On Holding: First Take

Research evidence excerpt

J P M O R G A N

Europe Equity Research

11 August 2026

On Holding

First Take

Overweight

ONON, ONON US

Price (10 Aug 26):$38.78

Price Target (Dec-27):$51.00

Our Take: On's Q2-26 results came in below expectations driven by softer growth

in wholesale sell-in and in the Americas region. Sales were up 22% ex-FX (vs

JPMe and BBG cons: +24%), driven by a better DTC growth at 34% ex-FX (JPMe

+30%, cons +29%), but significantly softer wholesale at +13% (JPMe and cons

+20%). While On has previously cautioned that Q2 sell-in will likely be softer,

driven by conservative sell-in ahead of key product launches in Q3, the scale of the

deceleration is still likely to disappoint. By region, the all-important Americas

region was +13% (JPMe +15%), while EMEA was +21% (JPMe +20%) and APAC

was +55% (JPMe +65%). On the P&L, gross margin was higher than our estimates

at 65.4% (JPMe +64.8%,cons +63.9%), but the scale of the topline miss still led

to a slight gross profit miss (3% below JPMe). Adj EBITDA was 3% below cons

and 10% below our estimates. In terms of the outlook, On slightly lowered full year

sales guidance, now expecting topline to grow "low 20s" ex-FX (versus +23% exFX previously), slightly increased full year GM guidance to “at least 65%” (vs “at

least 64.5%” previously), while maintaining adj EBITDA guidance at “19.5% to

20.0%”. Our discussions with investors suggest that the topline trajectory

continues to be the most important element of On’s equity story. We expect shares

to react negatively first thing today given the Q2 topline miss and FY26 topline

guidance cut.

Noteworthy Areas: 1) Q2 Group sales were +22% ex-FX/+13% yoy reported

to CHF850m, missing our expectations of +24% ex-FX/CHF885m and

Bloomberg cons. of CHF881m; 2) By distribution channels, DTC

outperformed at +34% ex-FX (vs. JPMe +30%), but this was not enough to

offset the miss in Wholesale, which came in at +13% ex-FX (JPMe +20%); 3)

By region, APAC remained the fastest growing, up 55% ex-FX (vs. JPMe

+65%), albeit missing our estimates. Performance in EMEA was robust and in

line with our expectations at +21% (vs. JPMe +20%), while Americas missed

our expectations at +13% (vs.…