On Holding to Report Q1 Earnings: What's in Store for the Stock?

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].