Federer-backed On backs annual sales forecast after quarterly beat, shares fall (updated)

On Holding AG

13/08/2024 10:18

(Adds shares in paragraph 2)
    By Ananya Mariam Rajesh
       Aug 13 (Reuters) - On Holding  ONON.N  beat analysts'
estimates for second-quarter revenue on Tuesday on strong demand
from customers looking for trendy products but shares fell 8%
premarket after the company reiterated its annual sales
forecast.
    The company maintained its 2024 net sales expectations of at
least 30% growth, reflecting an impact from low stock and supply
challenges at its Atlanta distribution centers that resulted in
extended delivery times.
    "We have experienced shipping delays, but we also
experienced out-of-stock situations towards our DTC channel. And
while we posted a record quarter, it could have been even
stronger if we would not have had those impacts," co-CEO and CFO
Martin Hoffmann told Reuters. 
    The company's second-quarter sales rose nearly 28% to 567.7
million Swiss francs ($655 million), compared with LSEG
estimates of 560.9 million Swiss francs.
    "We see a high share of full price sales and also I think we
are very well-positioned on the inventory side, which doesn't
post a lot of pressure ... for us it is always the full price
business it's the meaningful business in the long term,"
Hoffmann said.
    Roger Federer-backed On, which went public in 2021, has
edged out sportswear giant Nike for shelf and online space at
retailers like Dick's Sporting Goods  DKS.N  and Foot Locker
 FL.N  in the running shoe category.
    On's shares have risen nearly 47% so far this year.
    Customers have been more than willing to spend on
comfortable and new products such as those made by On, New
Balance and Hoka in the U.S. and Europe. 
    On has been building on  the momentum and launched products
in the running and trail categories such as Cloudmonster Hyper
and Cloudrunner 2 and signed a multi-year partnership with
actress Zendaya in the second quarter. 
    The company's adjusted profit came in at 0.14 Swiss francs
per share. Analysts were expecting the company to report 0.16
Swiss francs per share.


($1 = 0.8664 Swiss francs)

 (Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by
Sriraj Kalluvila)
 ((AnanyaMariam.Rajesh@thomsonreuters.com ; X: https://twitter.com/AnanyaMariam;))