Financial Data and Key Metrics Changes - The company reported net sales of CHF 749.2 million, representing a 38% increase on a constant currency basis and a 32% increase on a reported basis year-over-year [6][32] - The gross profit margin expanded to 61.5%, an increase of 160 basis points year-over-year, while the adjusted EBITDA margin reached 18.2%, up 220 basis points year-over-year [7][41] - Adjusted EBITDA was CHF 136.1 million, reflecting strong operational performance and top-line growth [43] Business Line Data and Key Metrics Changes - Direct-to-consumer (D2C) sales reached CHF 308.3 million, up 54.3% year-over-year at constant currency, elevating the D2C mix to 41.1% of total sales [32] - The apparel business saw net sales grow by 75.5% at constant exchange rates, reaching CHF 36.7 million, indicating strong consumer engagement [40] - Net sales from shoes grew by 36% at constant exchange rates, with notable demand in both performance and lifestyle categories [39] Market Data and Key Metrics Changes - EMEA region net sales grew by 46.1% year-over-year at constant currency, reaching CHF 197.8 million, marking the strongest growth in two years [35] - The Americas experienced a 23.6% increase in net sales at constant currency, totaling CHF 432.3 million [36] - The APAC region delivered triple-digit growth of 110.9% year-over-year, with net sales reaching €119.2 million [38] Company Strategy and Development Direction - The company aims to build resilience in its product portfolio and expand its presence in multiple sports, transitioning from running to include trail, outdoor, tennis, and training [12][20] - The strategic focus includes enhancing brand perception and expanding the apparel line, with plans for high-profile product launches and collaborations [11][29] - The company is committed to innovation in manufacturing, exemplified by the launch of the Light Spray factory, which aims to streamline production processes [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's momentum and growth potential, citing strong performance across all regions and product categories [25][50] - The company anticipates continued strong demand despite potential macroeconomic challenges, with an increased guidance for net sales growth to at least 31% year-over-year [50][51] - Management emphasized the importance of maintaining premium positioning and investing in long-term growth initiatives [52][53] Other Important Information - The company has been recognized as one of the world's 50 most innovative companies by Fast Company, highlighting its commitment to technological advancements [18] - The company ended the quarter with a cash balance of CHF 846.6 million, down from CHF 871.8 million, primarily due to foreign exchange impacts [47] Q&A Session Summary Question: What gives confidence to raise constant currency sales growth guidance despite potential tariff impacts? - Management highlighted strong brand momentum and growth across all regions and product categories, with July being the strongest month in the brand's history [57][58] Question: Can you discuss the expected revenue growth trends in wholesale and D2C for the second half? - Management noted that while they expect some deceleration, the focus remains on durable, high-quality growth, with strong performance in D2C channels [68][70] Question: What are the levers for additional margin expansion given current performance? - Management indicated opportunities for increased gross profit margin through a higher D2C mix, economies of scale, and continued investment in brand-building initiatives [72][74] Question: Can you elaborate on the impact of new product launches on future momentum? - Management expressed excitement about the ongoing development of franchises and the introduction of new products, which are expected to sustain momentum into 2026 [79][83] Question: How is the company managing working capital and inventory levels? - Management reported improvements in demand and supply planning, allowing for lower inventory levels while meeting consumer demand effectively [85][87]

Financial Data and Key Metrics Changes - The company reported net sales of CHF 749.2 million, representing a 32% year-over-year increase on a reported basis and a 38.2% increase on a constant currency basis [31][29] - Adjusted EBITDA reached CHF 136.1 million, translating to an adjusted EBITDA margin of 18.2%, up 220 basis points year-over-year [41][30] - Gross profit margin increased by 160 basis points year-over-year to 61.5%, driven by a higher D2C share and lower freight expenses [39][40] Business Line Data and Key Metrics Changes - The Direct-to-Consumer (D2C) channel saw net sales of CHF 308.3 million, up 54.3% year-over-year at constant currency [31] - The apparel business delivered net sales growth of 75.5% at constant exchange rates, reaching CHF 36.7 million [38] - Net sales from shoes grew 36% at constant exchange rates, with strong demand across both Performance and Lifestyle portfolios [37] Market Data and Key Metrics Changes - EMEA region net sales grew by 46.1% year-over-year on a constant currency basis, reaching CHF 197.8 million [34] - The Americas saw net sales growth of 23.6% on a constant currency basis, totaling CHF 432.3 million [35] - The APAC region experienced triple-digit growth, with net sales up 110.9% year-over-year, translating to CHF 119.2 million [36] Company Strategy and Development Direction - The company aims to be the most premium global sportswear brand, focusing on innovation, quality, and customer experience [50][51] - A strategic emphasis on building a balanced portfolio with nine distinct footwear franchises, each contributing over 5% to the top line [9][80] - The company is expanding its apparel business and enhancing its relevance as a full sportswear brand, with plans for new product launches and collaborations [10][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's momentum and the ability to navigate macroeconomic challenges, including tariffs [64][62] - The company anticipates continued strong performance in Q3 and has raised its full-year guidance for net sales growth to at least 31% year-over-year [48][47] - Management highlighted the importance of maintaining a premium brand position and investing in long-term growth initiatives [50][51] Other Important Information - The company opened its first retail store in Singapore, which achieved high sales during its opening weekend [27] - The launch of the LightSpray factory in Zurich represents a significant innovation in manufacturing processes [18] - The company has a strong cash position of CHF 846.6 million, despite a decrease from the previous quarter [44] Q&A Session Summary Question: What gives you the confidence to raise your constant currency sales growth guidance for the year? - Management cited strong brand momentum globally, with significant growth across all regions and product categories, and a strong order book for Q3 [56][58] Question: Can you talk about the second half constant currency revenue growth and trends in wholesale and DTC? - Management emphasized the importance of durable, high-quality growth and indicated that they are well-positioned for continued momentum in both channels [68][70] Question: What are the levers for additional margin expansion given current performance? - Management highlighted opportunities for increased gross profit margin through a higher D2C mix, economies of scale, and continued investment in brand-building initiatives [71][72] Question: Can you expand on the gross margin outlook for the year? - Management expressed confidence in maintaining gross profit margins above 60%, supported by price increases and operational efficiencies [92][93] Question: How is the apparel strategy evolving? - Management noted strong consumer engagement in apparel, driven by direct-to-consumer channels and collaborations with influencers, and plans to continue expanding this category [96][97]

Group 1 - On Holding (ONON) reported a quarterly loss of $0.11 per share, which was better than the Zacks Consensus Estimate of $0.24, and a decline from earnings of $0.16 per share a year ago, resulting in an earnings surprise of -145.83% [1] - The company posted revenues of $907.78 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 6.69%, and showing a significant increase from year-ago revenues of $627.66 million [2] - Over the last four quarters, On Holding has surpassed consensus revenue estimates four times, but has only exceeded EPS estimates once [2] Group 2 - On Holding shares have declined approximately 16.5% since the beginning of the year, contrasting with the S&P 500's gain of 8.4% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.34 on revenues of $925.96 million, and for the current fiscal year, it is $1.12 on revenues of $3.53 billion [7] Group 3 - The Zacks Industry Rank indicates that the Retail - Apparel and Shoes sector is currently in the bottom 42% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - The estimate revisions trend for On Holding was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Core Viewpoint - The Swiss sportswear company On reported a 32% increase in sales for the second quarter, prompting an upward revision of its full-year revenue guidance despite facing new tariffs on imports from Vietnam [1][2]. Financial Performance - Full-year sales are now expected to reach 2.91 billion Swiss francs ($3.58 billion), an increase from the previous forecast of 2.86 billion francs ($3.52 billion), aligning with Wall Street expectations [1]. - The company's gross margin guidance has been raised to a range of 60.5% to 61%, up from the previous range of 60% to 60.5% [2]. - In the second quarter, On reported a net loss of 40.9 million francs ($50.4 million) or 12 cents ($0.15) per share, compared to a net income of 30.8 million francs ($37.9 million) or 10 cents ($0.12) per share in the same period last year, primarily due to foreign exchange fluctuations [4]. Sales and Revenue Breakdown - Sales for the second quarter reached 749 million francs ($922 million), a 32% increase from 568 million francs ($699 million) a year earlier [5]. - Wholesale revenue was 441 million francs ($543 million), exceeding estimates of 429 million francs ($528 million), while direct sales were 308 million francs ($379 million), surpassing expectations of 279 million francs ($344 million) [7]. - Sales growth was reported across all regions, with notable performance in the Americas, Europe, the Middle East and Africa, and the Asia-Pacific region [8]. Market Position and Strategy - On has consistently grown sales in the mid-double digits and aims to increase brand awareness in various global markets [6]. - The company has strategically balanced direct sales through its own channels and wholesale, filling the gap left by Nike's reduced presence in wholesale [6]. - The CEO highlighted strong consumer demand in the American and Chinese markets, with a 50% same-store growth in retail and even larger growth in e-commerce [9][10].

Group 1 - On Holding AG (NYSE: ONON) is set to report its second quarter results on August 12th, with the stock having increased approximately 150% since its low in 2022 [1] - TQP Research focuses on a value-oriented investment approach, identifying businesses that align with long-term success criteria established by notable investors like Warren Buffett and Charlie Munger [1] - The investment topics covered by TQP Research include market analysis, macroeconomic trends, large-cap blue chip companies, and undervalued micro-cap and small-cap stocks [1] Group 2 - TQP Research actively engages with the community and encourages questions or ideas from members [1] - The article does not contain any stock or derivative positions in the companies mentioned, nor does it plan to initiate any such positions within the next 72 hours [1] - The article expresses the author's opinions and is not compensated for it, aside from Seeking Alpha [1]

Company Overview - On Holding (ONON) closed at $45.16, reflecting a -3.52% change from the previous day, underperforming the S&P 500's daily loss of 0.08% [1] - Prior to the latest trading session, shares had decreased by 13.51%, contrasting with the Retail-Wholesale sector's gain of 1.16% and the S&P 500's gain of 1.21% [1] Upcoming Earnings - The earnings report for On Holding is anticipated on August 12, 2025, with an expected EPS of $0.24, indicating a 50% increase from the same quarter last year [2] - Revenue is projected to be $845.21 million, representing a 34.66% rise compared to the equivalent quarter last year [2] Full-Year Estimates - Zacks Consensus Estimates forecast earnings of $1.12 per share and revenue of $3.51 billion for the full year, reflecting year-over-year changes of +1.82% and +33.23%, respectively [3] - Recent changes in analyst estimates are crucial as they often indicate the latest business trends and analysts' outlook on the company's health and profitability [3] Valuation Metrics - On Holding has a Forward P/E ratio of 41.98, which is a premium compared to the industry average Forward P/E of 17.28 [6] - The company also has a PEG ratio of 2.04, higher than the Retail - Apparel and Shoes industry average PEG ratio of 1.87 [7] Industry Context - The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector and currently holds a Zacks Industry Rank of 193, placing it in the bottom 22% of over 250 industries [8] - The Zacks Industry Rank evaluates the strength of industry groups based on the average Zacks Rank of individual stocks, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [8]

Investment Rating - The report maintains a "Positive" investment rating for the textile, apparel, and luxury goods industry [11]. Core Insights - Revenue performance in Q1 2025 shows divergence among brands, with On (+40%) and Adidas (+13%) performing well, while Nike (-7%) and Under Armour (-11%) face revenue declines due to weak demand and inventory adjustments [6][20]. - The cautious revenue guidance from key companies indicates a continuation of this divergent performance in upcoming quarters, with some brands canceling their full-year guidance [7][25]. - The industry is entering a replenishment phase, but weak end-consumer demand necessitates close monitoring of recovery trends [9][34]. Revenue Performance - In Q1 2025, On and Adidas exhibited strong revenue growth, while Nike and UA struggled with declines [6][18]. - The overall revenue growth rates varied significantly across regions, with North America and Greater China showing relative weakness [20][22]. Inventory Dynamics - The apparel industry has returned to a healthy inventory level but is now entering a replenishment phase, with some brands beginning to accumulate stock [8][9]. - Retailers' inventory-to-sales ratios are normal, but certain brands are still in a destocking phase, particularly Nike and VF [8][9]. Future Outlook - The report emphasizes the need to monitor the pace of consumer demand recovery, especially as the industry faces challenges from weak demand and inflationary pressures [9][34]. - Nike's gradual operational improvement may alleviate some negative pressures on the industry, suggesting potential for a rebound in the manufacturing sector [9][34].

Core Viewpoint - On Holding (ONON) is expected to report a year-over-year increase in earnings and revenues for the quarter ended June 2025, with a consensus outlook indicating potential stock price movements based on actual results compared to estimates [1][2]. Earnings Expectations - The consensus estimate for On Holding's quarterly earnings is $0.24 per share, reflecting a year-over-year increase of +50% [3]. - Expected revenues for the quarter are $845.21 million, which represents a 34.7% increase from the same quarter last year [3]. Estimate Revisions - Over the last 30 days, the consensus EPS estimate has been revised 3.01% lower, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for On Holding is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +8.51%, suggesting recent bullish sentiment among analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP reading is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - However, On Holding currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat despite the positive Earnings ESP [12]. Historical Performance - In the last reported quarter, On Holding was expected to post earnings of $0.24 per share but delivered $0.23, resulting in a surprise of -4.17% [13]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [14]. Conclusion - While On Holding is not positioned as a compelling earnings-beat candidate, investors should consider other factors influencing stock performance ahead of the earnings release [17].

Core Insights - The market is currently near all-time highs, making it crucial for investors to analyze fundamental data, particularly business and consumer data, to understand sector performance [1] Consumer Sector - Consumer confidence has unexpectedly risen, creating potential opportunities in the retail sector, with companies like Nike Inc., On Holding, and Ross Stores likely to benefit [2] - Nike's stock has increased by 40% over the past quarter, indicating strong consumer sentiment and market confidence [5] - On Holding is positioned as a growth opportunity, with analysts projecting a 70% increase in earnings per share (EPS) by Q4 2025 [10] - Ross Stores is seen as a value play, attracting institutional investment due to its strong business model in a tight economic environment [12][13] Company-Specific Insights - **Nike Inc.**: - Current stock price is $76.74 with a 12-month forecast of $78.22, indicating a 1.93% upside potential [4] - Analysts have upgraded Nike's stock rating to Overweight, with a new price target of $93, suggesting a potential upside of 20% [7] - **On Holding**: - Current stock price is $50.69 with a 12-month forecast of $64.00, indicating a 26.26% upside potential [9] - The stock is expected to see significant EPS growth, with a P/E ratio of 74x, well above the retail sector average [10] - **Ross Stores**: - Current stock price is $138.48 with a 12-month forecast of $159.06, indicating a 14.86% upside potential [12] - The company has a price-to-book (P/B) ratio of 8.4x, reflecting strong market confidence in its financial stability [14]

Group 1 - The core viewpoint of the articles emphasizes the implementation of consumption-boosting initiatives in China, focusing on the establishment of flagship stores and the introduction of international and local brands to stimulate economic growth [1][2][3] - The "first store economy" is highlighted as a new consumption model that integrates urban renewal and consumption upgrades, with significant contributions to local economies [3][5] - Beijing has seen a surge in the opening of first stores, with 400 new stores established in the first five months of the year, and a total of 2,372 first stores expected by the end of 2024 [3][2] Group 2 - Shanghai is attracting international sports brands to set up their first stores, enhancing consumer experience through innovative service offerings like professional fitness assessments [5][6] - The city has implemented supportive policies to streamline the process for first stores, including financial incentives for high-level stores, resulting in 173 new stores in the first quarter of 2025 [6][7] - Chongqing is focusing on linking first stores with the night economy, targeting young consumers and introducing over 140 new stores by mid-2025 [7][8] Group 3 - The articles discuss the importance of creating new consumption scenarios and fostering a complete ecosystem for brand development, emphasizing the need for policies that support long-term operations of first stores [8] - The integration of diverse brands and innovative retail concepts is seen as a way to attract consumers and enhance the vibrancy of commercial districts [2][4] - The overall trend indicates a growing competition among cities to attract first stores, which is viewed as a vital component of economic revitalization [1][3]