On beat what Wall Street wanted on earnings. It raised its outlook for 2026.
The stock dropped more than 5% anyway. It's now down nearly 27% for the year.
The Swiss sneaker brand is in a strange spot. It's growing faster than almost any name in sportswear. But it's losing the patience of investors who bought in for the fast-growth story.
Revenue came in at 831.9 million Swiss francs. That's up 14.5% from a year ago and just above the 823 million Wall Street wanted.
Adjusted earnings per share landed at 37 cents in francs. That's ten cents above estimates.
Net income almost doubled from a year earlier. It jumped to 103.3 million francs from 56.7 million.
The miss came in direct-to-consumer sales. On's own website and stores grew 16.4% to 322.3 million francs. Analysts had hoped for 326 million.
That's a small gap on paper. It's a bigger one for a brand whose whole premium pitch leans on selling straight to customers.
Wholesale made up the difference. It rose 13.3% to 509.6 million francs, easily beating estimates. But it's the lower-margin side of the business.
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China is where the story gets interesting. On's sales there are growing at a high-double-digit pace.
Apparel now makes up 30% of On's China business. That's five times the company-wide rate.
Co-CEO Caspar Coppetti said the brand caters to "an affluent and aspirational consumer." That shopper doesn't really feel gas prices or tariffs.
The same shopper in China is "becoming more and more savvy," in his words. They're either going local or paying up for the kind of "extra touch" Swiss design offers.
Nike has been losing share to Chinese rivals like Anta and Li-Ning for years. On is sliding into the premium gap.
On raised its 2026 gross profit margin outlook to at least 64.5%, up from 63%. It also bumped adjusted EBITDA margin guidance to a 19.5% to 20% range.
Here's the twist. That guidance still assumes a 20% tariff on imports from Vietnam.
The U.S. Supreme Court tossed the tariff earlier this year. On has filed for a refund. The brand is keeping the cushion in case Washington tries another route to keep the duties on.
Coppetti told CNBC that even if tariffs ease, the impact on On's results would be "immaterial."
Just before the quarter ended, co-founders David Allemann and Coppetti became co-CEOs. They took over from Martin Hoffmann, who had been CEO since 2021.
The stock is down nearly 27% year to date. A beat and a raise didn't move it. Investors want more than what they got this quarter.
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