Dilok Klaisataporn Introduction On Holding (NYSE:ONON), often referred to as On Clouds due to its product line-up, is an appealing brand offering premium footwear and sports apparel products that have been gaining in popularity in the past few years. The absolute size of the company compared to its industry peers including Nike (NKE) and Lululemon (LULU) is far smaller, yet I believe a potential investment in On Holdings is attractive. On Holdings is not only an extremely fast-growing company with a str ...

On Holding AG (NYSE: ONON) has lost nearly 10% over the past three weeks but a UBS analyst is convinced it’s positioned for a massive rally in 2024.On Holding stock is headed for $51Copy link to sectionJay Sole named the shoe company a top pick for this year on Tuesday and said its shares could climb to $51 which suggests a whopping 80% upside from here. The analyst expects On Holding to grow its per-share earnings at an annualised compound rate of 43% over the next five years. His research note also reads: ...

On Holding (ONON -0.96%) has taken investors on a wild ride since its IPO. The Swiss footwear and sportswear maker went public at $24 in September 2021, and its shares soared to an all-time high of $51.45 just two months later.But over the following two years, On's stock lost nearly 50% of its value as rising rates and other macro headwinds crushed the market's pricier growth stocks.Let's see why that sell-off might represent a buying opportunity for patient investors. How did On carve out its high-growth n ...

Orbon Alija Following our initiation of coverage of On Holding AG (NYSE: NYSE:ONON), today we are back to comment on the company results based on the Nike Q2 2024 readout and the latest news on the Sporting Goods sector. In this update, there are at least three takes on the read across from Nike's September-November results that we should take into consideration. Nike Positive Implications Firstly, Nike inventories were down by 14% on a year-on-year basis. This implied that inventory days are now align ...

Orbon Alija I started to notice more and more people at my gym and around Boston wearing On Holding AG (ONON) sneakers at the beginning of 2022. Sneakers that only hard-core runners wore were now all over the place, including people of all ages. I bought my first pair of On sneakers sometime in the Spring of 2022; now I have nine pairs, with my Cloudmonster's being my favorite sneaker in my collection (~80 pairs). FWIW, those are NoBull sneakers below my On and Hoka sneakers above them — these are two o ...

When investors think of athletic apparel brand names, Nike is often the first that comes to mind. And rightfully so. After all, it's the single biggest name in the business, having dominated the market since the 1980s.For investors, though, everything is relative. While being big certainly has its advantages, sometimes it's the smaller, newer names in an industry offering up the better growth opportunities.That's the crux of the bull case for high-end sports apparel name On Holding (ONON -3.71%) right now. ...

Shares of fast-moving running shoe upstart On Holding (ONON -6.16%) had a solid 2023, rallying some 80% with just a couple of weeks to go in the year and steadily clawing their way back to their price at the initial public offering (IPO) in late 2021.The Swiss company put up impressive numbers in spite of pressure mounting on the global consumer, and investors have been pleased with management's goals through 2026. Nevertheless, this remains a richly valued shoe stock, one that assumes On Holding sails past ...

On Holding AG (NYSE:ONON) Q1 2023 Earnings Conference Call May 16, 2023 8:00 AM ET Jerrit Peter - Investor Relations Caspar Coppetti - Executive Co-Chairman and Co-Founder Martin Hoffman - Chief Financial Officer and Co-Chief Executive Officer Marc Maurer - Co- Chief Executive Officer Conference Call Participants Abbie Zvejnieks - Piper Sandler Aubrey Tianello - BNP Paribas Jay Sole - UBS Cristina Fernandez - Telsey Advisory Group James Duffy - Stifel Alexandra Straton - Morgan Stanley Tom Nikic - Wedbush S ...

Retail Operations - The company operates approximately 9,232 retail stores across its direct markets as of December 31, 2022[47]. - For the year ended December 31, 2022, 60.4% of sales were to customers in North America, 29.0% in Europe, and 6.6% in Asia[65]. - The company has opened four retail stores in New York City, Tokyo, Zurich, and Los Angeles, with plans for future store openings, which may incur significant capital expenditures[98]. - The company leases all retail stores under long-term operating leases, with initial terms of five to ten years, and may face challenges in securing appropriate real estate or lease terms for future growth[100][101]. - The company faces risks related to opening new retail stores, including identifying suitable markets and managing pre-operating costs[97]. Financial Performance - The company generated a net income of CHF 57.7 million for the year ended December 31, 2022, but incurred net losses of CHF 170.2 million and CHF 27.5 million for the years ended December 31, 2021 and 2020, respectively[64]. - The company may incur significant losses in the future due to unforeseen expenses and challenges in maintaining profitability[64]. - The financial health of retail partners and customers may adversely affect the company's sales and financial condition due to potential bankruptcies and economic uncertainty[80]. - Consumer purchases of discretionary items, including premium footwear and apparel, tend to decline during recessionary periods, impacting sales and profitability[83]. - The company’s financial condition and stock price may be adversely impacted if it fails to innovate and meet consumer expectations[72]. Market Strategy and Growth - The company’s growth strategy includes expanding product offerings and increasing customer engagement through digital platforms[60]. - The company plans to continue significant investments in research and development to drive innovation in footwear, apparel, and accessories[72]. - The company has systematically redesigned key franchises, such as the Cloud and Cloudswift, over the last two years to enhance product offerings[73]. - The company plans to expand its distribution network and sales into new locations outside of the United States and the EU, with distribution agreements with 23 partners in 72 markets as of 2022[122]. - Expansion into new markets may be limited by the company's brand recognition and operational experience in those regions[66]. Supply Chain and Production - The company faces risks related to supply chain compliance, which could lead to recalls or adverse consumer reactions[51]. - The company has experienced significant disruptions in supply due to global supply chain issues, which could negatively impact its ability to meet customer demand and result in lower net sales[103][104]. - In 2022, 95% of the company's footwear products were produced in Vietnam, and 60% of apparel and accessories units were manufactured in Vietnam, indicating a heavy reliance on specific countries for production[115][116]. - The company relies on third-party suppliers for fabrics and components, with limited control over their quality and availability, which increases the risk of supply disruption[118][119]. - The company has secured additional production capacity in 2022, but future restrictions could still impact operations and costs[84]. Competition and Market Risks - The company faces intense competition in the footwear, apparel, and accessories market, which may pressure pricing and impact market share[77]. - The company is vulnerable to changes in consumer preferences, which could impact sales and profitability[59]. - A weak retail environment and shifts in consumer preferences could lead to lower sales and impact the company's financial health[80]. - The introduction of a subscription-based sales model with Cyclon footwear in June 2022 may not be financially viable or well-received by customers[78]. Marketing and Brand Management - The company relies on grassroots marketing efforts and partnerships with premium brand ambassadors to promote its brand[53]. - The company’s ability to connect with consumers through effective marketing strategies is crucial for maintaining brand awareness and driving sales[67]. - The company anticipates that maintaining and enhancing its premium brand may require substantial investments in product design, marketing, and operations[45]. - The company’s brand image may be harmed by negative publicity related to its manufacturing practices or supplier compliance[50]. Environmental and Regulatory Challenges - The company is focusing on eliminating petroleum-based materials, increasing the use of recycled and sustainable materials, such as the 100% recyclable Cyclon shoe made with over 50% bio-based material[121]. - The company’s operations are vulnerable to climate change and environmental risks, which could disrupt supply chains and affect financial performance[136]. - Increased scrutiny from investors regarding environmental, social, and governance (ESG) practices could lead to additional costs and risks, impacting reputation and employee retention[141]. - The company may face increased compliance costs and operational challenges due to new data protection regulations in Switzerland, effective September 1, 2023[178]. Intellectual Property and Legal Risks - The company emphasizes the importance of protecting intellectual property rights, as failure to do so could result in loss of competitive advantage and decreased net sales[143]. - The company relies on a combination of patents, trademarks, and trade secrets to protect its proprietary technologies, including CloudTec and Speedboard[143]. - Certain key patents related to CloudTec technology are set to expire soon, which may reduce competitive advantages in key markets[145]. - The company may increase investments in intellectual property protection, which could be expensive and time-consuming, but necessary for maintaining competitive advantage[154]. Cybersecurity and IT Risks - Cybersecurity threats have escalated, leading the company to invest significantly in IT security measures to protect sensitive information[166]. - The company does not currently maintain a disaster recovery plan, which could hinder recovery from cyber-attacks or data breaches[170]. - Any significant disruption in IT systems could result in operational delays and financial losses[170]. - The company relies on a large number of complex IT systems, and any failure in these systems could disrupt operations and negatively impact scalability and cost savings[180]. Corporate Governance and Shareholder Matters - The dual class structure allows the extended founder team to control approximately 59.7% of the total combined voting power of outstanding shares as of December 31, 2022[214]. - Class B voting rights shares have ten times the voting power of Class A ordinary shares, which may limit shareholder influence on corporate matters[214]. - The company does not intend to pay dividends for the foreseeable future, relying instead on appreciation in the price of Class A ordinary shares for returns[222]. - Recent Swiss corporate law reforms effective January 1, 2023, modernize aspects of corporate governance and strengthen shareholder rights[228].

Market Presence and Sales - As of December 31, 2022, the company's products are available at approximately 9,232 retail stores across its direct markets[48]. - For the year ended December 31, 2022, 60.4% of sales were to customers in North America, with 29.0% in Europe and 6.6% in Asia[64]. - On generated net sales of CHF 1,222.1 million for fiscal year 2022, representing a year-over-year growth of 68.7% compared to CHF 724.6 million in 2021[238]. - The company has a presence in over 60 countries globally, with significant market entries in Germany (2011), the United States (2013), Japan (2013), China (2018), and Brazil (2018)[238]. - The footwear category, which is the company's main product category, accounted for a significant majority of sales in 2022, comprising over 70 styles[58]. Growth Strategy and Innovation - The company’s growth strategy includes expanding product offerings and increasing customer engagement through digital platforms[59]. - The company plans to continue significant investments in research and development to drive innovation and maintain competitiveness in the market[69]. - The company has redesigned key franchises, including the Cloud and Cloudswift, and its entire apparel range over the last two years[70]. - The company emphasizes its innovative CloudTec® technology and commitment to the circular economy in sportswear, contributing to its rapid growth and customer recommendations[236]. - The company’s ability to innovate and introduce new products is essential for attracting and retaining customers[69]. Marketing and Brand Management - The company relies on grassroots marketing efforts and partnerships with premium brand ambassadors to promote its brand, which may require substantial ongoing resources[52]. - The company’s marketing strategy heavily relies on social media and digital marketing, which are crucial for customer acquisition[67]. - The company anticipates that maintaining and enhancing its premium brand may require substantial investments in areas such as product design, marketing, and operations[46]. - The company faces risks related to brand resilience, including potential negative publicity from quality issues and ineffective marketing strategies[46]. - Failure to maintain brand awareness and consumer traffic could negatively impact the company’s business and financial condition[66]. Operational Challenges - The company faces challenges in expanding into new markets due to limited brand recognition and increased operational costs[65]. - The company is vulnerable to changes in consumer preferences, which could adversely affect sales and profitability[58]. - The company may face challenges in entering new markets where consumers may not be willing to pay a premium for its products[48]. - The company has limited experience in managing its direct-to-consumer (DTC) channel, which includes both physical and online retail stores, posing risks to brand awareness and operational efficiency[88]. - The company has incurred significant capital expenditures for opening new stores, which may not be immediately profitable and could lead to initial losses[96]. Supply Chain and Distribution - The company relies heavily on third-party suppliers for fabrics and components, with 95% of footwear produced in Vietnam and 60% of apparel produced in Vietnam in 2022[112][113]. - The company has distribution agreements with 23 partners across 72 markets, indicating a significant reliance on external partners for growth[119]. - Supply chain disruptions due to geopolitical issues, such as the military conflict in Ukraine, have negatively impacted the company's ability to source materials[100][106]. - The COVID-19 pandemic has caused disruptions in the supply chain, affecting manufacturing and distribution, with potential future impacts on operations and financial condition[80]. - The company faces risks related to accurately forecasting product demand, which could lead to excess inventory or shortages, negatively impacting sales and financial performance[90]. Financial Performance and Risks - The company generated a net income of CHF 57.7 million for the year ended December 31, 2022, but incurred net losses of CHF 170.2 million and CHF 27.5 million for the years ended December 31, 2021 and 2020, respectively[63]. - Economic downturns and shifts in consumer behavior could adversely affect the financial health of retail partners and overall sales[77]. - The economic downturn and inflation may adversely affect consumer spending on discretionary items, potentially harming sales and financial condition[79]. - The company’s financial condition could be impacted by risks associated with third-party distribution and supply chain compliance[50]. - Fluctuations in foreign currency exchange rates could adversely affect net sales and operating results, particularly if the U.S. dollar weakens against the Swiss franc[193]. Human Resources and Management - The company faces challenges in attracting and retaining employees due to strong competition in the labor market, particularly in the United States, which may hinder business growth[124]. - The company has faced challenges in hiring and managing an increasing number of employees due to rapid growth, which could strain resources and affect brand image[87]. - The company relies heavily on the continued service of its senior management and leadership team, with potential loss of key individuals posing risks to business operations and goals[120]. - The company has not obtained key person life insurance policies for senior management, exposing it to financial loss if key individuals leave[123]. Legal and Regulatory Compliance - The company is subject to U.S. Foreign Corrupt Practices Act and other anti-corruption laws, with potential violations leading to sanctions and reputational damage[128]. - The company is subject to tax audits in multiple jurisdictions, including Switzerland and the United States, which could result in material additional tax liabilities[200]. - The company does not currently maintain separate cybersecurity insurance, which may leave it vulnerable to financial losses from cyber incidents[168]. - The company is at risk of cyber-attacks and data security incidents, which could lead to significant operational disruptions and financial losses[163]. - Regulatory compliance regarding data privacy, such as the California Consumer Privacy Act (CCPA) and General Data Protection Regulation (GDPR), may impose additional operational costs and legal risks[172][174]. Intellectual Property and Competitive Risks - The company emphasizes the protection of its intellectual property rights, with failure to do so potentially resulting in loss of competitive advantage and decreased sales[139]. - Patent laws are crucial for protecting product technologies, but certain important patents are due to expire soon, potentially reducing competitive advantages[142]. - The company may face challenges to its patents, which could lead to increased competition and harm its business[143]. - The company may face legal proceedings alleging infringement of third-party intellectual property rights, which could be costly and time-consuming[153]. - The company’s ability to maintain competitive advantages may be compromised if it fails to adequately protect its intellectual property rights[147]. Corporate Governance and Shareholder Matters - The dual class share structure allows the extended founder team to control approximately 59.7% of total combined voting power, limiting shareholder influence on corporate matters[211]. - The company does not intend to pay dividends for the foreseeable future, meaning returns on investment will depend on the appreciation of the Class A ordinary shares[220]. - U.S. shareholders may face challenges in enforcing judgments against the company or its executives due to the lack of reciprocal recognition and enforcement of judgments between the U.S. and Switzerland[231]. - The company qualifies as a foreign private issuer, which allows it to avoid certain reporting requirements under the Exchange Act, but losing this status could significantly increase legal and compliance costs[214]. - The company’s reliance on exemptions from NYSE corporate governance standards may limit the influence of independent directors on business policies and affairs[218].