On Running Q2 results underscored momentum as the Swiss sneaker maker topped Wall Street estimates, buoyed by strong wholesale performance and a robust e-commerce push. The company raised full-year revenue guidance, signaling more rapid growth and renewed confidence across its running and lifestyle lines, helped by resilient demand in core regions and improving gross margins. Executives pointed to the Vietnam tariffs impact on inputs, noting that calculated price adjustments would help protect margins while ensuring continued demand from wholesale partners and direct-to-consumer shoppers. The brand continues to balance direct-to-consumer versus wholesale to reach runners globally, leveraging a growing store network alongside a compelling online experience and seamless international shipping. With ongoing product innovation and a growing global footprint, On Running remains a premium disruptor in the performance footwear market, strengthening its niche against larger brands while expanding awareness in newer markets.
Analysts often describe On Running as a Zurich-based, premium running label that combines high-end design with a fast-growing direct-to-consumer footprint. By framing its strategy around product innovation, lifestyle appeal, and selective pricing, the brand aims to sustain momentum even as macro factors shift. Industry observers compare it with established giants, noting how a strong e-commerce presence and a selective wholesale network can expand reach without sacrificing brand prestige. The emphasis on flagship stores, digital channels, and regional market expansion signals a thoughtful path for long-term growth in the competitive athletic footwear space.
On Running Q2 Results: Strong Beat Drives Raised 2025 Guidance
On Running Q2 results underscored momentum, with revenue rising 32% year over year to 749 million francs and beating Wall Street expectations. The release highlighted solid performance across both wholesale and direct-to-consumer channels, signaling continued demand for On’s premium running lineup.
Following the quarterly beat, the company raised its full-year revenue outlook to 2.91 billion francs and nudged gross-margin guidance higher to 60.5%–61%. This upgrade reflects a favorable mix shift and pricing actions that support profitability even as On navigates macro headwinds.
Vietnam Tariffs Impact and On’s Mitigation Strategy
Vietnam tariffs impact remains a key cost consideration, given that On sources roughly 90% of its goods from Vietnam. In response, the company implemented price increases on July 1 to offset higher import costs while aiming to preserve demand across wholesale partners and consumers.
CEO Martin Hoffmann noted that On is balancing margins with brand positioning, leaning more pricing adjustments toward its lifestyle lines while trying to stay closer to prior levels on running products. The strategy aims to protect topline growth without triggering a meaningful slowdown in demand.
On Running 2025 Guidance Raised After Q2 Revenue Beat
On Running 2025 guidance was raised as the Q2 performance validated its trajectory, with management guiding full-year revenue toward 2.91 billion francs. The lift aligns with continued strength across regions and channels, signaling confidence in ongoing expansion.
Management also reiterated expectations for a robust gross margin, targeting 60.5%–61% for the year as the mix shifts toward higher-margin direct-to-consumer and premium products. This outlook supports an improved profitability profile alongside top-line growth.
On Direct-to-Consumer vs Wholesale: A Balanced Growth Engine
On direct-to-consumer vs wholesale remains a central growth engine, with both channels delivering revenue above StreetAccount expectations in Q2. The company’s blended model helped sustain momentum even as it expands its digital footprint and retail footprint.
The strategic balance allows On to capture more shelf space with wholesalers while accelerating direct digital sales, including a growing e-commerce channel and new store openings. This dual approach is designed to sustain margin expansion and broaden global brand reach.
On Sneakers vs Nike: Gaining Ground in the Running Category
On sneakers vs Nike dynamics are a notable backdrop to the quarter, with On increasingly identified as a share-gainer in the running segment. The results reinforce the brand’s case for innovation and premium positioning as a driver of demand.
Industry chatter around On’s competitive edge emphasizes its distinctive cushioning technology and design language, which help attract new customers while maintaining loyalty among existing runners. The ongoing market share shift underscores the relevance of On’s strategic product roadmap.
Pricing Moves: July 1 Increases Offset Tariff Costs
To counter higher import costs tied to Vietnam tariffs impact, On implemented price increases effective July 1, focusing adjustments where they would least disrupt running-product demand while offsetting elevated input costs.
Despite the price changes, early feedback suggests demand remains resilient across wholesale partners and direct-to-consumer channels, contributing to continued top-line growth and supporting the company’s revised guidance.
Regional Momentum: Americas, Europe, Middle East and Africa, and APAC Lead Q2 Growth
Regional performance was broadly positive, with sales in the Americas, Europe, the Middle East and Africa, and the Asia-Pacific region exceeding expectations. The company highlighted strong cross-regional demand and a favorable mix that supported the elevated revenue outlook.
In particular, China emerged as a bright spot, with reported growth running strongly in Q2 as On’s retail stores, e-commerce, and new openings collectively boosted the top line amid a broader regional recovery.
China’s Growth and E-commerce Acceleration Drive Online Momentum
China contributed meaningfully to On’s quarterly results, with roughly 50% year-over-year growth in the quarter as the company expanded its retail footprint and digital sales. The momentum complemented a broader push to scale e-commerce and direct channels.
Ho ffmann emphasized that the American and Chinese consumer bases remain particularly strong, helping to sustain double-digit growth in regions where brand awareness is expanding and online sales are accelerating.
Gross Margin Expansion Supports Confidence in 2025 Outlook
The gross margin expansion to a 60.5%–61% range underscores mix improvement and pricing discipline as a core driver of profitability. The improved margin trajectory helps offset foreign exchange headwinds that influenced quarterly net results.
This margin resilience reinforces investor confidence in On’s ability to sustain profitability while continuing to invest in product innovation, store expansion, and digital platforms across multiple geographies.
Strategic Outlook: Sustained Premium Growth Through Multi-Channel Expansion
Looking ahead, On remains focused on premium positioning and ongoing product innovation to sustain growth. The company intends to leverage both direct-to-consumer and wholesale relationships to broaden reach and deepen consumer engagement.
Key strategic priorities include expanding the store network, accelerating digital revenue, and strengthening supply-chain resilience to navigate tariffs and FX variability. The roadmap emphasizes balanced growth, regional diversification, and a continued emphasis on On Running Q2 results that validate this path.
Frequently Asked Questions
What were On Running Q2 results and how did they compare to expectations?
On Running Q2 results showed revenue of 749 million Swiss francs, up 32% year over year and above the ~705 million francs analysts expected. The quarter produced a net loss of 40.9 million francs, while wholesale revenue reached 441 million francs and direct-to-consumer revenue reached 308 million francs, both above StreetAccount estimates. Growth was broad across regions, with China posting about 50% year-over-year growth, and the company raised its full-year guidance as a result.
What does On Running 2025 guidance say after the Q2 results?
Following the better‑than‑expected Q2 results, On Running raised its 2025 guidance to 2.91 billion Swiss francs in revenue and lifted the gross‑margin outlook to 60.5%–61%. The outlook remains broadly in line with Wall Street estimates and reflects strength in both direct‑to‑consumer and wholesale channels, supported by continued demand in key regions.
How have Vietnam tariffs impact On Running’s costs and pricing strategy?
Vietnam tariffs impact On Running because the company sources about 90% of its goods from Vietnam. To offset higher costs, On raised prices on July 1, and the impact has been managed so far without negative demand signals, helping preserve gross margins within the guided range.
On sneakers vs Nike: how does On Running compare in the market and strategy?
On sneakers vs Nike highlights On’s position as a premium, fast‑growing running and lifestyle brand that has been taking market share in running. On is pursuing a balanced mix of direct-to-consumer and wholesale to grow visibility and shelf space, while continuing to differentiate through product innovation and brand positioning.
What is On Running’s approach to direct-to-consumer vs wholesale and how did it contribute to Q2 growth?
On direct-to-consumer vs wholesale reflects a dual‑channel strategy that contributed to Q2 strength: direct sales were 308 million francs and wholesale revenue was 441 million francs, both above expectations. The combined performance across Americas, EMEA, and APAC shows a healthy mix of stores, e‑commerce, and wholesale partnerships driving growth.
| Key Point | Details | Impact / Notes |
|---|---|---|
| Q2 revenue beat and growth | Revenue 749 million francs ($922m); up 32% YoY; beat Wall Street expectations of 705 million francs (LSEG). Loss per share: 9 cents (francs). | Contributes to raised full-year guidance and signals strong momentum. |
| Raised full-year revenue guidance | Guidance raised to 2.91 billion CHF (vs 2.86b prior); aligns with consensus around 2.92b CHF (LSEG). | Positive; aligns with Wall Street expectations. |
| Raised gross margin guidance | Gross margin guidance now 60.5%–61% (vs 60%–60.5% prior). | Improved margin outlook for the year. |
| Tariffs on Vietnam imports and pricing action | ~90% of goods sourced from Vietnam; price increases implemented July 1 to offset higher costs; CEO notes no negative demand so far; pricing skewed toward lifestyle line. | Pricing strategy offsets tariff impact; demand remains strong. |
| Sales channel performance and regional strength | Wholesale revenue 441m francs vs 429m expected; Direct-to-consumer 308m francs vs 279m expected; Regions beat expectations; China strong. | Balanced channel mix; regional momentum including China. |
| FX impact and profitability | Net loss 40.9m francs (~12c per share); primarily due to USD/CHF currency fluctuations. | Currency effects pressured quarterly results. |
| Brand position and growth momentum | On gaining share from Nike; premium brand; growth >30% in nearly every quarter since 2023. | Competitive positioning in the premium running segment. |
| Store and online performance | Americas/EMEA/APAC strong; ~50% same-store growth in retail; strong e-commerce; new stores opening. | Omni-channel strength and expansion. |
Summary
On Running is positioned for continued momentum as a premium sportswear brand, navigating Vietnam tariffs while delivering strong quarterly results. The company posted 32% revenue growth to 749 million francs, raised its full-year revenue guidance to 2.91 billion francs, and lifted gross margin expectations to 60.5–61%. With a balanced mix of wholesale and direct-to-consumer sales and strength across regions including China and the Americas, On Running remains competitive against Nike in the premium running segment. However, currency fluctuations and tariff developments remain key variables to monitor as margins and quarterly results may shift.
