On (NYSE:ONON) said it delivered record results in 2025, clearing CHF 3 billion in annual net sales for the first time as demand accelerated across regions and channels. Executives credited “premium” positioning, disciplined full-price selling, and new product innovation for driving both growth and margin expansion, while outlining 2026 guidance that calls for at least 23% net sales growth at constant currency and further profitability gains.
2025 results: net sales above CHF 3 billion and record margins
CEO Martin Hoffmann said 2025 net sales surpassed CHF 3 billion, with reported growth of 30% and constant-currency growth of 35.6%. The company posted a record gross profit margin of 62.8% and an adjusted EBITDA margin of 18.8%, which Hoffmann said already exceeds On’s stated 2026 aspirations. Operating cash flow in 2025 was CHF 359.5 million, and the company ended the year with more than CHF 1 billion in cash.
Fourth quarter: DTC and wholesale both exceeded expectations
For the fourth quarter, Hoffmann said net sales were CHF 743.8 million, up 22.6% year-over-year on a reported basis and 30.6% at constant currency, “significantly ahead” of On’s updated guidance from November. He said full-price execution held even during Black Friday and Cyber Monday, and that the quarter outperformed gross margin expectations despite being “less promotional.”
Direct-to-consumer net sales in Q4 were CHF 360.6 million, increasing 21.7% reported and 30% at constant currency. Hoffmann attributed the performance to a coordinated holiday campaign that supported new customer acquisition and repeat engagement while maintaining disciplined full-price selling.
Wholesale net sales were CHF 383.2 million, up 23.4% year-over-year reported and 31.2% at constant currency. Hoffmann said wholesale outperformed internal expectations, supported by strong sell-through at key accounts in the Americas and EMEA and momentum in Southeast Asia distribution markets.
Regional performance: APAC led growth while the Americas remained largest
On reported Q4 net sales of CHF 434.3 million in the Americas, increasing 12.8% reported and 21.3% at constant currency, with “close to 50%” of regional net sales driven by DTC. Hoffmann said core running franchises increased their share of DTC sales by more than five percentage points during the quarter.
EMEA net sales reached CHF 183 million in Q4, up 24.2% year-over-year reported and 27.5% at constant currency, with growth across markets and channels. Hoffmann highlighted continued strength in the U.K., rapid scaling in Southern Europe, and growing momentum in German-speaking markets, while also pointing to the opening of a first store with a distributor partner in Riyadh in November.
Asia-Pacific posted the fastest growth, with Q4 net sales of CHF 126.5 million, rising 70.8% reported and 85.1% at constant currency. Hoffmann pointed to strong execution around China’s Double 11 and Chinese New Year, including On ranking in the top five on Tmall for footwear over CHF 140 in December and in-store traffic in China more than doubling versus baseline during the holiday. He also said Asia-Pacific exceeded CHF 500 million in net sales for the full year.
Innovation, brand collaborations, and multi-category expansion
Allemann emphasized performance innovation and cultural collaborations as key pillars supporting On’s premium strategy. He highlighted upcoming footwear technology, including the Cloudsurfer 3, which he said is 15% lighter and 20% softer and provides 15% more energy in push-offs. Hoffmann said the Cloudsurfer 3 launch in the second half of 2026 will introduce a “world-first in foam development,” combining CloudTec engineering with SURREAL foam.
Allemann also detailed the company’s LightSpray manufacturing approach, describing a process that reduces “200 assembly steps” to one and generates “75% less CO₂,” with an upper produced in three minutes. He said On opened a LightSpray facility in Busan, South Korea, increasing production capacity “30-fold” compared with 2025. In the Q&A, Allemann described the scale-up as moving from “thousands of shoes to hundreds of thousands of shoes,” and noted that the Cloudboom Strike LightSpray release sold out in two weeks when offered to a broader user base.
On’s premium brand collaborations were also a focus. Allemann cited On’s fifth year of collaboration with Loewe and an eighth “drop” featuring the Cloudsolo at $750, saying demand at that price point validates pricing power. He also said the company is moving toward a “true co-creation” model with Zendaya, with a first fully co-created collection planned for spring/summer 2026, and referenced an upcoming project involving an Academy Award-winning director.
Multi-category expansion continued to be a standout theme. Allemann said On’s apparel business grew 76% in 2025 at constant currency. Hoffmann provided additional detail, saying that on a constant-currency basis apparel grew 75.5% and accessories grew 135.1% in 2025; together they represent 7% of total net sales, up 190 basis points year-over-year. He also said apparel and accessories now contribute 15% of total retail net sales, with some flagships running higher.
In Q4, apparel net sales were CHF 45.1 million, up 38.3% reported and 46% at constant currency. Hoffmann said the share of new customers acquired through apparel increased to 10% from 6%.
Margins, cash flow, and 2026 outlook
On reported a Q4 gross margin of 63.9%, up 180 basis points year-over-year and ahead of guidance. Hoffmann said the result reflected full-price discipline, operating efficiencies, and favorable foreign exchange dynamics, which helped offset “external pressures like higher U.S. import tariffs.” SG&A (excluding share-based compensation) was 50.9% of net sales, up 40 basis points, as On redeployed distribution savings into retail expansion and brand building.
For 2026, the company guided to at least 23% net sales growth at constant currency. At current spot rates, Hoffmann said that implies reported net sales of at least CHF 3.44 billion. On expects a full-year gross margin of at least 63% and an adjusted EBITDA margin of 18.5% to 19%.
Executives said DTC is expected to outgrow wholesale in 2026, and that apparel is expected to “meaningfully outpace overall growth.” Hoffmann also noted the company’s “complete fall/winter 2026 order book” exceeded expectations, which he said reflects partner confidence in the product pipeline.
On also addressed timing for a future investor day, with Hoffmann saying the company is “trending” toward the first quarter of next year, in part to align with incoming CFO Frank Sluis, who is expected to start in May.
About ON (NYSE:ONON)
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.
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