On Holding AG (NYSE: ONON) shares surged more than 20% in intra-day trading on Wednesday after the Swiss athletic footwear maker raised its full-year outlook following stronger-than-expected third-quarter earnings.
The company reported quarterly earnings per share of CHF 0.36, topping analyst forecasts of CHF 0.27. Revenue climbed to CHF 794.4 million, above the consensus estimate of CHF 763.8 million.
Net sales increased 24.9% year over year, or 34.5% at constant currency, fueled by strong demand in both Direct-to-Consumer (DTC) and Wholesale channels. DTC revenue grew 27.6% to CHF 314.7 million, or 37.5% on a constant-currency basis, while Wholesale sales rose 23.3% to CHF 479.6 million, or 32.5% when adjusted for currency fluctuations.
Adjusted EBITDA jumped 49.8% to CHF 179.9 million from CHF 120.1 million a year earlier, pushing the margin to 22.6% from 18.9%. Gross profit margin improved to 62.5% from 60.1%.
For the full year, On Holding projected constant-currency sales growth of 34%, up from prior guidance of at least 31%. At current exchange rates, this corresponds to approximately CHF 2.98 billion in revenue, compared to the previous forecast of CHF 2.91 billion.
The company also raised its adjusted EBITDA margin target to above 18%, versus 17%–17.5% previously, and now expects a gross margin around 62.5%, higher than its earlier outlook of 60.5%–61.0%.
