ON (NYSE:ONON) reported second-quarter 2026 net sales of CHF 850 million, up 21.6% at constant currency and 13.5% on a reported basis, as direct-to-consumer demand outpaced growth in its wholesale business. The Swiss sportswear company also raised its full-year gross-margin outlook while maintaining its adjusted EBITDA-margin forecast.
Founder and Co-CEO David Allemann said the company is prioritizing long-term premium positioning over short-term volume growth, particularly in wholesale channels where it has seen softer sell-through in some everyday running franchises. “We choose not to build in-channel inventory that could compromise our full price integrity,” Allemann said.
Direct-to-Consumer Channel Drives Growth
Direct-to-consumer sales reached CHF 388 million in the second quarter, rising 34.3% at constant currency and 26.0% on a reported basis. The channel accounted for 45.7% of quarterly sales, supported by growth in both e-commerce and physical retail.
CFO Frank Sluis said e-commerce growth exceeded the company’s expectations in every region. On also reported continued strength in its retail fleet, including its Champs-Élysées flagship in Paris, which was its best-performing store globally during the quarter. Its two Tokyo locations continued to perform strongly, Sluis said, with no signs of cannibalization between the stores.
In the Americas, net sales rose 13.0% at constant currency, while EMEA sales increased 20.5% and APAC sales grew 54.7%. Sluis said the Americas result reflected the company’s wholesale actions, while direct-to-consumer momentum accelerated in both North America and Latin America.
EMEA benefited from growth across sub-regions, including France, Spain and Italy. In APAC, Japan, Korea and Greater China all performed well, according to management. The company said its Greater China operations exceeded expectations across channels despite its decision not to participate in promotional activity on Tmall.
Wholesale Discipline and Product Pipeline
Wholesale revenue increased 12.7% at constant currency and 4.8% on a reported basis. Management said the slower growth was concentrated primarily in the Americas, where a promotional multibrand market affected sell-through of certain everyday running products.
Sluis said the company chose to restrain shipments to wholesale partners rather than add inventory to the channel. He said On was satisfied with wholesale sell-through outside the Americas and characterized the U.S. weakness as transitory.
The company pointed to several new and upcoming product releases as part of its effort to support future wholesale growth. These include the CloudX 5 and Cloudrunner Max, which Sluis said had begun the third quarter well, as well as the Cloudsurfer 3, scheduled to begin rolling out to run specialty partners in October before a broader January launch. On also plans to release the Cloudsurfer Max 2 in April and relaunch the Cloudflow franchise.
Management said all of its everyday running franchises are expected to transition to updated foams, technologies and fit engineering within the next 14 months. The company also highlighted its LightSpray footwear technology, which it said is scaling from facilities in Busan and Zurich.
Apparel, Training and Lifestyle Categories Expand
Footwear sales rose 18.9% at constant currency during the quarter, while apparel sales increased 56.2%. Sluis said apparel is increasingly becoming both a growth driver and an entry point for consumers new to the brand.
The company cited growth in performance running collections, its Volt apparel line and its Tennis Court collection. Management said the Zendaya co-created collection significantly exceeded expectations, with every U.S. style outperforming forecasts by triple digits.
On also reported strong growth in newer sports categories. Allemann said training grew 40%, while tennis was the company’s fastest-growing apparel vertical, with sales nearly tripling during the quarter. The Cloudtilt lifestyle franchise grew 190% year over year, and the company said its Cloudpillow models held three of the five top-selling positions at Foot Locker Europe in the prior quarter.
Management said consumers under age 34 now represent more than one-third of On’s customer base. Brand awareness increased to 30%, according to Allemann.
Margins, Cash Position and Outlook
Gross margin reached 65.4% in the second quarter, while adjusted EBITDA margin was 19.8%. Sluis attributed the gross-margin performance to full-price execution, a higher direct-to-consumer mix, operating efficiencies, favorable freight mix and positive foreign-exchange effects. The company said it absorbed higher U.S. import tariffs during the quarter without tariff refunds.
On now expects full-year gross margin of at least 65%, up from its prior outlook of 64.5%, while maintaining its adjusted EBITDA-margin forecast of 19.5% to 20%. Sluis said the higher gross-margin outlook is primarily tied to an anticipated increase in the direct-to-consumer mix. The EBITDA-margin outlook was maintained as the company plans to continue investing in marketing, digital initiatives, retail expansion and future growth.
The company said it expects to recognize some tariff refunds in third-quarter results but has not included potential benefits from those refunds in its margin outlook.
On ended the quarter with more than CHF 1.2 billion in net cash after its cash balance increased CHF 185.2 million. Net working capital improved by CHF 14.9 million from the first quarter, while capital expenditures totaled CHF 28.2 million, primarily for retail expansion and growth infrastructure.
The company plans to host its 2026 Investor Day in Zurich on Sept. 21 and 22.
About ON (NYSE:ONON)
On Holding AG, commonly known as On, is a Swiss performance footwear and apparel company headquartered in Zurich. Founded in 2010, the company designs, develops and sells running shoes, performance apparel and accessories for road, trail and everyday use. On’s product philosophy centers on engineered cushioning and responsiveness intended to serve both serious athletes and lifestyle consumers.
On is best known for its proprietary midsole technology and distinctive sole architecture, marketed under names such as the Cloud family of shoes and related performance lines.
