ON (NYSE:ONON) Releases Earnings Results, Beats Estimates By $0.01 EPS

ON (NYSE:ONON) announced its quarterly earnings results on Tuesday. The company reported $0.43 EPS for the quarter, topping the consensus estimate of $0.42 by $0.01, FiscalAI reports. ON had a net margin of 7.92% and a return on equity of 15.72%. The business had revenue of $1.05 billion for the quarter, compared to analysts’ expectations of $1.09 billion. During the same quarter in the previous year, the company earned ($0.09) EPS. The business’s quarterly revenue was up 13.5% compared to the same quarter last year.

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 Performance

Shares of NYSE:ONON traded up $0.10 during midday trading on Wednesday, hitting $31.01. The stock had a trading volume of 12,791,201 shares, compared to its average volume of 6,050,434. ON has a 1 year low of $30.11 and a 1 year high of $51.08. The company has a current ratio of 2.98, a quick ratio of 2.39 and a debt-to-equity ratio of 0.26. The stock has a 50 day moving average price of $37.17 and a two-hundred day moving average price of $38.81. The company has a market capitalization of $19.79 billion, a PE ratio of 33.34, a P/E/G ratio of 0.71 and a beta of 2.12.

ON News Roundup

Here are the key news stories impacting ON this week:

• Positive Sentiment: Second-quarter earnings slightly exceeded estimates, while revenue increased 13.5% year over year. Gross margin expanded to 65.4%, adjusted EBITDA margin reached 19.8%, and management raised its full-year gross-margin outlook to at least 65%. On Holding Slides After Q2 Sales Missed Expectations Despite Strong Margins
• Positive Sentiment: Direct-to-consumer sales grew 26% and represented 45.7% of revenue, while Asia-Pacific expansion and category growth remain longer-term growth drivers. Several firms, including Stifel, UBS, BTIG, and Telsey, retained positive ratings despite reducing their price targets, indicating analysts still see substantial potential upside. On Holding’s Price Stumble May Be an Opening for a Company Built to Run
• Neutral Sentiment: The stock has attracted both institutional buying and selling, while insider activity has been mixed. These signals may provide some support but do not clearly establish a near-term direction.
• Negative Sentiment: The primary catalyst for the selloff was a quarterly revenue miss. Wholesale sales grew only 4.8% as On deliberately reduced sell-in to protect pricing and brand positioning in a promotional market. Foreign-exchange effects, higher U.S. tariff costs, and cautious consumer spending further pressured reported results. On Shares Fall Sharply After Wholesale Slowdown in Q2
• Negative Sentiment: On Holding’s fiscal 2026 revenue outlook of approximately $4.4 billion to $4.5 billion was around or below the $4.5 billion consensus estimate, reinforcing concerns that sales growth is slowing. Analysts responded by lowering targets: Stifel cut its target to $41, UBS to $73, Telsey to $43, and Baird to $55, although each maintained a positive rating. On Holding Analysts Slash Their Forecasts After Q2 Results

Wall Street Analysts Forecast Growth

A number of equities analysts recently commented on ONON shares. William Blair cut shares of ON from an “outperform” rating to a “market perform” rating in a research note on Tuesday. Weiss Ratings reiterated a “hold (c-)” rating on shares of ON in a research note on Friday. Jefferies Financial Group set a $20.00 price objective on ON in a research note on Tuesday. Telsey Advisory Group decreased their price objective on ON from $51.00 to $43.00 and set an “outperform” rating on the stock in a report on Wednesday. Finally, Raymond James Financial lowered shares of ON from a “strong-buy” rating to an “outperform” rating and lowered their price objective for the company from $52.00 to $38.00 in a research note on Wednesday. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and a consensus target price of $48.57.

Insiders Place Their Bets

In related news, insider Olivier Bernhard purchased 60,000 shares of the stock in a transaction dated Thursday, May 14th. The shares were acquired at an average cost of $36.63 per share, with a total value of $2,197,800.00. Following the purchase, the insider directly owned 5,163,184 shares in the company, valued at $189,127,429.92. This trade represents a 1.18% increase in their position. The acquisition was disclosed in a legal filing with the SEC, which is available through the SEC website. Also, CEO Caspar Felix Coppetti bought 60,000 shares of the company’s stock in a transaction on Thursday, May 14th. The stock was bought at an average cost of $36.64 per share, with a total value of $2,198,400.00. Following the completion of the acquisition, the chief executive officer owned 2,375,855 shares of the company’s stock, valued at $87,051,327.20. This represents a 2.59% increase in their position. The disclosure for this purchase is available in the SEC filing. In the last 90 days, insiders have acquired 180,000 shares of company stock worth $6,594,000.

Institutional Trading of ON

Large investors have recently bought and sold shares of the company. Invesco Ltd. raised its position in ON by 25.0% during the fourth quarter. Invesco Ltd. now owns 196,385 shares of the company’s stock worth $9,128,000 after acquiring an additional 39,295 shares during the last quarter. Corient Private Wealth LLC increased its stake in shares of ON by 35.7% during the 4th quarter. Corient Private Wealth LLC now owns 29,310 shares of the company’s stock worth $1,338,000 after purchasing an additional 7,713 shares in the last quarter. Alberta Investment Management Corp acquired a new position in shares of ON during the 4th quarter worth approximately $1,683,000. Mercer Global Advisors Inc. ADV lifted its position in shares of ON by 59.9% in the fourth quarter. Mercer Global Advisors Inc. ADV now owns 14,413 shares of the company’s stock valued at $663,000 after acquiring an additional 5,399 shares in the last quarter. Finally, Caitlin John LLC purchased a new position in shares of ON during the fourth quarter valued at approximately $25,000. Institutional investors and hedge funds own 36.39% of the company’s stock.

About ON

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.