Swiss sneaker company On beats sales estimates, raises guidance despite Vietnam tariffs

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].