Core Insights - On's Q2 revenue reached 749.2 million Swiss francs, a 32% year-over-year increase, with a 38.2% growth at constant currency [1] - The company reported a net loss of 40.9 million Swiss francs, a decline of 232.7% compared to a profit of 30.8 million Swiss francs in the same period last year [1][2] - Direct-to-consumer (DTC) sales grew by 47.2% to 308.3 million Swiss francs, accounting for a record 41.1% of total sales in Q2 [1][2] Revenue Breakdown - Wholesale channel sales increased by 23.1% to 441 million Swiss francs, or 28.8% at constant currency [2] - Regional sales showed significant growth: EMEA at 42.9%, Americas at 16.8%, and Asia-Pacific at 101.3% [2] - Footwear remains the core category, with sales of 704.9 million Swiss francs, up 29.9%, while apparel and accessories saw increases of 67.5% and 133.3%, respectively [2] Profitability Metrics - Despite revenue growth, the net profit for the first half of 2025 decreased by 87.1% to 15.8 million Swiss francs, with a net margin of 1.1% [4] - The adjusted EBITDA margin for Q2 was 18.2%, up 220 basis points year-over-year, with an absolute adjusted EBITDA of 136.1 million Swiss francs [2][3] Future Guidance - On has raised its full-year 2025 guidance, expecting at least a 31% increase in net sales at constant currency, projecting total sales to reach 2.91 billion Swiss francs [5] - The company anticipates a gross margin between 60.5% and 61%, and an adjusted EBITDA margin of 17% to 17.5%, both higher than previous forecasts [5] Competitive Landscape - HOKA, a competitor, reported a 19.8% revenue growth but faced declining margins due to rising costs and increased operational expenses [6][7] - HOKA's challenges include competition from brands like On and KAILAS, as well as negative consumer feedback regarding product quality and design [7]

Investment Rating - The report maintains a "Buy-A" rating for the company [1][8] Core Views - The company reported a revenue of 28.676 billion yuan for 2024, a year-on-year increase of 3.9%, while the net profit attributable to shareholders was 3.013 billion yuan, a decrease of 5.5% [1][3] - The board proposed a final dividend of 20.73 cents per share, with a payout ratio of 50% for the year [1] - The overall retail sales remained stable, with online channels showing low double-digit growth while offline channels experienced a slight decline [3][4] Revenue and Profit Analysis - In 2024, revenue from footwear, apparel, accessories, and equipment was 14.3 billion, 12.05 billion, 2.325 billion, and a year-on-year growth of 6.8%, -2.9%, and 29.3% respectively [4] - The retail sales for running, fitness, basketball, and sports lifestyle categories accounted for 28%, 15%, 21%, and 33% of total sales, with year-on-year growth rates of 25%, 6%, -21%, and -6% respectively [4] - The company’s gross margin improved to 49.4%, up 1.0 percentage points year-on-year, primarily due to better margins in the e-commerce channel [5][7] Channel Performance - Direct sales revenue decreased by 0.3% to 6.883 billion yuan, with the number of direct stores declining by 13.4% to 1,297 [5] - Wholesale revenue increased by 2.6% to 12.957 billion yuan, with wholesale stores growing by 1.6% to 4,820 [5] - E-commerce revenue grew by 10.3% to 8.305 billion yuan, with significant improvements in customer traffic and conversion rates [5][8] Future Outlook - The company is expected to continue optimizing its channel structure and enhancing customer experience, which will support steady business growth [8] - Projected revenues for 2025-2027 are 29.093 billion, 30.177 billion, and 31.517 billion yuan, with year-on-year growth rates of 1.5%, 3.7%, and 4.4% respectively [8][10]