Group 1 - The Trump Administration has implemented new tariffs of at least 10% on all goods entering the United States, with a potential 46% tariff specifically for goods made in Vietnam [1] Group 2 - The focus is on identifying innovative companies that contribute positively to society, referred to as "divergent stocks," which are characterized by strong fundamentals and long growth potential despite currently low prices [2] Group 3 - The article emphasizes that past performance does not guarantee future results and that no specific investment recommendations are provided [3]

Core Viewpoint - Amer Sports has experienced a significant stock price increase of approximately 187% since its public offering in February 2024, positioning it as a leading name in the consumer discretionary sector [1][2] Financial Performance - The company reported a strong Q1 earnings performance, with sales growth exceeding 23%, surpassing analyst expectations of just under 17% [3] - Adjusted diluted earnings per share (EPS) more than doubled from $0.11 to $0.27, significantly exceeding forecasts [4] - Amer Sports raised its full-year EPS guidance midpoint by over 4% and increased its revenue growth guidance from 14% to 16%, both ahead of analyst expectations [4] Brand and Market Position - Amer Sports' success is largely attributed to its key brand, Arc'teryx, known for high-end outdoor clothing, particularly lightweight waterproof jackets priced between $400 and $900 [6] - The technical apparel segment, which includes Arc'teryx, saw the fastest revenue growth at 28%, contributing 45% to total revenue [7] - Sales in Greater China grew by 43%, accounting for around 25% of total revenue, while the U.S. market contributed 26% with a 12% growth rate [7][8] Direct-to-Consumer Strategy - The company's direct-to-consumer (DTC) sales grew by 39%, significantly outpacing the 12% growth in its wholesale channel, indicating a positive trend for higher margins [8] Segment Performance - The Outdoor Performance segment, which includes Salomon footwear and apparel, saw its growth rate nearly double to 25%, making up 34% of total revenue [9] - Salomon generated $1 billion in revenue in 2024, capturing less than 1% of the global $180 billion sneaker market, with plans for further product launches [10] Valuation and Analyst Ratings - Analysts have raised their price targets for Amer Sports, with an average target just under $41, indicating a potential upside of 6% from recent closing prices [11] - The stock's price-to-earnings ratio stands at nearly 49x, significantly above the industry average of 29x, reflecting its strong earnings and sales growth profile [12] Future Outlook - The company is viewed as having high growth potential, particularly in the footwear segment, but expectations for continued outperformance will need to be managed [13]

Core Viewpoint - On Holding is responding to tariffs by increasing prices, which is expected to maintain profit levels [1] Company Response - The company has announced a price increase as a strategy to counteract the impact of tariffs [1] - This approach is noted as unique compared to other companies facing similar challenges [1] Financial Implications - The price increase is anticipated to keep profits stable despite the external pressures from tariffs [1]

Group 1 - On Holding AG (NYSE: ONON) reported a strong first quarter with sales increasing by 40% in constant currency [1] - The weaker USD contributed positively, resulting in reported sales growth of 43% [1]

Core Viewpoint - ON Holdings' stock price surged by over 10% following the Q1 earnings release and 2025 guidance update, indicating a strong performance in the high-end retail sector and a potential price reversal for the stock [3][4]. Financial Performance - Q1 revenue increased by 43% year-over-year to approximately $862.9 million, driven by strong direct-to-consumer (DTC) and wholesale sales [7][9]. - Direct-to-consumer sales rose by 42.4%, while wholesale sales grew by 38.6%, showcasing robust performance across all operating segments and regions [7][8]. - The core business of shoes grew by 40.5%, with apparel and accessories seeing significant growth of 93% and 97% respectively [8]. Margin and Profitability - Gross margin improved due to enhanced efficiency and a favorable selling environment, although earnings were down compared to the previous year due to foreign exchange shifts [9]. - Despite the earnings contraction, the company maintains profitability, a healthy balance sheet, and rising equity [9]. Future Guidance - ON Holdings raised its growth forecast for Q2 from at least 27% to 28%, with potential for further increases later in the year [10]. - Executives expressed a cautious outlook on profit, anticipating expansion relative to Q1 results, with expectations of sustaining double-digit top-line growth through the end of the decade [11]. Market Sentiment and Analyst Ratings - The current 12-month stock price forecast is $58.18, indicating a 1.34% upside, with a consensus rating of Buy based on 23 analyst ratings [13]. - Short interest remains elevated at nearly 6%, but has decreased from its peak, suggesting potential for a short-covering rally [14]. - Analysts had previously reduced price targets, but sentiment may shift positively following the earnings results, potentially leading to new all-time highs [15].

Group 1 - The U.S.-China trade negotiations have positively impacted the markets, leading to a sharp rally as if tariffs were never announced, with the S&P 500 now in flat territory for the year [1] - Valuation multiples in the market are currently very stretched despite the ongoing presence of economic uncertainties [1] Group 2 - Gary Alexander has extensive experience in covering technology companies and has been involved with seed-round startups, providing insights into current industry themes [1] - He has been a contributor to Seeking Alpha since 2017 and has been quoted in various web publications, with his articles reaching popular trading apps like Robinhood [1]

Financial Data and Key Metrics Changes - Net sales reached CHF 726.6 million in Q1 2025, reflecting a year-over-year growth of 43% on a reported basis and 40% on a constant currency basis, marking the highest quarterly net sales in the company's history [27][39] - Gross profit margin increased to 59.9%, up from 59.7% in Q1 2024, driven by an increased direct-to-consumer (DTC) share [39] - Adjusted EBITDA margin for Q1 was 16.5%, up from 15.2% in the same period last year [39] - Net income reached CHF 56.7 million despite a sizable unrealized foreign exchange loss [40] Business Line Data and Key Metrics Changes - DTC channel net sales grew by 45.3% year-over-year, reaching CHF 276.9 million, with DTC share increasing to 38.1% from 37.5% [27][28] - Wholesale sales grew by 41.5% year-over-year, reaching CHF 449.7 million [29] - Apparel net sales reached CHF 38.1 million, increasing by 93.1% year-over-year, marking the highest quarterly net sales in history for this category [37] Market Data and Key Metrics Changes - Europe, Middle East, and Africa (EMEA) region grew by 33.6% on a reported basis, reaching CHF 168.6 million [30] - The Americas region saw net sales grow by 32.7% year-over-year to CHF 437.4 million [31] - Asia Pacific region experienced significant growth of 130.1% on a reported basis, reaching CHF 120.6 million [32] Company Strategy and Development Direction - The company is committed to maintaining its premium brand positioning and product promise, which is seen as a key differentiator in the market [10] - Focus on continuous product innovation and strategic partnerships to enhance brand awareness and cultural relevance [11][13] - Plans to expand retail presence while maintaining a controlled pace of store openings, aiming for a 10% revenue share from stores [87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's strength and consumer demand, despite macroeconomic uncertainties and potential tariff impacts [42][43] - The company has increased its constant currency growth rate outlook for 2025 to at least 28% [44] - Management emphasized the importance of operational efficiencies and strategic investments to drive long-term sustainable growth [47] Other Important Information - The company announced a leadership transition, with Martin Hoffmann set to become the sole CEO from July 1 [18][21] - The company has been recognized as the most innovative company in the design category by Fast Company for its LightSpray technology [15] Q&A Session Summary Question: Brand awareness and growth drivers in the Americas - Management highlighted that brand campaigns have significantly increased brand awareness, with strong growth continuing into April [51][52] Question: Improved constant currency growth outlook - Management confirmed that the outlook reflects strong growth across all regions and channels, with e-commerce and retail driving significant growth [62][66] Question: Mitigation efforts for tariff impacts - Management stated that the outlook assumes current tariffs and emphasized the brand's ability to increase prices to mitigate impacts [71][73] Question: Success of the apparel offering - Management noted that harmonized sizing and targeted campaigns have driven success in apparel, with strong performance in running, training, and tennis categories [78][80] Question: Store rollout performance - Management reported that 18 out of 20 stores outside China exceeded expectations, contributing positively to the brand's premium positioning [84][86] Question: Wholesale channel growth outlook - Management confirmed that the outlook for wholesale growth remains unchanged, with a focus on controlled expansion and maintaining inventory clarity [106][108]

Financial Data and Key Metrics Changes - Net sales reached CHF 726 million, reflecting a year-over-year growth of 40% on a constant currency basis, marking the highest quarterly net sales in the company's history [6][24] - Gross profit margin increased to 59.9%, up from 59.7% in Q1 2024, driven by an increased direct-to-consumer (DTC) share [36] - Adjusted EBITDA margin for Q1 reached 16.5%, up from 15.2% in the same period last year [37] - Net income was CHF 56.7 million, despite a sizable unrealized foreign exchange loss [38] Business Line Data and Key Metrics Changes - DTC channel net sales grew by 45.3% year-over-year, reaching CHF 276.9 million, with DTC share increasing to 38.1% [24] - Wholesale sales grew by 41.5% year-over-year, reaching CHF 449.7 million [27] - Apparel net sales reached CHF 38.1 million, increasing by 93.1% year-over-year, marking the highest quarterly net sales in history for this category [34] Market Data and Key Metrics Changes - Europe, Middle East, and Africa (EMEA) region grew by 33.6% year-over-year, reaching CHF 168.6 million [28] - The Americas saw net sales growth of 32.7% year-over-year, totaling CHF 437.4 million [29] - Asia Pacific region experienced a remarkable growth of 130.1% year-over-year, reaching CHF 120.6 million [30] Company Strategy and Development Direction - The company is committed to maintaining its premium brand positioning and product promise, which is seen as a key differentiator in the market [8][41] - Focus on continuous product innovation and strategic partnerships to enhance brand awareness and cultural relevance [12][14] - Plans to expand retail presence while maintaining a controlled pace in store openings, aiming for 20 to 25 new stores annually [84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's strong momentum and consumer demand, despite macroeconomic uncertainties and potential tariff impacts [40][41] - The company has increased its constant currency growth rate outlook for 2025 to at least 28%, projecting reported net sales to reach at least CHF 1 billion [42] - Management emphasized the importance of operational efficiencies and strategic investments to drive long-term sustainable growth [44] Other Important Information - The company announced a leadership transition, with Martin Hoffmann stepping into the role of sole CEO from July 1 [16] - The introduction of innovative products like LightSpray is expected to define the future of sportswear and enhance operational capabilities [14][15] Q&A Session Summary Question: Brand awareness and growth drivers in the Americas - Management highlighted that brand efforts and campaigns have significantly increased brand awareness, contributing to strong growth in the Americas [48][49] Question: Improved constant currency growth outlook - Management confirmed that all regions are performing well, with strong growth expected across all channels [58][60] Question: Mitigation efforts for tariff impacts - Management stated that the outlook assumes current tariffs and emphasized the brand's ability to increase prices to mitigate impacts [68][70] Question: Success of the apparel offering - Management noted that harmonized sizing and targeted campaigns have driven significant success in the apparel category [74][76] Question: Store rollout performance - Management reported that 18 out of 20 stores outside China have exceeded expectations, contributing positively to revenue and margins [82][84] Question: Wholesale channel outlook - Management indicated that there are no cancellations in the wholesale order book and that demand remains strong [100][101] Question: Changes in strategy with leadership transition - Management reassured that the strategy remains unchanged and that the internal team is strong and capable [107]

Company Performance - On Holding (ONON) reported quarterly earnings of $0.23 per share, missing the Zacks Consensus Estimate of $0.24 per share, and down from $0.38 per share a year ago, representing an earnings surprise of -4.17% [1] - The company posted revenues of $808.1 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.76%, compared to year-ago revenues of $581.41 million [2] - Over the last four quarters, On Holding has surpassed consensus EPS estimates just once, but has topped consensus revenue estimates three times [2] Stock Performance and Outlook - On Holding shares have lost about 6.3% since the beginning of the year, while the S&P 500 has declined by -0.6% [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the coming quarter at $0.29 on revenues of $835.81 million, and $1.18 on revenues of $3.4 billion for the current fiscal year [7] - The current Zacks Rank for On Holding is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Retail - Apparel and Shoes industry, to which On Holding belongs, is currently in the bottom 39% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Genesco (GCO), another company in the same industry, is expected to report a quarterly loss of $2.06 per share, with revenues projected at $463.91 million, reflecting a year-over-year increase of 1.4% [9]

Core Viewpoint - On Holding AG (ONON) is expected to report its first-quarter 2025 results on May 13, with earnings per share estimated at 24 cents, reflecting a 36.8% decline from the previous year, while revenues are projected to increase by 34% to approximately $778.9 million [1][2]. Group 1: Earnings Performance - ONON has beaten the Zacks Consensus Estimate in two of the last four quarters, with an average surprise of 45.6% [1]. - The earnings per share estimate for the first quarter indicates a significant decline compared to the same quarter last year [2]. Group 2: Revenue Expectations - The consensus revenue estimate for the first quarter is nearly $778.9 million, suggesting a 34% increase from the previous year's figure [2]. Group 3: Factors Influencing Performance - The company's performance is anticipated to benefit from strong direct-to-consumer traction, global expansion, and ongoing product innovation, particularly among younger consumers [3]. - Key product launches, including Cloudmonster, Cloudsurfer, and Cloud 6, are expected to support the company's performance [3]. Group 4: Direct-to-Consumer Strategy - ONON's direct-to-consumer strategy, which includes retail and e-commerce, is a primary growth driver, supported by high brand engagement and creative marketing campaigns [4]. - The company has leveraged significant marketing initiatives, including a Super Bowl advertisement featuring Roger Federer and Elmo, to enhance traffic and conversion rates [4]. Group 5: Geographic Performance - The Asia-Pacific region, especially China, Japan, and Southeast Asia, has shown accelerated growth due to retail expansion and targeted campaigns [5]. - In Europe, brand-building efforts and a strong retail presence in cities like Paris and Milan have contributed to performance, while in the Americas, premium positioning and selective partnerships have fueled growth [5]. Group 6: Cost Considerations - Increased investments in brand marketing and technology infrastructure may have impacted margins, alongside transitional costs from a new automated warehouse in Atlanta [6]. - Foreign exchange fluctuations, particularly between the U.S. dollar and Swiss franc, could also affect margins in the first quarter [6]. Group 7: Earnings Prediction Model - The model predicts an earnings beat for ONON, supported by a positive Earnings ESP of +4.17% and a Zacks Rank of 3 [7].