ON (NYSE:ONON) Announces Quarterly Earnings Results

ON (NYSE:ONON) issued its quarterly earnings data on Tuesday, August 11th. The company reported $0.35 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.42 by ($0.07), Briefing.com reports. The company had revenue of $1.05 billion during the quarter, compared to analysts’ expectations of $1.09 billion. ON had a net margin of 12.09% and a return on equity of 22.92%. The firm’s quarterly revenue was up 13.5% on a year-over-year basis. During the same quarter last year, the firm posted ($0.09) earnings per share.

Here are the key takeaways from ON’s conference call:

• Q2 net sales rose 21.6% at constant currency to CHF 850 million, led by direct-to-consumer sales, which grew 34.3% and reached 45.7% of total revenue. Growth was broad-based, with particularly strong results in APAC and EMEA.
• Gross margin expanded to 65.4% and adjusted EBITDA margin reached 19.8%, supported by stronger DTC mix, full-price selling, and operating efficiencies. The company raised its full-year gross margin outlook to at least 65% while maintaining its 19.5%-20% adjusted EBITDA margin target.
• Wholesale growth moderated to 12.7% at constant currency, as softer sell-through for everyday running franchises in the promotional Americas market prompted On to reduce sell-in and avoid excess channel inventory. These actions are expected to weigh on Q3 growth, although management characterized the weakness as temporary.
• Management highlighted strong momentum in newer growth engines, including apparel, which grew 56.2% at constant currency, training at 40%, and rapidly expanding tennis and lifestyle franchises. The upcoming product pipeline, including Cloudsurfer 3, new foam technologies, and LightSpray products, is expected to support future full-price demand.
• Full-year constant-currency sales growth guidance was reset to the low 20s, reflecting deliberate wholesale restraint, while management expects continued strong DTC momentum and significant DTC mix expansion in the second half. Inventory rose 31% year over year, primarily due to higher product volumes and foreign-exchange effects.

ON Stock Up 0.3%

Shares of ONON traded up $0.10 during mid-day trading on Friday, reaching $30.30. 4,869,525 shares of the stock traded hands, compared to its average volume of 6,833,786. The firm has a market cap of $19.33 billion, a price-to-earnings ratio of 20.62, a P/E/G ratio of 0.59 and a beta of 2.08. The stock has a fifty day simple moving average of $31.08 and a 200 day simple moving average of $34.73. The company has a quick ratio of 2.25, a current ratio of 2.83 and a debt-to-equity ratio of 0.25. ON has a 12-month low of $26.36 and a 12-month high of $51.08.

Insider Transactions at ON

In other ON news, insider Olivier Bernhard acquired 65,000 shares of the company’s stock in a transaction on Friday, August 14th. The shares were bought at an average cost of $30.67 per share, for a total transaction of $1,993,550.00. Following the acquisition, the insider directly owned 5,228,184 shares of the company’s stock, valued at $160,348,403.28. This trade represents a 1.26% increase in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, CEO Caspar Coppetti purchased 65,000 shares of the firm’s stock in a transaction dated Friday, August 14th. The shares were bought at an average cost of $30.67 per share, with a total value of $1,993,550.00. Following the transaction, the chief executive officer directly owned 2,440,855 shares of the company’s stock, valued at approximately $74,861,022.85. This represents a 2.74% increase in their position. The SEC filing for this purchase provides additional information. Corporate insiders own 68.57% of the company’s stock.

Analyst Ratings Changes

ONON has been the topic of several research reports. Stifel Nicolaus dropped their price objective on shares of ON from $60.00 to $41.00 and set a “buy” rating for the company in a report on Wednesday, August 12th. Piper Sandler reaffirmed an “overweight” rating and set a $45.00 price objective on shares of ON in a research note on Thursday, September 24th. Guggenheim set a $42.00 price target on ON in a research note on Friday, September 11th. Citigroup restated a “buy” rating on shares of ON in a research report on Wednesday, September 23rd. Finally, Sanford C. Bernstein restated an “outperform” rating on shares of ON in a report on Thursday, September 24th. Two analysts have rated the stock with a Strong Buy rating, twenty have given a Buy rating, four have given a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus target price of $43.17.

ON Company Profile

On Holding AG, trading on the New York Stock Exchange under the symbol ONON, is a Swiss sportswear company focused on performance footwear, apparel and accessories. The company serves athletes and active consumers with products designed for running, training, outdoor activities and everyday wear.

On is best known for its running shoes, which incorporate the company’s CloudTec cushioning technology and distinctive sole designs. Its product portfolio also includes athletic clothing, apparel and accessories, with offerings positioned across both performance and lifestyle categories.