On Holding shares slump after Q2 sales miss

Shares of Swiss sportswear company On Holding AG fell sharply on Tuesday after the company reported second-quarter sales that missed market expectations.

The company, known for its performance running shoes and apparel, disclosed that net sales for the quarter totaled $547.8 million, below the $570 million consensus estimate compiled by Refinitiv. The miss follows a period of rapid growth for On Holding, which has expanded its global footprint and gained traction in competitive athletic footwear markets.

Gross margin contracted to 48.1% from 50.2% in the same period last year, reflecting higher promotional activity and elevated input costs. Operating profit declined 12% year-over-year to $78.2 million, while net income fell 15% to $52.1 million. The company attributed the margin pressure to supply chain challenges and increased marketing investments aimed at sustaining brand momentum.

On Holding maintained its full-year outlook for net sales growth of 10% to 15% and an operating margin of around 18%, though analysts noted the recent underperformance can raise questions about execution amid a crowded athletic footwear sector.

The stock, which had surged more than 200% since its 2021 market debut, was down about 12% in early European trading, extending losses after the results. Investors will be watching closely for updates on inventory levels and pricing strategies in the coming quarters.