9% year over year in Q2, translating to 101.3% reported growth and absolute net sales of $119.2 million. In all markets, the demand for our products is outpacing supply.

Speaker #4: But sell-out rates with our key account partners reflected the same strong demand we saw in our D2C channel. And last, but absolutely not least, the APEC region continues to materially outpace our expectations, delivering the third successive quarter of triple-digit growth and now accounting for a mid-teens percentage of our net sales.

Speaker #4: On a constant currency basis, net sales were up 110.9% year over year, in Q2. Translating to $101.3% reported growth, and absolute net sales of $119.2 million.

Speaker #4: In all markets, the demand for our products is outpacing supply. In Greater China, net sales more than doubled, driven by more than 50% same-store growth in our own retail stores.

Martin Hoffmann: In Greater China, net sales more than doubled, driven by more than 50% same-store growth in our own retail stores, even higher growth rates in our e-com channels, and the addition of powerful new retail stores. Our flagship store in Chengdu outperforms our expectations on all key retail metrics and will serve as a blueprint for our future retail expansion in this market. Turning to our product categories, our growth is strong and broad-based. Net sales from shoes grew 36% at constant exchange rates. On a reported basis, net sales were up 29.9% year over year, reaching 704.9 million Swiss francs. This growth is a direct result of our ability to build a portfolio of strong franchises. In Q2, we saw strong demand across both our performance and lifestyle portfolios. In performance, running, tennis, and outdoor grew strongly, with the strongest growth in the Cloudsurfer and Cloudmonster.

Speaker #4: Even higher growth rates in our e-com channels, and the addition of powerful new retail stores. Our flagship store in Chengdu, outperforms our expectations on all key retail metrics.

Speaker #4: And will serve as a blueprint for our future retail expansion in this market. Turning to our product categories, our growth is strong and broad-based.

Speaker #4: Net sales from shoes grew 36% at constant exchange rates. On a reported basis, net sales were up 29.9% year over year, reaching $744.9 million Swiss francs.

Speaker #4: This growth is a direct result of our ability to build a portfolio of strong franchises. In Q2, we saw strong demand across both our performance and lifestyle portfolios.

Speaker #4: In performance, running, tennis, and outdoor grew strongly. With the strongest growth in the Cloudsurfer and Cloudmonster. Our key lifestyle franchises, particularly the Cloud tilt and Cloudzone, are resonating deeply with consumers, additionally amplified by our campaigns with Zendaya.

Martin Hoffmann: Our key lifestyle franchises, particularly the Cloud, Cloudtilt, and Cloudzone, are resonating deeply with consumers, additionally amplified by our campaigns with Zendaya. Our apparel business delivered an outstanding quarter, with net sales growing an impressive 75.5% at constant exchange rates and 67.5% on a reported basis to 36.7 million Swiss francs. We are particularly encouraged by the deepening consumer engagement in this category. We are seeing a healthy year-over-year increase in repeat transactions. Importantly, also first and second-time buyers are increasingly adding apparel to their basket. This is a key indicator of our success in building a full sportswear brand and driving apparel adoption earlier in the customer journey. Moving down to P&L, our gross profit margin increased by 160 basis points year over year, to 61.5%, validating again the strength of the premium position of the brand.

Speaker #4: Our apparel business delivered an outstanding quarter, with net sales growing an impressive 75.5% at constant exchange rates and 67.5% on a reported basis, to CHF 36.7 million.

Speaker #4: We're particularly encouraged by the deepening consumer engagement in this category. We are seeing a healthy year-over-year increase in repeat transactions. And importantly, also first and second-time buyers are increasingly adding apparel to their baskets.

Speaker #4: This is an key indicator of our success in building a full sportswear brand, and driving apparel adoption earlier in the customer journey. Moving down the P&L.

Speaker #4: Our gross profit margin increased by 160 basis points year over year, to $61.5%. Validating again the strengths of the premium position of the brand.

Speaker #4: The year-over-year increase was primarily driven by the high D2C share, lower freight expenses, as well as a net foreign exchange tailwind from the further depreciation of the US dollar during the quarter.

Martin Hoffmann: The year-over-year increase was primarily driven by the high D2C share, lower freight expenses, as well as a net foreign exchange tailwind from the further depreciation of the US dollar during the quarter. We implemented selective price increases in the US in early July, so these did not have any effect on our Q2 profitability. SG&A expenses, excluding share-based compensation, were very well controlled, accounting for 47.7% of net sales in Q2, down from 48.6% in the same period last year. We continue to invest heavily in key growth areas, including our stores, LightSpray technology, and strengthening our IT and tech capabilities. At the same time, we saw ongoing benefits from operational efficiencies, particularly in distribution costs, which we now expect to continue throughout the rest of the year.

Speaker #4: We implemented selective price increases in the U.S. in early July, so these did not have any effect on our Q2 profitability. SG&A expenses, excluding share-based compensation, were very well controlled.

Speaker #4: Accounting for 47.7% of net sales in Q2, down from 48.6% in the same period last year. We continue to invest heavily in key growth areas.

Speaker #4: Including our stores, light spray, and strengthening our IT and tech capabilities. At the same time, we saw ongoing benefits from operational efficiencies, particularly in distribution costs.

Speaker #4: Which we now expect to continue throughout the rest of the year. As a result of our very strong top line, gross profit margin expansion, and controlled investments into growth, we are thrilled to report an adjusted EBITDA of CHF 136.1 million.

Martin Hoffmann: As a result of our very strong top line, gross profit margin expansion, and controlled investment into growth, we are thrilled to report an adjusted EBITDA of 136.1 million Swiss francs, translating to an 18.2% adjusted EBITDA margin at 220 basis points year over year. While our very strong operational performance drove substantial adjusted EBITDA growth, the continuous weakness of the US dollar versus Swiss franc in the second quarter, closing near multi-decade lows at 0.79, led to a meaningful unrealized foreign exchange impact in our net financial results, which resulted in a net loss of 40.9 million Swiss francs. As highlighted in the past, this effect is mainly driven by the valuation of our US dollar-based assets, especially cash and cash equivalents at quarter-end exchange rates, and does not impact or reflect the financial health of our business.

Speaker #4: Translating to an 18.2% adjusted EBITDA margin, up $220 basis points year over year. But our very strong operational performance drove substantial adjusted EBITDA growth, to continuous weakness of the US dollar versus Swiss franc in the second quarter, closing near multi-decade lows at $0.79 led to a meaningful, unrealized foreign exchange impact in our net financial results.

Speaker #4: Which resulted in a net loss of 40.9 million Swiss francs. As highlighted in the past, this effect is mainly driven by the valuation of our U.S. dollar-based assets.

Speaker #4: Especially cash and cash equivalents at quarter-end exchange rates. And thus not impact or reflect the financial health of our business. Moving on to our balance sheet.

Martin Hoffmann: Moving on to our balance sheet, capital expenditures were 17.4 million Swiss francs in the quarter. This equates to 2.3% of net sales, down from 3% in Q2 last year. During the last one and a half years, we made significant investments into the strength of our operational backbone and into inventory management. As a result, we continue to see ongoing improvements of our networking capital position, our cash conversion cycle, and the health of our inventory, without limiting our ability to fulfill the strong demand from our customers. Our overall inventory balance stood at 360.4 million Swiss francs at the end of the quarter. We ended the quarter with a cash balance of 846.6 million Swiss francs, down from 871.8 million Swiss francs in the prior quarter.

Speaker #4: Capital expenditures, were $17.4 million Swiss francs in the quarter, this equates to $2.3% of net sales, down from 3% in Q2 last year. During the last one and a half years, we made significant investments into the strengths of our operational backbone, and into inventory management.

Speaker #4: As a result, we continue to see ongoing improvements of our networking capital position. Our cash conversion cycle and the health of our inventory. Without limiting our ability to fulfill the strong demand from our customers.

Speaker #4: Our overall inventory balance stood at $360.4 million Swiss francs at the end of the quarter. We ended the quarter with a cash balance of $846.6 million Swiss francs.

Speaker #4: Down from CHF 807.8 million in the prior quarter. Over 70% of this position was held in U.S. dollars, which was impacted by the aforementioned valuation at quarter-end exchange rates.

Martin Hoffmann: Over 70% of this position was held in US dollar, which was impacted by the before-mentioned valuation at quarter-end exchange rates, leading to this reduction despite the positive operational cash flow. As we enter into the second half of 2025, we do so with exceptional brand momentum, deep confidence in our strategy, and conviction in our ability to perform at the highest level. The results we achieved in the first half are not only ahead of plan; they are a clear reflection of the strength of our brand, the quality of our execution, and the scale of the opportunity ahead. The products we have launched over the past couple of weeks and the pipeline ahead are strong. From performance running to trail, training, tennis, lifestyle, and apparel, we are bringing bold innovation and a lot of brand energy in every vertical and category.

Speaker #4: Leading to this the reduction despite the positive operational cash flow. As we enter into the second half of 2025, we do so with exceptional brand momentum.

Speaker #4: Deep confidence in our strategy and conviction in our ability to perform at the highest level. The results we achieved in the first half are not only ahead of plan; they are a clear reflection of the strengths of our brand.

Speaker #4: The quality of our execution, and the scale of the opportunity ahead. The products we have launched over the past couple of weeks, in the pipeline ahead is strong.

Speaker #4: From performance running to trail, training, tennis, lifestyle, and apparel. We are bringing bold innovation and a lot of brand energy in every vertical and category.

Speaker #4: These launches will be supported by integrated campaigns and high-impact retail moments designed to amplify our presence and drive strong growth across all markets. Over the next couple of weeks, we look forward to exciting light spray activations at the World Athletic Championships in Tokyo.

Martin Hoffmann: These launches will be supported by integrated campaigns and high-impact retail moments designed to amplify our presence and drive strong growth across all markets. Over the next couple of weeks, we look forward to exciting LightSpray technology activations at the World Athletic Championships in Tokyo, building further on our collaborations with Zendaya and FKA Twigs, and taking our training and tennis visibility to the next level. We will continue to drive momentum with the running community and elevate our position at races around the world, powered by our recent launches.

Speaker #4: Building further on our collaborations with Zendaya and FKA Twigs, and taking our training and tennis visibility to the next level. We will continue to drive momentum with the running community and elevate our position at races around the world, powered by our recent launches.

Speaker #4: Considering our strong performance in Q2, continued powerful momentum in the first weeks of Q3, a strong order book for the fall/winter season. And to continue the efficiency tailwinds driven by our focus and commitment to operational excellence.

Martin Hoffmann: Considering our strong performance in Q2, continued powerful momentum in the first weeks of Q3, a strong order book for the fall winter season, and to continue the efficiency tailwinds driven by our focus and commitment to operational excellence, we are increasing our 2025 guidance across all line items, with high expectations for net sales growth, gross profit margin, and adjusted EBITDA margin. We expect net sales at constant currency basis rates to be up at least 31% year over year, ahead of our previous guidance of at least 28%. Importantly, this reflects our strong performance in Q2, as well as our increased second half expectations, given increased confidence in the outlook and the ongoing powerful momentum in Q3. Within this guidance, we still embed prudence to reflect the uncertain macroeconomic outlook in the second half of the year.

Speaker #4: We are increasing our 2025 guidance across all line items. With high expectations for net sales growth, gross profit margin, and adjusted EBITDA margin. We expect net sales at constant currency rates to be up at least 31% year over year.

Speaker #4: Ahead of our previous guidance of up at least 28%. Importantly, this reflects our strong performance in Q2, as well as our increased second half expectations.

Speaker #4: Given increased confidence in the outlook and the ongoing powerful momentum in Q3. Within this guidance, we still embed prudence to reflect the uncertain macroeconomic outlook in the second half of the year.

Speaker #4: Given the ongoing devaluation of the US dollar against the Swiss franc, the second half of the year is expected to face ongoing foreign exchange headwinds.

Martin Hoffmann: Given the ongoing devaluation of the US dollar against the Swiss franc, the second half of the year is expected to face ongoing FX volatility headwinds. At current spot rates, our constant currency growth guidance implies reported net sales reach at least 2.91 billion Swiss francs, higher than our previous guidance of 2.86 billion Swiss francs. Alongside the increased net sales outlook, we now expect a gross profit margin of 60.5% to 61%, ahead of our previous guidance of 60% to 60.5%. The strong momentum in the first half of 2025, the expected continued strength of our D2C channel, combined with a focus on full-price sales, continued operational efficiencies driven by our focus on excellence, favorable freight cost evolutions, and positive foreign exchange rates, are expected to substantiate the gross profit margin 60% plus for the second half of the year, in line with our longer-term gross profit margin target.

Speaker #4: Current spot rates are a constant. Currency growth guidance implies reported net sales reach at least CHF 2.91 billion, higher than our previous guidance of CHF 2.86 billion.

Speaker #4: Alongside the increased net sales outlook, we now expect the gross profit margin of $60.5 to $61%. Ahead of our previous guidance of $60 to $60.5%.

Speaker #4: The strong momentum in the first half of 2025, the expected continued strengths of our D2C channel, combined with a focus on full price sales, continued operational efficiencies, driven by our focus on excellence, favorable freight cost evolutions, and positive foreign exchange rates are expected to substantiate a gross profit margin 60% plus, for the second half of the year.

Speaker #4: In line with our longer-term gross profit margin target. This increased outlook already includes the impact of a 20% incremental tariff on imports, to the US from Vietnam, and a 10% assumed in our previous guidance.

Martin Hoffmann: This increased outlook already includes the impact of a 20% incremental tariff on imports to the US from Vietnam, and the 10% assumed in our previous guidance. As we had outlined in May, we are focused on what we can control and continue to build our company towards our vision to be the most premium global sportswear brand. This means delivering on our brand promise to our fans while ensuring we continuously invest into what differentiates us in the long term: highest quality standards, cutting-edge innovation, premium customer experiences and service, sustainability, and social impact. Our increased outlook on net sales and gross profit margin enables us to accelerate strategic investments in future growth, particularly in marketing, innovation projects, and technology. At the same time, we continue to drive efficiencies across our operating expenses.

Speaker #4: As we outlined in May, we are focused on what we can control and continue to build our company towards our vision to be the most premium global sportswear brand.

Speaker #4: This means delivering on our brand promise to our fans, while ensuring we continuously invest into what differentiates us in the long term. Highest quality standards, cutting-edge innovation, premium customer experiences, and service, sustainability, and social impact.

Speaker #4: Our increased outlook on net sales and gross profit margin enables us to accelerate strategic investments in future growth, particularly in marketing, innovation projects, and technology.

Speaker #4: At the same time, we continue to drive efficiencies across our operating expenses. Reflecting these dynamics, we now expect an adjusted EBITDA margin of $17 to $17.5%.

Martin Hoffmann: Reflecting these dynamics, we now expect an adjusted EBITDA margin of 17% to 17.5%, ahead of our previous guidance of 16.5% to 17.5%. To close, I want to share a personal highlight of this summer and a moment we won't forget anytime soon: watching Iga Światek's historic Wimbledon win. Her performance, a masterclass in focus, consistency, and resilience, was a true reflection of the athlete spirit. With this victory, she now holds Grand Slam titles on all three surfaces, a testament to her versatility and grit. In many ways, her journey embodies the very spirit that also is the driving force for us: relentless focus and courage to push boundaries without compromising our identity, allowing us to compete and win at the highest level. With that, David Allemann and I would like to open up the session to your questions.

Speaker #4: Ahead of our previous guidance of 16.5% to 17.5%, I want to share a personal highlight of the summer and the moment we won't forget anytime soon.

Speaker #4: Watching Ica's Riantex, historic Wimbledon win. Her performance, a masterclass in focus, consistency, and resilience. Was a true reflection of the athlete's spirit. With this victory, she now holds Grand Slam titles on all three surfaces.

Speaker #4: A testament to her versatility and grit. In many ways, her journey embodies the very spirit that also is the driving force for us. Rentless focus, and courage to push boundaries, without compromising our identity.

Speaker #4: Allowing us to compete and win at the highest level. With that, David and I would like to open up the session to your questions.

Speaker #2: At this time, I would like to remind everyone that in order to ask a question, please press star, then the number one on your telephone keypad.

Kate: At this time, I would like to remind everyone, in order to ask a question, please press star then the number 1 on your telephone keypad. We request that you limit yourself to one question and one follow-up. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Jay So with UBS. Your line is open.

Speaker #2: We request that you limit yourself to one question and one follow-up. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Jason, with UBS, your line is open.

Speaker #4: Great, thank you so much. Obviously, really outstanding result today. Just curious, what gives you the confidence to raise your constant currency sales growth guidance for the year, given the potential impact of tariffs in the U.S.? And also, at the same time, what gives you the confidence to raise your adjusted EBITDA margin guidance, given the impact of tariffs?

Jay So: Great. Thank you so much. Obviously, really outstanding results today. Just curious, what gives you the confidence to raise your constant currency sales growth guidance for the year, given the potential impact of tariffs in the U.S.? At the same time, what gives you the confidence to raise your adjusted EBITDA margin guidance, given the impact of tariffs? Thank you so much.

Speaker #4: Thank you so much.

Speaker #5: Hi, Ted, this is Martin. Thanks for the question. I mean, you have seen it in our first half year numbers. The brand has incredible momentum.

Martin Hoffmann: Hi, traders and students. Martin, thanks for the question. You have seen it in our first half-year numbers. The brand has incredible momentum all around the world, very strong growth in all the regions, in all product categories, in all channels. If we look into Q3, we had a very strong start as well. Actually, it is very similar to what we said on the call last time. Again, in July, we had the strongest month in the history of the brand from an absolute numbers perspective. That momentum continues. We have a very strong order book, and at the same time, we are aware of the macroeconomic environment that is there. We want to factor that in. We know that we had a very strong second half of the year last year, which we need to factor in.

Speaker #5: All around the world. Very strong growth in all the regions, in all product categories. In all channels. If you look into Q3, we had a very strong start as well.

Speaker #5: Actually, it's very similar to what we've said on the call last time. Again, in July, we had the strongest months in the history of the brand, from an absolute numbers perspective.

Speaker #5: So that momentum continues. We have a very strong order book. And at the same time, we are aware of the macroeconomic environment that is there.

Speaker #5: We want to factor that in. We know that we had a very strong second half of the year last year, which we need to factor in, so there's a bit of a tougher comparison compared to the first half of the year.

Martin Hoffmann: It is a bit of a tougher comparison compared to the first half of the year. Still, we are very confident in our ability, in our product pipeline, and in the momentum that we are having. I think it is always important to take a step back and then also look at where we want to be from a growth pattern perspective. We want to grow in a durable way. We want to focus on high-quality growth. That growth corridor that we are now going into is basically exactly where we want to be in order to drive healthy growth for the future. We had 33% growth last year, 39% growth in the first half of this year. This reflects the strong momentum. I think if we look at EBITDA and tariffs, here maybe a bit longer answer.

Speaker #5: But still, we are very confident in our ability and in our product pipeline. And in the momentum that we are having. And then I think it's always important to take a step back, and then also look at where we want to be from a growth pattern perspective.

Speaker #5: We want to grow in a durable way. We want to focus on high-quality growth. And so that gross corridor that we are now going into is basically exactly where we want to be in order to drive healthy growth for the future.

Speaker #5: We had 33% growth last year, 39% growth in the first half of this year. And so this reflects the strong momentum. I think if we look at EBITDA and tariffs, although here, maybe a bit longer answer.

Speaker #5: First, I think it's very important to now have clarity. About the new tariffs. And to have that executive order out there. Of course, we're not happy about the additional tariffs, but I think it's super important that this is nothing new for our industry.

Martin Hoffmann: First, I think it is very important to now have clarity about the new tariffs and to have that executive order out there. Of course, we are not happy about the additional tariffs, but I think it is super important that this is nothing new for our industry. Ever since On exists, we have been paying around 20% import duty on the majority of our products imported into the U.S. from our Southeast Asian manufacturing places. Now this number is changing. It is changing to 40% for imports from Vietnam and to 39% from imports from Indonesia. As a premium brand and as a fast-growing brand, we have multiple opportunities to compensate for these impacts of our cost sales. With that, you have seen we are confident in increasing our gross profit margin outlook for the year.

Speaker #5: So ever since On exists we have been paying around 20% in fortuity on the majority of our products, imported into the US from our Southeast Asian manufacturing places.

Speaker #5: And so now this number is changing; it's changing to 40% for imports from Vietnam and to 39% for imports from Indonesia. But as a premium brand and as a fast-growing brand, we have multiple opportunities to compensate for these impacts on our customers.

Speaker #5: And with that, you've seen we are confident in increasing our gross profit margin outlook for the year. And we also confident that we can maintain our gross profit margin in line with the long-term aspiration that we communicated our investor day, which is 60% plus.

Martin Hoffmann: We are also confident that we can maintain our gross profit margin in line with the long-term aspiration that we communicated at our investor day, which is 60% plus. It is really in moments like this where it is super important to be clear what the brand stands for. We want to be the most premium global sportswear brand, which means to deliver on our promise to our fans, to invest into what differentiates us. That is what we continue to do. There will be no compromise, no compromise on innovation, on quality, or on customer experience. Over the last years, we have done so many investments and upscaling of our abilities to drive more gross profit margin, which means innovation products that come at higher price points. It is increasing our D2C mix. It is economies of scale on our product cost. It is supply chain optimizations.

Speaker #5: And it’s really in moments like this where it’s just super important to be clear what the brand stands for. We want to be the most premium global sportswear brand, which means delivering on our promise to our fans.

Speaker #5: To invest into what differentiates us. And that's what we continue to do, and there will be no compromise, no compromise on innovation, on quality, on customer experience.

Speaker #5: But over the last years, we have done so many investments and upscaling of our abilities to drive more gross profit margin. Which means innovation products that come at higher price points, it's increasing our D2C mix, it's economies of scale on our product cost, it's supply chain optimizations.

Speaker #5: We have done price increases as of July 1st in the U.S. And so with that, we are well positioned. We have not yet spoken to our retail partners and our factory partners about mitigation efforts, which is still something we can do, but we have not needed it yet.

Martin Hoffmann: We have done price increases as of July 1st in the U.S. With that, we are well positioned. We have not even yet spoken to our retail partners or our factory partners about mitigation efforts, which is still something we can do, but we have not needed it yet. This gives us the confidence to raise basically all our financial numbers.

Speaker #5: So this gives us the confidence to raise basically all our financial numbers.

Speaker #4: Got it. Super helpful, Martin. Thank you so much.

Jay So: Got it. Super helpful, Martin. Thank you so much.

Speaker #2: Your next question comes from the line of John Kernan with TD Collins, your line is open.

Kate: Your next question comes from the line of John Kernan with TD Collins. Your line is open.

Speaker #6: Welcome.

Speaker #5: Good Good morning, congrats on this tremendous results.

John Kernan: Good morning. Congrats on just tremendous results. Martin Hoffmann, maybe you could talk about the second half, constant currency revenue growth, tremendous 39% growth in the first half. Obviously, with the guidance, you are conservatively planning for a bit of a deceleration. Can you talk to trends you're planning in wholesale and D2C and maybe give a little bit more color regionally in terms of how we should think about the phasing of that revenue growth in the second half?

Speaker #4: Martin, maybe you could talk about the second half constant currency revenue growth, tremendous 39% growth in the first half. Obviously, with the guidance you are conservatively planning for a bit of a deceleration, can you talk to trends you're planning in wholesale and DTC, and maybe give a little bit more color regionally in terms of how we should think about the phasing of that revenue growth in the second half?

Speaker #5: Yeah, very happy to do so. So as I just said, the momentum is very strong, it continues to be very strong. To go into the quarter.

Martin Hoffmann: Yeah, very, very happy to do so. As I just said, the momentum is very strong. It continues to be very strong to go into the quarter. At the same time, we want to grow in a durable way and in a premium way in the long term. This has always been number one strategy for us. This is the growth rate where we want to grow at. The first half of the year was super strong. This actually puts us into a position to be even more meaningful about the additional levers that we are pulling to grow, to be more meaningful with adding additional doors, to be more focused on full-price sales, to really put the focus on high-quality growth. I think this is an amazing position to be in. This is guiding our decision-making and how much additional brand momentum we are driving and how we invest.

Speaker #5: At the same time, we want to grow in a durable way, and in a premium way in the long term. This has always been our number one strategy.

Speaker #5: And this is the growth rate where we want to grow at. And the first half of the year was super strong. And this actually puts us into a position to be even more meaningful about the additional levers that we are pulling to grow.

Speaker #5: To be more meaningful with adding additional doors, to be more focused on full price sales. To really put the focus on high-quality growth, and I think this is an amazing position to be in.

Speaker #5: And this is guiding our decision making, and how much additional brand momentum we are driving, and how we invest, and at the same time, as I said on the call, we can now already focus on what comes after '26, and what are we building for the long term.

Martin Hoffmann: At the same time, as I said on the call, we can now already focus on what comes after 2026 and what are we building for the long term and how can we invest into new things to drive that growth because we have so much confidence into the building blocks that we have at the moment. At the same time, there are amazing products coming. There are many more new, amazing retail stores and great locations coming. So there is a momentum that substantiates the outlook.

Speaker #5: And how can we invest into new things to drive the growth, because we have so much confidence into the building blocks that we have at the moment.

Speaker #5: And at the same time, there are amazing products coming; there are many more new, amazing retail stores in great locations opening. So there's a moment of momentum that substantiates the outlook.

Speaker #4: Got Got it. And then maybe a longer-term question, you're running it well above the targets you put out at the 2023 investor day. You talked long-term about an adjusted EBITDA margin north of 20%.

John Kernan: Got it. Then maybe a longer-term question. You are running well above the targets you put out at the 2023 investor day. You talk long-term about an adjusted EBITDA margin north of 20%. What are the levers for additional margin expansion, given you are already running pretty far above the targets you put out for 2026?

Speaker #4: What are the levers for additional margin expansion, given you're already running pretty far above the targets you put out for 2026?

Speaker #5: Yeah, I think we continue to prove almost with every quarter that we are on the right track, and even ahead of the track to substantiate the targets that we have given.

Martin Hoffmann: Yeah, I just think we continue to prove almost with every quarter that we are on the right track and even ahead of the track to substantiate the targets that we have given. I think we are very transparent where that additional profitability comes from in the future. So we believe there is continued opportunity to increase our gross profit margin with a higher D2C mix. Our own retail stores continue to gain share and will continue to expand in that channel. We see a strong spillover then also into our D2C channel. Our apparel business will be growing, and with that, we will drive higher margin in the future as well, not only because it is a very strong D2C business, but also because we will be benefiting from economies of scale in there. You see that we are driving also economies of scale in our distribution costs.

Speaker #5: And I think we are very transparent where that additional profitability comes from in the future. So we believe there is continued opportunity to increase our gross profit margin.

Speaker #5: With a higher D2C mix, our own retail stores are continuing to gain share, and who will continue to expand in that channel, and we see a strong spillover then also into our D2C channel.

Speaker #5: Our apparel business will be growing, and with that will drive higher margin in the future as well. Not only because it's a very strong D2C business, but also because we will be benefiting from economies of scale in there.

Speaker #5: You see that we are driving also economies of scale in our distribution costs. And at the same time, we want to take a step by step, and so we keep on investing in what is building the brand for the future, we keep on investing in marketing, we keep on investing in exciting projects that build the future, like light spray or many technology projects.

Martin Hoffmann: At the same time, we want to take it step by step. So we keep on investing in what is building the brand for the future. We keep on investing in marketing. We keep on investing in exciting projects that build the future, like LightSpray technology or many technology projects. So we want to grow in a meaningful way towards that 20% number. But I think we have a very clear picture on where that additional profitability will come from in the future.

Speaker #5: And so we want to grow in a meaningful way towards that 20% number. But I think we have a very clear picture on where that additional profitability will come from in the future.

Speaker #4: And if I join, if this is David, if I can expand from here, just kind of zooming out even more, our vision is to build the most premium global sports brand.

John Kernan: If this is David, if I can expand from here, just kind of zooming out even more, our vision is to build the most premium global sports brand. I think if you have been following On for a long time and you have seen us going from footwear to apparel, going from sports also into fashion. You see how kind of we are developing the potential to have a very high margin profile as a business.

Speaker #4: And I think if you've been following on for a long time, and you've seen us going from footwear to apparel, going from sports also into fashion.

Speaker #4: So you see how kind of we're developing the potential to be to have a very high margin profile as a business. Somewhere between a sports brand and a fashion brand.

David Allemann: between a sports brand and a fashion brand. Probably the most extreme vision of that is what we are currently doing with Loewe, at very, very high price points. That is not where we are going in general, but it points to a future where On is playing at the intersection of performance, innovation, and fashion. That increases, of course, the margin profile potential as well.

Speaker #4: Probably the most extreme vision of that is what we're currently doing with Löwe. At very, very high price points, that's not where we're going, in general, but it points to a future where On is playing at the intersection of performance, innovation, and fashion.

Speaker #4: And so that they've increased, of course, the margin profile potential as well.

Speaker #2: Your next question comes from the line of Aubrey Chinellio with BNP Paribas Asset Management. Your line is open.

Kate: Your next question comes from the line of Aubrey Chanelio with BNP Paribas Asset Management. Your line is open.

Martin Hoffmann: Thanks for taking the questions. I wanted to ask on new products and any more color you can give on the impact of launches like the Cloud 6, the Cloudsurfer 2 this year. As we look ahead to next year, how we should be thinking about lapping some of these launches and how you can keep the momentum going into 2026 with new products.

David Allemann: Thank you very much for the question. Yes, happy to talk about product and product in the future. First of all, let me say we are incredibly excited about how we are building franchises. As you heard me say before, we now have nine franchises that deliver more than 5% of top line. That was not always the case. When we had our IPO, it was seven. The Cloudrunner came into us, the eighth, now kind of a lifestyle shoe. The Cloud Tilt kind of became the ninth. We are constantly expanding franchises. Of course, that creates broad-based momentum where we reach very, very different communities. What I am currently most excited about is how we re-energize the Cloudsurfer franchise. You have seen the launch of the new Cloudsurfer 2 with Elmo, but now we also launched the Cloudsurfer Max. We are continuing that momentum in the running space.

David Allemann: The Cloudboom Max will launch in the future, the first super shoe for the everyday runner. There is an incredible momentum in our core space of running. On the other side, we are really kind of growing incredibly in apparel. We do exactly what we want, going from toe to head. The apparel momentum is driving the brand to a much broader audience as well. On a third dimension, we are really also able to build product energy through the new sports that we are doing. If you have seen what is happening in tennis and how our tennis stars are performing on court, that of course builds a lot of momentum for tennis product, but then also beyond tennis, just a lot of awareness for the brand.

Of growing incredibly in a parallel and so we do exactly what we want going from toe to head. And so the apparel momentum is driving the brand um, to a much more broader audience as well. And then, uh, I think on a third dimension, we really also able to build, um, product energy through the new sports that we're doing. So if you've seen what's happening in tennis and how our

Um, tennis stars, um, are performing on court that of Courts builds, a lot of momentum for tennis product, but then also Beyond tennis just a lot of awareness for the brand.

Liv Redlinger: Then maybe just adding for 2026, there's no reason to believe that our level of newness slows down. We are planning to have exciting new launches of the next generation of the Cloudmonster and the Cloudrunner, two very key franchises for us. So then compounding against the launch of the Cloudsurfer this year.

Then maybe just adding for for 26. Um,

there's there's, uh,

no reason to believe that our level of newness slows down. Um, we, we are planning to have exciting new launches of the next generation of the cloud monster and the cloud Runner to very key franchises for us. Um, so then compounding against the the launch of the cloud and the surfer this year.

Kate: Your next question comes from the line of Ann Andria with Piper Sandler. Your line is open.

Your next question.

And then de with Piper Sandler, your line is open.

Liv Redlinger: Great, thank you so much. Good morning and terrific results. Congrats. We wanted to ask about the working capital improvement margin on inventories, really tight at down 10%. How do you feel about the positioning there, especially in the U.S.? Did that constrain sales growth at all during the quarter? Secondly, you mentioned selective growth with wholesale partners a few times. Should we expect similar mid-single-digit growth in wholesale doors globally to continue into next year as well? What are you hearing from your partners as it relates to spring orders, especially here in the U.S.?

Oh, great. Thank you so much. Good morning and, uh, never check results. Congrats.

We wanted to ask, uh, about the working capital Improvement, uh, Martin on inventories, uh, really tight at downtown 10%. How do you feel about the positioning there? Um, especially in the US, uh, did that constraint, uh, sales growth at all, uh, during that quarter and then, secondly, you mentioned, uh, selective growth, uh, with Hotel Partners a few times. Uh, should we expect similar mid single digit growth in Wholesale Doors, uh, globally to continue into next year as well? And what are you hearing from your partners? Um, as it relates to Spring orders?

Uh, especially here in the US.

Liv Redlinger: Starting with working capital, we have done a lot of work and really strengthened our teams and our internal processes to fulfill the customer demand with a lower level of inventory in our warehouses because we significantly improved our capabilities of demand and supply planning. Merchandising is a function that basically didn't exist for a long time. Now we have this as a very strong capability within On. We feel very confident to run our company at a lower working capital level going forward. This is an aspiration that we outlined in the past as well. At the moment, we feel very good about the inventory position. We have seen it in the second quarter that we were able to fulfill the consumer demand all around the world to the level that we also wanted to fulfill it.

Yeah, so starting with um, working capital

we have done a lot of work and, uh, really strengthened our teams and our internal processes to

Um, because we significantly improved our capabilities of demand and supply planning. Um, merchandising is a function that basically didn't exist for a long time. Now, we have this as a very strong capability within On.

Liv Redlinger: As you know, we like to be in a position where demand is a bit above supply. If we look into our wholesale partners and our key account partners, what they are experiencing, especially in the U.S., the momentum for the brand continues to be very strong. I think it's important to basically dive a little bit deeper into the second quarter. The region was growing with 23.6% on a constant currency basis. If you look at our D2C business, this was actually growing at close to 40% in that region. This shows the momentum that we are having. This is also a momentum that many of our key account partners are experiencing. This puts us exactly in the position that we described, that we need less incremental door openings in order to have enough growth to be in the growth corridor where we want to be.

So we feel very confident to run our company at a lower working capital level um going forward. And this is a an aspiration that we that we uh, outline in the past as as well. And uh, so at the moment, we feel very good about the inventory position and we have seen it in in the second quarter that we were able to fulfill the consumer demand all around the world to the level. That we also wanted to fulfill it. Um, as you know, we we like to be in a position where demand is a bit above Supply.

if we, if we look into, um,

our wholesale Partners, um, and and, and our key account Partners, what they are experiencing

Especially in the U.S., the momentum for the brand continues to be very strong. And I think

Um, it's it's it's important to to basically, d d a little bit deeper into into the second quarter. Um, the region was growing with Swiss 23.6% on a constant currency basis. If we look at our d2c business, this was actually growing at close to 40% in that region. And this shows the momentum that we are having and this is all

the momentum that many of our um, key account partners are experiencing

and,

Liv Redlinger: The mid-single-digit number is still the one that we are aiming to. The good thing is we are in full control here. We can really focus on premium same-store growth, but at the same time on a very selective expansion of more doors.

This puts us exactly in the position that we described that we uh need less incremental door openings, in order to to have enough growth to be in the growth Corridor where we want to be. Um, so the the the mid single digit number is is is still the 1 that um that that we are aiming to

and uh, again the the good thing is we were in full control here and we can, um, we can really focus on premium, uh, same stock growth but at the same time on a very selective expansion of of of more doors

Liv Redlinger: Terrific. Thanks so much. Best of luck.

Terrific. Thanks so much. That's the block.

Kate: Your next question comes from the line of Christina Fernandez with Chelsea Advisory Group. Your line is open.

Your next question comes from the line of Cristina. Fernandez with Chelsea Advisory Group your line is open.

David Allemann: Hi, good morning and congratulations on the great result. I wanted to see if you can expand on the gross profit margin outlook for the year. Maybe unpack how much it affects helping the pricing benefits. If you look at tariff mitigation, do you think more price increases are needed or with the one you took in July, you are covered for the foreseeable future?

Hi, good morning, and congratulations on the, on the great result. I wanted to see if you can expand, um, on the gross margin. I look for the year, um, maybe on pack how much is FX helping, um, the pricing benefits in. Um, if you look at, uh, tariff mitigation, um, do you think more price increases are needed or would the 1 you took in July? Um, your your cover for the foreseeable future?

Liv Redlinger: Yeah, thank you. I think I shared this a few times in the past. Our view on the gross profit margin is that we always need to expect that some impacts are on our cost of goods sold. I think over the past five years, we have gone through different impacts from basically too much inventory or not enough inventory to elevated freight costs and now to tariffs. Our focus is to put ourselves in the position to have enough power and enough strength in the brand and in the measures that we are taking to compensate for those effects. This is also how we are looking now at the additional tariffs. As I said, we have done a lot of work to put ourselves in a strong position for exactly moments like the one that we are experiencing now.

Yeah, thank you. Um,

I think I um, I shared this a few times in in in the past. Um our view on the cross profit margin is that we always need to expect that some impacts are on our cost of of of goods, solds. And um I think over the past 5 years, we have gone through different impacts uh from basically, too much inventory or not enough inventory to elevate it, freight costs and and and now to tariffs and

our focus is to put ourselves in the position to

Have enough power and enough, uh, strength in in the brand and in the measures that we are taking to compensate for those effects. And this is also how we are looking now at the additional tariffs. And as I said, we have um, we have done a lot of work to put ourselves in a strong position for exactly moments, like, the 1 that we are experiencing now.

Liv Redlinger: Of course, the price increase that we initiated for July 1st is supporting the gross margin outlook. We feel very confident that we don't need additional price increase to reach the margin targets that we now communicated because we have the ongoing benefits from economies of scale on the production cost side. We have the impact of the foreign exchange rate. This can always change and then other things become more favorable and maybe we see other disruptions in the future. This is why the message that I gave earlier is so important that we feel very confident that we can maintain the gross profit margin on the level where we said we expect it to be in the long term of 60% plus. That factors in basically that there's always something that disrupts that position.

Um,

Of course, the price increase that we that we initiated for for July 1st uh is is supporting the cross margin Outlook. Um we feel very confident that uh we don't need additional price increase to um to reach the margin targets that we that we now communicated.

Because we have the ongoing benefits from economies of scale, um, on the on the, on the production cost side. We have the the impact of the of the of the foreign exchange rate.

But again this this can always change and then other things become more favorable and and and maybe we see we see other disruptions in the future and this is why.

The message that I gave earlier is so important that we feel very confident that we are.

And, and that factors in basically, um, that there's always something that that disrupts that that position.

David Allemann: Thank you for that. As a follow-up, on the apparel, you have seen good acceleration the last two quarters. Can you, as you look at what is driving that, provide any feedback you are getting from customers or your stores? Is it fit? Is it having an D2C, the marketing? What is next for apparel to build on that momentum?

Thank you for that.

Now, as a follow-up on on the apparel, you've seen good acceleration. The last 2 quarters. Can you? If you look at what's driving, that any feedback you're getting from customers or your stores, is it it is it having it in DTC, uh, the marketing and, um, I guess. What's next for apparel to build on that momentum.

David Allemann: Yeah, thank you for the question. We are seeing an incredible energy in apparel. That is driven by wider scale adoption of apparel in addition to footwear. What we are currently seeing is that first and second-time buyers of the brand are very aware of apparel and they are adding apparel to their basket. It is really going from first adopters to a broader audience. That is, of course, fueled by our direct-to-consumer channels. Think retail. Retail, of course, is the classic channel where you build the entirety of an apparel brand, where you get the full look and feel and the full range. That is an extension of that, our e-comm channel. As we are expanding retail, as we are expanding the reach of our e-comm channel, of course, that drives a lot of energy for apparel as well.

Thank you for the question. I mean we're seeing an incredible um, energy in apparel. And that's driven by um, wider scale adoption of Apparel. In addition to Footwear. So what we're currently seeing is that also first and second time buyers of the brand are very aware of apparel. And there I am adding kind of a apparel to their, to their basket. So it's really kind of going from, um, first adopters to a broader audience and that's, of course, fueled by our direct to Consumer channel. So think retail retail of course, is the classic Channel where you build the entirety of an apparel brand, where you get the full look and feel and the full range and at an extension of that our um e-com Channel. And so as we expanding um, retail as we're expanding the reach,

David Allemann: We also selectively work with premium wholesale partners in really showcasing apparel. We, for example, did a pop-up shopping shop in Selfridges. This is driving the overall momentum. Then, of course, we are doubling down on some of the most exciting collections like the one that we have done with FKA Twigs in our training category, the whole lifestyle apparel in collaboration with Zendaya. The awareness of these huge influencers helps apparel as well on the marketing side. Probably last, we invest a lot of innovation into the technicity of apparel. For example, now for winter, Gartek, protecting you against the elements will be an important fabric innovation that continues to roll out. We really drive on all levels.

Out of our e-com channel. Of course, that drives a lot of energy for a parallel as well. And we also selectively work with, um, premium, um, wholesale Partners in really showcasing apparel we, for example, did, uh, a pop-up shop in shop in a self riches. And so, um, this is driving the overall momentum. And then, of course, we're doubling down on some of the most exciting, um, collections like the 1, um, that we have done with FKA tricks in our training category, the whole lifestyle Apparel in collaboration with sa. And so the awareness of these huge influencers helps apparel as well on the, on the marketing side. Um, and probably last, um, we invest a lot of innovation into the technicity of apparel. So, um, for example, now, for Winter Guard, Tech protecting you against the elements will

be an important fabric Innovation that continues to roll out. So we really drive on all levels

Kate: Your next question comes from the line of Michael Benetti with Evercore. Your line is open.

Your next question comes from the line of Michael benetti with evercore. Your line is open.

Martin Hoffmann: Thanks for taking our question and congrats on a nice quarter. Can you just help us think about the cadence of revenues in Q3 and Q4? Then speak to how some of the drivers that you talked to us today about second half On revenues wrap around into the first half of 2026 as we think about the different regions and channels, particularly given the different growth rates across the regions that you guys report in Q2. I will just latch on to the last question about apparel and how we will see that strategy evolve. You mentioned Zendaya and Selfridges. Should we think about that category evolving with performance customers? Or is there a bigger opportunity for this brand to attack some of the big market dollars in the athleisure categories?

Hey thanks guys. Thanks for taking our question. Congrats on a nice quarter. Um, can you can you just help us think about um, the Cadence of revenues in third quarter and fourth quarter and then speak to, you know, how some of the drivers that you talked to us today about second half on revenues wraparound into the first half of 2026 as we think about the different regions and channels, particularly given the, the different growth rates, um, across the regions that you guys reported in the second quarter. And then, I guess I just latch on to the last question about apparel and and I will see that strategy evolved. You know, you mentioned Zandaya and South Bridges. I mean, should we think about that category? How should we think about that category evolving in with performance customers? Or is there is the bigger opportunity for this brand to attack some of the big um Market dollars in the athleisure categories?

Liv Redlinger: Okay, I take the phasing. David will take the apparel question. I mean, we are guiding on the full year. I think what is implied in our guidance for the second half of the year is very much also indicative for where we see the regions and the growth in the regions. As we have said, we have a tougher comparison because at the beginning of the second half of last year, we really significantly improved our operational capabilities. We had a very strong holiday season last year. That picture is very similar for Q3 and Q4. We continue to expect very strong growth in APAC. Also there, we want to grow in a premium way. We will very much control the growth there as well.

Okay, I I take the facing and then uh David will will uh take a take the April question.

I mean, you know, we, um, we are guiding on the, on the full year, and, but I, I think.

What, what is implied in our guidance, for the for the second half of the year, um, is, is is very much also indicative for where we see the regions and and the growth in the regions. Um, as we have said, we, we have a tougher comparison because beginning of of the second half of last year, uh, we really significantly improved our operational capabilities. Uh, we had a very strong, um, holiday season last year. Um, but but that picture is is, is is very similar for, for Q3 and and Q4, um, we continue to expect very strong growth in in, in, in Asia Pacific. Um,

Liv Redlinger: The US is in a very strong position, but this is probably where we apply the strongest lever of caution in our outlook, given the macro environment. Europe basically has a similar picture. So, we expect quite consistent growth rate in the two quarters. This is substantiated by the order book that we have. As said, if the environment remains favorable, as we have seen it in the last two, three months, then there is an opportunity to also outgrow our expectations. At the moment, we want to approach the second half in a very reasonable way.

Also, we want to grow in a premium way. So, we will very much control the growth there as well.

Probably where we applied the, the strongest level of of, of, of caution is also in, in, in our Outlook, given the, the macro environment. And, um, and then, um, yeah. Europe basically is a similar picture. So expected. Uh, quite consistent growth rates in, in, in the 2 quarters.

This is, this is substantiated by the, by the order book that we that we have, um, and, and um, as said if the, if the environment remains favorable, as we have seen it in the in the last 2, 3 months, then uh there's a opportunity to also outgrow our our expectations. But at the moment we want to um approach the second half in a very reasonable way.

David Allemann: So, probably to the second part of your question, currently you see On apparel on the best running athletes. You see them on the highest mountains. You see it on the tennis court, becoming very, very visible in a spectator sport. You see it in the leading gyms. Apparel really comes from core performance, but of course, sports is the new fashion. What we are building from core performance goes out to far more than core sports. You are alluding to that. Of course, we venture out. We venture out, for example, with the capsule that we have done with FKA Twigs, highly technical, but a unique aesthetic. We are building a sports fashion brand as well.

So, I'm probably to the second part of your question. Um, currently you see apparel on the best running athletes, you see them on the highest mountains, you see it on the tennis court, becoming very, very visible in a spectator sport. You see it in the leading gyms. So, apparel really comes from core performance, but of course, sports is the new fashion. And so what we're building from core performance goes out to far more than core sports. And you're alluding to that. Of course, we venture out; we venture out, for example, with the capsule that we have done with FK Twix, highly technical, but with a unique aesthetic.

David Allemann: That, of course, kind of gives apparel a much wider audience. Do not expect us to swim in a sea of sameness. We are going to do it highly elevated as a premium brand and very distinctively.

We're building an, um, we're building a sports fashion brand as well. And so that, of course, kind of gives apparel, um, a much wider audience. Don't expect us to swim in a sea of sameness, we're going to do it. Highly elevated as a premium brand and very distinctively.

Martin Hoffmann: Thanks a lot, guys. Congrats again.

Excellent. Congrats again.

Kate: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Ladies and gentlemen, that concludes today's call, thank you all for joining. You may now disconnect