Investment Rating - The report assigns a rating of "Outperform" for On Holdings AG, indicating an expected total return over the next 12-18 months that exceeds the relevant market benchmark [19]. Core Insights - For FY2025, On Holdings AG achieved record high revenue and gross margin, with net sales surpassing CHF 3 billion for the first time, reflecting a 30% year-on-year increase in reported currency and a 35.6% increase in fixed currency [2][8]. - The company raised its full-year guidance for 2026, projecting at least a 23% increase in net sales at fixed currency, with a compound annual growth rate of at least 30.5% from 2023 to 2026 [5][11]. - The DTC (Direct-to-Consumer) channel's share rose to 41.8%, up 110 basis points year-on-year, indicating strong growth across various regions, particularly in APAC [2][8]. Summary by Sections Financial Performance - In FY2025, net profit was CHF 203 million, down 15.9% year-on-year, while gross margin reached 62.8% and adjusted EBITDA margin hit a record high of 18.8% [2][8]. - For Q4 FY2025, net sales reached CHF 743.8 million, a 22.6% increase year-on-year, with a gross margin of 63.9%, up 180 basis points from the previous year [3][9]. Regional Performance - The Americas, EMEA (Europe, Middle East, and Africa), and APAC regions all showed robust expansion, with APAC being the standout performer, achieving a 70.8% increase in net sales in reported currency [4][10]. - By region, net sales in the Americas totaled CHF 434.3 million, up 12.8% in reported currency, while EMEA reached CHF 183 million, up 24.2% [10]. Product Categories - Multi-category expansion significantly contributed to performance growth, with apparel sales increasing by 75.5% and accessories by 135.1% on a fixed currency basis [2][8]. - Footwear net sales reached CHF 687.3 million, reflecting a 20.8% increase in reported currency, driven by high-performance running shoes and popular product lines [10].

Investment Rating - The report assigns a rating of "Outperform" for On Holdings AG, indicating an expected total return over the next 12-18 months that exceeds the return of its relevant broad market benchmark [19]. Core Insights - For FY2025, On Holdings AG achieved record high net sales exceeding CHF 3 billion, with a reported currency increase of 30% year-on-year and a fixed currency increase of 35.6%. The gross margin reached 62.8%, and adjusted EBITDA margin hit a historical high of 18.8%. However, net profit declined by 15.9% year-on-year to CHF 203 million [2][8]. - The company raised its full-year guidance for 2026, expecting net sales to increase by at least 23% at fixed currency, with a compound annual growth rate of at least 30.5% from 2023 to 2026. The gross margin is projected to rise to at least 63% compared to 2025, driven by brand appeal and operational efficiency [5][11]. Summary by Sections Financial Performance - In FY2025, net sales reached CHF 3.0 billion, with a gross margin of 62.8% and adjusted EBITDA margin of 18.8%. Net profit was CHF 203 million, down 15.9% year-on-year. Cash reserves exceeded CHF 1 billion, and inventory stood at CHF 419.8 million [2][8]. - For Q4 FY2025, net sales were CHF 743.8 million, a 22.6% increase year-on-year, with a gross margin of 63.9%, up 180 basis points from the previous year [3][9]. Regional Performance - The Americas, EMEA, and APAC regions all showed robust expansion. DTC channel sales grew approximately 20%, with APAC being the core growth engine, achieving a 70.8% increase in net sales [4][10]. - By region, net sales in the Americas totaled CHF 434.3 million, up 12.8% at reported currency. EMEA net sales reached CHF 183 million, up 24.2%, while APAC net sales hit CHF 126.5 million, up 70.8% [10]. Future Outlook - The company anticipates that DTC business will outpace wholesale business, with apparel sales expected to grow significantly faster than the overall level. The reported net sales target for 2026 is at least CHF 3.44 billion [5][11]. - The company expects a gross margin for FY2026 to hit a new record high, with an adjusted EBITDA margin forecasted between 18.5% to 19% [11].

Group 1 - The core viewpoint is that Chinese apparel brands are still in the layout phase for overseas expansion, lacking significant scale and brand influence [1] - Key factors for successful overseas expansion include financial strength, domestic brand influence, and product capability [1] - National policies are supportive of the industry going global, encouraging brands to expand into international markets to enhance global competitiveness [1] Group 2 - Effective paths for international brands to enhance global competitiveness include product R&D, DTC (Direct-to-Consumer) strategies, and differentiation [2] - Examples of successful international brands include Lululemon and Nike, which leverage unique product offerings and strong marketing strategies to build global influence [2] - DTC channels are emphasized by international brands to establish direct connections with local consumers, improving shopping experiences and brand image [2] Group 3 - Anta Sports' acquisition of Amer Sports has led to significant revenue growth in various regions, with compound annual growth rates of 8.79% in EMEA and 59.16% in Greater China from 2020 to 2024 [3] - Successful strategies for Anta include diversifying equity, simplifying operations, focusing on core brands, and executing DTC strategies effectively [3] - Shein targets the overseas mid-to-low consumer market, utilizing a robust domestic supply chain to offer affordable apparel [3] Group 4 - Current apparel brands are intensifying their overseas channel layouts to expand into emerging markets, with a clear strategic plan for global outreach [4] - Sports apparel brands have leveraged high-cost performance products and sponsorships to enhance international brand marketing and influence [4] - Chinese apparel brands are expected to continue increasing their overseas presence, particularly in Southeast Asia, the Middle East, and Europe and America [4] Group 5 - Brands need to adopt a steady approach to overseas strategies, recognizing their strengths while addressing weaknesses, particularly in brand storytelling and heritage [5] - The rise of national cultural confidence has increased the overseas recognition of traditional Chinese cultural products, such as Hanfu and silk [5] - Future development may focus on integrating traditional cultural elements into apparel design while aligning with local trends to enhance international consumer acceptance [5]