Federer-backed On raises annual sales forecast on strong holiday demand
By Ananya Mariam Rajesh
Nov 12 (Reuters) -On Holding ONON.N raised its annual sales forecast after beating quarterly revenue estimates on Tuesday, driven by strong holiday season demand for its new running shoes such as Cloud X4 and Cloudnova 2 from customers willing to pay full prices.
The Roger Federer-backed sportswear maker's efforts to invest in marketing by sponsoring athletes at the Paris Olympics, as well as partnering with actor Zendaya to gain more customer attention, helped bring in new buyers and also take market share from bigger rival Nike NKE.N.
Heading into the holiday season, On has also responded to the growing demand for its shoes and apparel by expanding its own-store base, opening flagship stores in New York, Melbourne and Milan.
"The strong momentum really allows us to focus on full price," Martin Hoffmann, co-CEO and CFO of On, told Reuters in an interview, adding the company does not need discounting during the holiday season.
However, On's third-quarter selling, general and administrative expenses increased 36% to CHF 312.7 million ($354.49 million) over last year, as part of its expansion and partnership efforts.
This resulted in the company's adjusted profit per share falling to CHF 0.15, compared to CHF 0.20 per share a year earlier.
Retailers such as Nordstrom and Dick's Sporting Goods are also placing On and Hoka shoes at storefronts, helping On see a 23.2% rise in net sales through the wholesale channel to CHF 389.1 million.
Third-quarter sales rose 32.3% to CHF 635.8 million, compared with analysts' estimate of CHF 617.3 million, according to data compiled by LSEG.
On now expects full-year 2024 reported net sales of at least CHF 2.29 billion ($2.60 billion), versus CHF 2.26 billion forecast earlier.
($1 = 0.8821 Swiss francs)
Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Pooja Desai
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