On reports record sales as upward climb continues
On, the disruptive Swiss running shoe brand, said this week that Q3 was the strongest quarter in its history, as it reported net sales of CHF328 million (€332m/£289m/$345m).
That said, the gross profit margin of 57.1%, was down from 60.2% in the prior year period, although up from 55.1% in Q2, “reflecting unfavourable foreign exchange rates and continued, yet reduced, transitory headwinds from a higher airfreight share”.
But “despite an uncertain macroeconomic environment, foreign exchange headwinds, and temporary supply chain constraints”, adjusted EBITDA rose 48.5% to CHF56.3 million.
It added that it’s “monitoring the macroeconomic developments and potential changes in consumer demand with caution”. But based on the "outstanding performance of the first three quarters of 2022 and strong order books for Q4”, On is raising its previous guidance by CHF25 million and now expects net sales of CHF1.125 billion and increased adjusted EBITDA of CHF148 million for full-year 2022.
Looking more closely at Q3, that net sales figure was an increase of 50.4% and net sales through the direct-to-consumer channel increased 40.7% to CHF106.6 million. Its sales via wholesale rose 55.6% to CHF221.4 million.
Turnover in North America was up 57.1% to CHF176.3 million, while in Europe it rose 31.8% to CHF116.5 million. In Asia Pacific it saw an 85.2% jump to CHF24.2 million.
Gross profit increased 42.7% to CHF187.4 million but the gross profit margin decreased to 57.1% from 60.2%. Meanwhile net income rose to CHF20.6 million, a leap from CHF 13 million a year ago.
The company continues to benefit from high-profile link-ups and said that during Q3, On athlete Gustav Iden won the men's Ironman World Championship in Hawaii with a new overall course record, as well as running a course record marathon.
And it said that its recently launched running and trail running shoes “are extremely hot and win market share globally”.
The company's first online resale platform Onward, its We-Chat Mini program in China, and its latest owned retail store in Los Angeles were some of the highlights of the last three months.
Its strong performance this year as a whole and the strong order books for Q4 and beyond "give us a lot of confidence going into the last months of the year and into 2023," it said
David Allemann, Co-Founder and Executive Co-Chairman, said: “The momentum of the brand shows no signs of slowing. This quarter has seen On reach more new fans than ever before with our mix of innovative performance footwear and apparel, powerful marketing campaigns and immersive shopping experiences. Our unrelenting focus on performance innovation continues to be a winning formula, inspiring us to create the world’s first ever shoe made from carbon emissions and helping our fans and elite athletes to achieve their dreams.”
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