Shares of On Holding fell more than 13% in premarket trading on Monday after the Swiss athletic footwear and apparel company reported second-quarter sales that missed analyst expectations.

On Holding AG, ONON

Second-quarter sales increased 21.6% on a constant-currency basis to CHF 850.3 million, below the Wall Street consensus estimate of CHF 881.4 million.

Earnings per share came in at CHF 0.31, topping the CHF 0.29 forecast. The report therefore delivered mixed results for investors: a revenue miss, but a profit beat.

On Holding $ONON Reports Q2 2026 Earnings Highlights – August 11, 2026

On Holding $ONON revenue came in at CHF 850.3 million, missing estimates of CHF 878 million but up 13.5% YoY.

Adjusted EPS was CHF 0.35, slightly above the CHF 0.34 estimate.

Gross Margin…

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Despite the sales shortfall, profitability remained strong. Gross margin rose to 65.4%, an increase of 3.9 percentage points from the same period a year earlier. Management said the result was achieved while fully absorbing elevated U.S. tariff costs, with no tariff reimbursements included in the figures. The ability to hold margins while absorbing tariff pressure without passing costs to consumers underscores the premium pricing power that has differentiated On from many peers in the athletic footwear sector, where import-dependent supply chains have made tariff exposure a recurring headwind.

Adjusted EBITDA totaled CHF 168.1 million, and the adjusted EBITDA margin improved to 19.8% from 18.2% in the prior-year quarter.

Direct Sales and Apparel Drive Growth

The direct-to-consumer segment was a key contributor to the quarter. DTC sales rose 34.3% on a constant-currency basis and exceeded expectations in every geographic market. DTC channels typically generate higher margins than wholesale by capturing the full retail price, making the channel's outperformance a meaningful driver of the quarter's profitability gains.

Apparel revenue climbed 56.2% on a constant-currency basis, continuing to outpace footwear as the company's fastest-growing category. While footwear still accounts for the majority of On's revenue, the rapid apparel growth signals progress in the company's effort to broaden beyond its running-shoe roots into a full lifestyle brand.

On also said the Asia-Pacific region now represents more than 20% of global sales, with especially strong performance in Japan, South Korea and Greater China. The region has become a critical growth arena for global athletic brands, and On's expanding share there positions it alongside larger incumbents chasing the same consumers.

The company reported that consumers aged 34 and younger now make up more than one-third of its customer base. On said its Cloudtilt product line has been an important driver of that younger audience.

Co-CEO and company founder David Allemann said the quarter showed the brand can continue expanding while maintaining its premium positioning.

"This financial strength allows us to reinvest in what drives our long-term success: authentic brand connections, premium customer experiences, and, above all, continuous performance innovation," Allemann said.

Full-Year Outlook

For the full fiscal year, On expects sales growth in the low-20% range on a constant-currency basis. Based on current exchange rates, the guidance implies revenue of CHF 3.47 billion to CHF 3.56 billion. The top end of that range matches the CHF 3.56 billion analyst consensus.

Management said it expects the direct-to-consumer channel to grow faster than wholesale in the second half of the year.

The company also projected full-year gross margin of at least 65.0% and adjusted EBITDA margin between 19.5% and 20.0%.

The stock's sharp premarket decline came despite the earnings beat and margin improvement, with the revenue miss appearing to weigh on investor sentiment. For high-growth companies valued primarily on top-line momentum, even a modest revenue shortfall can trigger outsized share-price reactions when expectations entering the print are elevated.