On Holding sells a running shoe with a springy honeycomb sole and a following that treats the swoosh-free logo like a badge. On Tuesday the Swiss brand also handed its shareholders the worst single day in the company’s public life. The stock cratered as much as 22% to a roughly two-year low, a record one-day fall. The odd part is that On did not lose money. Net income swung to a profit of CHF 105.0 million. What sank the shares was a single line near the top of the release: revenue missed.
Second-quarter net sales came in at CHF 850.3 million. Analysts had modelled CHF 878.16 million. A shortfall of under CHF 30 million does not sound fatal, but for a stock priced as a relentless grower, any crack in the growth story gets punished hard, and this one came with a guidance cut attached.
The wholesale wobble
The soft spot was wholesale, the channel where On sells through retailers and department stores. Wholesale net sales rose 4.8% to CHF 461.9 million, or 12.7% in constant currency. That is growth, but it is a hard stop from the 25.1% constant-currency sprint On posted in the first quarter. Management framed it as a choice. Co-CEO David Allemann said the company is “deliberately managing wholesale sell-in to protect full-price integrity in a promotional marketplace,” clearing what he called a “clean runway” for new products heading into 2027.
Translation: On would rather sell fewer pairs at full price than flood outlets with discounts the way some rivals have. Noble in theory. Expensive on results day.
Direct sales are the bright bit
The direct-to-consumer side told a happier story. DTC sales climbed 26.0% to CHF 388.4 million and hit a second-quarter high of 45.7% of total net sales, helped by On’s own shops and a widening network that added first-ever locations in Sao Paulo and Copenhagen. Selling straight to the customer carries fatter margins, and On leaned into it, lifting its full-year gross margin outlook to at least 65% from 64.5%.
So the shape of the business is arguably improving even as the headline number disappointed. Higher-margin channels growing, brand kept premium, profit turning positive against a CHF 40.9 million loss a year ago. On the bottom line, though, adjusted earnings of 35 cents a share missed the 44 cents analysts wanted by a fifth, and that gap did the damage.
The guidance cut that stung
On trimmed its constant-currency revenue growth outlook to the low-20% range, down from a prior floor of 23%. In cash terms that points to full-year net sales of CHF 3.47 billion to CHF 3.56 billion. When a company whose entire pitch is fast, durable growth shaves the top off its own forecast, momentum investors head for the exit first and read the margin footnotes later.
That is roughly what played out. The margin story is genuinely decent. The growth story took a dent. And in a market that had On priced for near-perfection, a dent was enough to wipe out a fifth of the value in a session.
Whether Tuesday was an overreaction or a fair reset depends on your view of 2027, when On says the held-back innovations are meant to arrive. Bulls will call the sell-off a gift. Bears will point at the decelerating wholesale line and wait. (Not investment advice.)
Did you know: On reports in Swiss francs, so a slice of its headline growth swings with the franc-dollar rate before a single extra shoe is sold.
Sources
- On: Q2 and six-month 2026 results
- Yahoo Finance: stock drops 22% on sales miss
- WWD: On Q2 earnings and stock drop
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