ON (NYSE:ONON) Posts Quarterly Earnings Results, Beats Estimates By $0.01 EPS

ON (NYSE:ONON) posted its quarterly earnings results on Tuesday. The company reported $0.43 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.42 by $0.01, FiscalAI reports. ON had a return on equity of 15.72% and a net margin of 7.92%.The business had revenue of $1.05 billion for the quarter, compared to analyst estimates of $1.09 billion. During the same period last year, the company earned ($0.09) EPS. The firm’s revenue was up 13.5% on a year-over-year basis.

Here are the key takeaways from ON’s conference call:

• Q2 net sales rose 21.6% at constant currency to CHF 850 million, led by direct-to-consumer sales, which grew 34.3% and reached 45.7% of total revenue. Growth was broad-based, with particularly strong results in APAC and EMEA.
• Gross margin expanded to 65.4% and adjusted EBITDA margin reached 19.8%, supported by stronger DTC mix, full-price selling, and operating efficiencies. The company raised its full-year gross margin outlook to at least 65% while maintaining its 19.5%-20% adjusted EBITDA margin target.
• Wholesale growth moderated to 12.7% at constant currency, as softer sell-through for everyday running franchises in the promotional Americas market prompted On to reduce sell-in and avoid excess channel inventory. These actions are expected to weigh on Q3 growth, although management characterized the weakness as temporary.
• Management highlighted strong momentum in newer growth engines, including apparel, which grew 56.2% at constant currency, training at 40%, and rapidly expanding tennis and lifestyle franchises. The upcoming product pipeline, including Cloudsurfer 3, new foam technologies, and LightSpray products, is expected to support future full-price demand.
• Full-year constant-currency sales growth guidance was reset to the low 20s, reflecting deliberate wholesale restraint, while management expects continued strong DTC momentum and significant DTC mix expansion in the second half. Inventory rose 31% year over year, primarily due to higher product volumes and foreign-exchange effects.

ON Stock Up 0.4%

Shares of NYSE ONON traded up $0.12 during mid-day trading on Wednesday, reaching $31.03. 12,247,877 shares of the company’s stock were exchanged, compared to its average volume of 6,048,315. The firm has a market capitalization of $19.80 billion, a price-to-earnings ratio of 33.37, a PEG ratio of 0.71 and a beta of 2.12. The company has a current ratio of 2.98, a quick ratio of 2.39 and a debt-to-equity ratio of 0.26. The business has a fifty day simple moving average of $37.17 and a 200 day simple moving average of $38.81. ON has a twelve month low of $30.11 and a twelve month high of $51.08.

Trending Headlines about ON

Here are the key news stories impacting ON this week:

• Positive Sentiment: Second-quarter earnings slightly exceeded estimates, while revenue increased 13.5% year over year. Gross margin expanded to 65.4%, adjusted EBITDA margin reached 19.8%, and management raised its full-year gross-margin outlook to at least 65%. On Holding Slides After Q2 Sales Missed Expectations Despite Strong Margins
• Positive Sentiment: Direct-to-consumer sales grew 26% and represented 45.7% of revenue, while Asia-Pacific expansion and category growth remain longer-term growth drivers. Several firms, including Stifel, UBS, BTIG, and Telsey, retained positive ratings despite reducing their price targets, indicating analysts still see substantial potential upside. On Holding’s Price Stumble May Be an Opening for a Company Built to Run
• Neutral Sentiment: The stock has attracted both institutional buying and selling, while insider activity has been mixed. These signals may provide some support but do not clearly establish a near-term direction.
• Negative Sentiment: The primary catalyst for the selloff was a quarterly revenue miss. Wholesale sales grew only 4.8% as On deliberately reduced sell-in to protect pricing and brand positioning in a promotional market. Foreign-exchange effects, higher U.S. tariff costs, and cautious consumer spending further pressured reported results. On Shares Fall Sharply After Wholesale Slowdown in Q2
• Negative Sentiment: On Holding’s fiscal 2026 revenue outlook of approximately $4.4 billion to $4.5 billion was around or below the $4.5 billion consensus estimate, reinforcing concerns that sales growth is slowing. Analysts responded by lowering targets: Stifel cut its target to $41, UBS to $73, Telsey to $43, and Baird to $55, although each maintained a positive rating. On Holding Analysts Slash Their Forecasts After Q2 Results

Analysts Set New Price Targets

Several research firms have weighed in on ONON. Bank of America reissued a “buy” rating on shares of ON in a research note on Wednesday. BTIG Research lowered their price target on ON from $70.00 to $60.00 and set a “buy” rating for the company in a research note on Tuesday. Barclays cut their price target on shares of ON from $46.00 to $42.00 and set an “overweight” rating on the stock in a research report on Wednesday. Raymond James Financial lowered shares of ON from a “strong-buy” rating to an “outperform” rating and reduced their price objective for the stock from $52.00 to $38.00 in a research note on Wednesday. Finally, Williams Trading set a $32.00 price objective on shares of ON in a report on Tuesday. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, five have issued a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, ON currently has an average rating of “Moderate Buy” and a consensus price target of $48.57.

Insider Activity at ON

In related news, insider Olivier Bernhard bought 60,000 shares of the company’s stock in a transaction on Thursday, May 14th. The shares were purchased at an average cost of $36.63 per share, for a total transaction of $2,197,800.00. Following the acquisition, the insider owned 5,163,184 shares of the company’s stock, valued at approximately $189,127,429.92. This represents a 1.18% increase in their position. The purchase was disclosed in a filing with the SEC, which can be accessed through this link. Also, CEO Caspar Felix Coppetti bought 60,000 shares of the company’s stock in a transaction on Thursday, May 14th. The shares were bought at an average price of $36.64 per share, for a total transaction of $2,198,400.00. Following the completion of the acquisition, the chief executive officer directly owned 2,375,855 shares in the company, valued at approximately $87,051,327.20. This trade represents a 2.59% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. In the last three months, insiders acquired 180,000 shares of company stock worth $6,594,000.

Institutional Investors Weigh In On ON

Several large investors have recently made changes to their positions in the stock. Caitlin John LLC acquired a new position in ON in the 4th quarter worth $25,000. Caitong International Asset Management Co. Ltd raised its stake in shares of ON by 555.1% in the 4th quarter. Caitong International Asset Management Co. Ltd now owns 701 shares of the company’s stock valued at $33,000 after purchasing an additional 594 shares during the period. Horizon Investments LLC bought a new stake in shares of ON in the third quarter valued at about $44,000. Jessup Wealth Management Inc bought a new stake in shares of ON in the fourth quarter valued at about $46,000. Finally, Triumph Capital Management boosted its position in shares of ON by 927.7% during the fourth quarter. Triumph Capital Management now owns 1,593 shares of the company’s stock worth $74,000 after buying an additional 1,438 shares during the period. Institutional investors own 36.39% of the company’s stock.

About ON

On Holding AG, commonly known as On, is a Swiss performance footwear and apparel company headquartered in Zurich. Founded in 2010, the company designs, develops and sells running shoes, performance apparel and accessories for road, trail and everyday use. On’s product philosophy centers on engineered cushioning and responsiveness intended to serve both serious athletes and lifestyle consumers.

On is best known for its proprietary midsole technology and distinctive sole architecture, marketed under names such as the Cloud family of shoes and related performance lines.