ONON Q2 2025: Order Book Spurs Raised Full-Year Guidance Amid Tariffs
- Raised Guidance & Order Book Strength: Executives pointed to a robust order book and strong brand momentum—even amidst tariff headwinds—that underpins their decision to raise constant currency net sales and adjusted EBITDA guidance for the full year.
- Balanced & High-Growth D2C Strategy: Management highlighted accelerated growth in the direct-to-consumer channel—with double-digit growth figures in key regions—and selective door expansion that supports high-margin, premium sales across both online and brick‐and‐mortar channels.
- Operational Efficiency & Margin Expansion: Improved working capital management, effective pricing initiatives to offset tariff increases, and continued investments in innovation and premium product offerings were emphasized as drivers that will help sustain gross margin expansion over time.
- Tariff Headwinds: Management acknowledged that tariffs have increased from around 20% to up to 40% on imports from key production regions (Vietnam and Indonesia), which could pressure margins if cost pass-through measures or mitigation efforts fall short.
- FX and Macroeconomic Uncertainty: The reported net loss of CHF 40,900,000.0 in Q2 due to unfavorable foreign exchange impacts, coupled with an uncertain macroeconomic environment, may continue to adversely affect profitability.
- Regional Growth Concerns in the U.S.: Although the U.S. remains a significant market, guidance highlights caution for the region compared to robust growth in other areas, indicating potential risks of slower-than-expected growth and tougher comparisons in the coming quarters.
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Net Sales Growth | FY 2025 | no prior guidance | Constant currency net sales growth of at least 31% YoY and implied reported net sales of at least CHF 2,910 million | no prior guidance |
Gross Profit Margin | FY 2025 | 60% to 60.5% | 60.5% to 61% | raised |
Adjusted EBITDA Margin | FY 2025 | 16.5% to 17.5% | 17% to 17.5% | raised |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Direct-to-Consumer (D2C) Growth Strategy | Robust D2C growth was highlighted in Q1 2025, Q4 2024, and Q3 2024 with strong sales numbers, enhanced channel synergies, and investments in tech capabilities | Q2 2025 emphasized exceptional growth with record net sales, improved D2C mix, and enhanced retail–e-commerce synergy | Continued strong performance with incremental gains in market share and premium positioning |
Brand Momentum and Marketing Initiatives | Previous periods showcased powerful brand momentum driven by high-profile campaigns, celebrity and athlete partnerships, and regional retail successes | Q2 2025 underlined broad-based growth across regions, youth appeal, and cultural relevance as key drivers of brand momentum | Enhanced global brand appeal through integrated marketing and premium retail experiences |
Product Innovation and Premium Pricing Power | Earlier calls discussed new product launches (e.g., Cloudsurfer, Cloud 6), technological breakthroughs, and price increases to support premium positioning | In Q2 2025, the focus was on expanding product franchises (including Cloud 6), leveraging technological innovation, and implementing selective U.S. price increases to boost margins | Sustained innovation with refined premium pricing enhancing margin performance |
Operational Efficiency, Margin Expansion, and Supply Chain Management | Q1, Q3, and Q4 2024 emphasized initiatives like warehouse automation, supply chain optimizations, and incremental margin improvements through better inventory and cost management | Q2 2025 highlighted improved distribution cost control, tighter SG&A, a higher gross margin of 61.5%, and ongoing supply chain enhancements | Ongoing operational improvements delivering stronger margins and more efficient inventory management |
Tariff Headwinds, FX, and Macroeconomic Uncertainty | Earlier periods noted moderate tariff pressures, FX volatility, and a cautious outlook due to macroeconomic uncertainties | Q2 2025 reported significantly increased tariffs (40%/39%), noted FX headwinds and tailwinds that aided margins, and maintained a prudent yet sustainable outlook | Heightened tariff pressures managed through price increases and operational efficiencies while maintaining a cautious macro outlook |
Automation and Technological Integration | Prior discussions in Q1, Q3, and Q4 2024 focused on the Atlanta warehouse automation project and progressive integration of LightSpray technology through pilot testing and scaling efforts | Q2 2025 emphasized LightSpray as a breakthrough innovation recognized by Fast Company, while details on the Atlanta project were less prominent | Continued focus on technological integration with increased emphasis on disruptive manufacturing innovation via LightSpray |
Regional Market Dynamics and U.S. Consumer Environment | Previous periods presented steady regional growth with strong performance in APAC, EMEA, and a resilient U.S. market anchored by premium D2C and robust wholesale performance | Q2 2025 demonstrated robust EMEA performance, triple-digit growth in APAC, and strong U.S. consumer demand despite external challenges like tariffs | Consistent regional expansion with solid U.S. consumer momentum in the face of external headwinds |
Wholesale and Retail Expansion Strategy | Earlier calls (Q1, Q3, Q4 2024) detailed controlled wholesale growth, strategic partnerships with key accounts, and impressive retail store launches that enhanced brand experience | In Q2 2025, the strategy focused on balanced growth via selective wholesale partnerships and innovative retail expansion in new markets with premium experiences | Continued expansion with a balanced channel approach, underscoring premium positioning and global retail presence |
Emerging Apparel and Diversified Revenue Mix | Prior periods highlighted emerging apparel success with strong sales growth, strategic marketing partnerships, and diversification beyond footwear in product mix | Q2 2025 underscored robust apparel growth with a 75.5% increase and a diversified revenue mix across regions and channels, driven by innovation and marketing | Accelerated apparel growth and revenue diversification, reinforcing a broader and more resilient product portfolio |
Guidance Adjustments and Order Book Strength | Earlier periods expressed cautious guidance with stable wholesale order books and strong D2C performance, reflecting promising preorders and balanced channel performance | Q2 2025 raised guidance across net sales, margins, and EBITDA while citing a robust order book for the fall/winter season as validation for increased expectations | Upward revision of guidance and strengthened order book indicate increased confidence and momentum for future performance |
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Guidance & Tariffs
Q: Confident raising guidance despite tariffs?
A: Management emphasized a robust order book and strong global momentum—including effective price increases and operational efficiencies—that let them confidently raise constant currency revenue and adjusted EBITDA margin guidance even with higher tariffs. -
Revenue & Margin Growth
Q: How will second-half growth and margins trend?
A: They expect consistent, regionally driven revenue growth—strong in Asia, measured in the U.S.—with margin expansion supported by a higher D2C mix, supply chain improvements, and selective store openings. -
Working Capital & Wholesale
Q: Inventory and wholesale door plans?
A: The team has improved working capital by tightening inventory management and is pursuing selective, premium wholesale expansions while leveraging robust D2C gains to fuel overall growth. -
Gross Margin Outlook
Q: Are further price increases needed for margins?
A: Management is confident that the July price adjustment, combined with scale-driven efficiencies and favorable FX, will maintain their gross margin at around 60%+ without additional hikes. -
Apparel Momentum
Q: What drives apparel success and future growth?
A: Growth in apparel is attributed to broad brand adoption through direct channels, high-profile collaborations, and innovative technical fabrics that blend performance with fashion, extending the market reach. -
Revenue Cadence & Apparel Strategy
Q: What’s the revenue rhythm for Q3/Q4 and apparel focus?
A: Management anticipates a steady revenue cadence with region-specific growth—cautious in the U.S. but strong in Asia—while continuing to advance their premium apparel strategy that integrates innovative design with sports performance.
Research analysts covering On Holding.