ZURICH - On Holding AG (NYSE:ONON) has kicked off the financial year 2024 with a significant earnings beat and record net sales, sending its shares up by 4.3%.
The Swiss sportswear company reported first-quarter earnings per share (EPS) of CHF 0.28, outperforming analyst expectations by CHF 0.16. Revenue for the quarter reached CHF 508.2 million, exceeding the consensus estimate of CHF 497.8 million and marking a 20.9% increase year-over-year (YoY).
The company's direct-to-consumer (DTC) channel was a standout performer, with sales surging 39.0% YoY and contributing to a premium gross profit margin of 59.7%, nearing the company's mid-term goal of surpassing 60%. On Holding's strong financial results were underpinned by efficient inventory management and robust demand across all channels, regions, and product categories.
Looking forward, On Holding has provided a positive outlook for the full year 2024, projecting revenue of at least CHF 2.29 billion, which is above the analyst consensus of CHF 2.27 billion. The company also anticipates maintaining a gross profit margin of around 60% and achieving an adjusted EBITDA margin between 16.0% and 16.5%.
Martin Hoffmann, Co-CEO and CFO of On, expressed his enthusiasm for the quarter's performance, stating, "The first quarter was a very strong start to the year and a further step in the execution of our long-term strategy to be the most premium global sportswear brand. We are thrilled to have exceeded our expectations and surpassed the half-billion net sales mark in a single quarter."
The company's success is also reflected in its athletes' achievements, with Hellen Obiri's second consecutive marathon win in Boston underscoring On's growing performance credibility and market share gains among runners worldwide.
Investors have responded positively to the earnings and guidance beat, with the stock price jumping in response to the news. On Holding's continued growth trajectory and strategic focus on expanding its market presence through innovation and athlete partnerships signal a confident and dynamic approach to the sportswear market in 2024.
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