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Sneaker maker On Tempers 2026 Sales Growth Outlook as Second-Quarter Top-Line Misses Views

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Sneaker maker On Tempers 2026 Sales Growth Outlook as Second-Quarter Top-Line Misses Views

On Holding (ONON) tempered its full-year constant-currency sales growth outlook on Tuesday as the Swiss sneaker maker's second-quarter revenue fell short of market estimates.

The company now anticipates sales to rise by a low-20% figure at constant currency terms for 2026, compared with prior projections for growth of at least 23%.

The revised guidance implies 3.47 billion Swiss francs ($4.28 billion) to 3.56 billion francs at current spot rates, while the consensus on FactSet is for 3.56 billion francs. It previously projected reported sales of at least 3.51 billion francs, based on then spot rates.

On's New York Stock Exchange-listed shares plunged 19% in Tuesday trade, taking their year-to-date loss to 33%.

The group's direct-to-consumer channel is expected to "strongly" outperform the wholesale segment in the second half, according to On.

"On is deliberately managing wholesale sell-in to protect full-price integrity in a promotional marketplace, ensuring a clean runway for On's upcoming breakthrough innovations leading into 2027," the company said.

For the three months through June, On's sales advanced to 850.3 million francs from 749.2 million francs last year, but trailed the Street's view for 878.4 million francs. On a constant currency basis, sales climbed 22%.

Revenue in the direct-to-consumer channel added 26% to 388.4 million francs, while the wholesale channel recorded a 4.8% increase to 461.9 million francs.

Shoe revenue rose 11% to 781.6 million francs in the second quarter, while apparel and accessories jumped 48% and 88%, respectively. Net sales gained 4.5% in the Americas, with double digit gains in Europe, the Middle East and Africa and Asia Pacific.

The company swung to adjusted earnings of 0.35 francs per class A share from a loss of 0.09 francs annually, topping the average analyst estimate that called for EPS of 0.34 francs.

Last week, Truist Securities said sentiment around On leaned "bearish" following a surprise CEO change announcement earlier this year. In March, On appointed co-founders David Allemann and Caspar Coppetti as co-CEOs, effective May 1, succeeding Martin Hoffmann.

On is "advantageously" positioned due to its comparatively low brand awareness in international markets, high-income consumer base and a solid product pipeline, Truist said in a note.

Last week, Under Armour (UAA, UA) reported an annual drop in its fiscal first-quarter footwear revenue and lowered its consolidated full-year sales outlook amid weak demand in North America and Asia Pacific. Footwear maker Crocs (CROX) issued a downbeat third-quarter earnings guidance in July, while its second-quarter results topped Wall Street's estimates.

In June, sportswear giant Nike (NKE) posted a year-over-year decline in its fiscal fourth-quarter revenue.

Price: $31.30, Change: $-7.49, Percent Change: -19.30%

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