ON shoes should not be confused with ‘QC shoes’ or ‘OC shoes’ like I hear some people call them due to the potentially confusing On logo on the side – I can see how that may happen in all honesty.
On expects net sales this year to be close to $2 billion, but that still just represents a small slice of the global athletic footwear market.
On shares have nearly doubled in 2023,
setting a hot pace for the footwear industry's impressive performance. On Holding raised guidance after its Q1 beat, but sees growth slowing significantly later in the year.
On earnings tripled to 0.15 per share CHF (Swiss francs) adjusted on a 78.3% revenue increase to 420.2 million CHF. In U.S. dollars, earnings spiked to 17 cents on $470.6 million in sales.
Analysts polled by FactSet expect adjusted earnings to double year over year to 0.10 CHF. Sales were seen spiking 61.4% to 380.57 million CHF. In dollars, FactSet analysts expected earnings of 13 cents per share on $426 million in revenue.
On Holding maintained its gross profit margin projections for the year, expecting it to reach 58.5% in 2023 from 56% last year.
The company raised its net sales outlook to at least 1.74 billion CHF, up slightly from its March forecast of 1.7 billion CHF. In dollars, the performance shoe maker expects sales of $1.95 billion, up from $1.36 billion last year.
Executives in the earnings call said they expect On's revenue growth rate in the mid-50s for the first half of the year but were more conservative for the second half of 2023, projecting the revenue growth rate in the mid-30s range. Executives noted a weaker environment and more volatile wholesale orders may weigh on performance but said, "we don't need to chase sales," as the "brand has been received super, super strongly" at new stores.
Williams Trading downgraded On Holding to a sell rating from hold early Wednesday following earnings on concerns over its long-term brand health. Analyst Sam Poser noted that On's aggressive growth plans are driving "impressive" short-term results and pulling significant market share from "pretty much every athletic footwear brand" except for HOKA from
Deckers Outdoor(
DECK) and New Balance. The management teams at HOKA and New Balance protect their brands better than On, Poser contends. On executives are clear they plan to keep supply below demand, the analyst wrote. But their focus on growth and broad consumer acceptance has created a large spread of styles for On running and "far too much inventory." Poser has a 26 price target for ONON stock.
-On Holding averaged a massive 269.5% earnings growth over the past four quarters on an average 66% leap in sales leading up to the release.
-The Swiss performance-shoe maker went public at 24 per share in September 2021
WELL THERE IS NO DOUBT THIS IS AN INTERESTING IDEA BUT IT'S NOT QUITE READY FRO STK OF THE WEEK.
