On Holding, the Swiss sneaker manufacturer backed by Roger Federer, saw its shares rise over 20% in Wednesday's trading following better-than-expected Q3 earnings. The company reported adjusted earnings of 0.43 Swiss francs ($0.54) per share with net sales up 25% year-on-year to 794.4 million Swiss francs ($994.2 million), surpassing the projected CHF 0.28 and CHF 770.4 million.
Following this, On Holding boosted its full-year forecast for the third consecutive quarter. It now predicts annual sales growth of 34% on a constant-currency basis, up from the minimum forecast of 31%. The company's projected gross profit margin has also increased to around 62.5%, up from the previously predicted 60.5% to 61%, with an adjusted EBITDA margin above 18.0%, compared to a prior range of 17.0% to 17.5%.
On's co-founder and executive co-chairman, Caspar Coppetti, announced that the company would not offer Black Friday deals, maintaining full price sales through the holiday season. CEO Martin Hoffmann backed this, noting that On's commitment to premium, full-price sales and innovative designs had significantly resonated with consumers, distinguishing the brand in the market.
Despite ongoing tariffs and the pandemic, On is thriving as a premium brand. The majority of On's footwear production happens in Asia, and import tariffs have hit some of its competitors hard. However, leveraging its premium brand placement, direct-to-consumer avenues, and celebrity collaborations, the company has maintained solid growth. On is extending its footwear and clothing lines, persistently offering new, innovative products at higher price points.
Despite its recent uptick, On Holding's shares are still down over 20% for this year.