On Holding raises full-year outlook, says 'momentum is very strong' ahead of the holidays

On Holding (ONON) stock surged 20% after reporting third-quarter results that significantly exceeded analyst expectations, with EPS of CHF 0.43 and revenue of CHF 794.4 million. The company raised its full-year net sales growth forecast to at least 34% year-over-year, up from a previous 31%, citing strong momentum heading into the holiday quarter and anticipating higher margins. This robust performance, driven by more than doubled sales in Asia-Pacific and 21% growth in the Americas, positions On Holding ahead of its 2026 revenue targets, despite recent declines in the broader footwear market.

Analysis

On Holding (ONON) stock surged 20% following robust Q3 results, significantly exceeding analyst expectations with EPS of CHF 0.43 ($0.54) against a forecast of CHF 0.27 ($0.34), and revenue of CHF 794.4 million ($993 million) surpassing the CHF 767.5 million ($960 million) estimate. The company raised its full-year net sales growth forecast to at least 34% year-over-year, up from a previous 31%, citing strong momentum into the crucial holiday quarter and anticipating higher margins. This revised outlook reflects management's confidence in continued strong performance.

Growth was notably strong in the Asia-Pacific region, where sales more than doubled currency-adjusted, driven by a younger, premium-seeking consumer base. Americas sales also rose 21%, benefiting from expansion into new categories like tennis and training sneakers and broader age group appeal, supported by spokespeople like Zendaya. This performance places On Holding well ahead of its 2026 net sales target of over $4.44 billion, which implied a 26% annual growth rate.

The positive results contrast with a broader footwear market decline, where ONON had fallen 35% year-to-date, alongside rivals Nike (NKE) and Deckers Outdoor (DECK) which saw declines of 16% and 59% respectively. Citi analyst Paul Lejuez previously noted fears of a resurgent Nike impacting On's long-term growth. However, On's current performance suggests resilience and strong brand differentiation despite competitive pressures, potentially mitigating concerns about competitive headwinds in the near term.

Key Decisions for Investors

• Investors should consider the strong fundamental performance and raised guidance as a positive signal for ONON's near-term trajectory, particularly given its outperformance against industry peers.
• Monitor the sustainability of Asia-Pacific growth and the effectiveness of category expansion in the Americas, while also assessing any potential long-term impact from Nike's anticipated turnaround.
• Evaluate current valuations against the company's accelerated growth projections and margin improvements to determine appropriate position sizing.