On Holding Reports Disappointing Q4 Earnings Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy ONON?
Source: Benzinga
- Earnings Beat: On Holding reported adjusted earnings per share of 31 cents for Q4, surpassing the analyst estimate of 18 cents, yet the stock fell 7.46% amid a broader market sell-off, indicating investor concerns.
- Disappointing Revenue Guidance: The company expects fiscal year 2026 net sales to exceed $4.304 billion, trailing the $4.590 billion analysts had anticipated, suggesting potential growth challenges ahead.
- Record Gross Margin: The fourth-quarter gross profit margin reached 63.9%, up 180 basis points year-over-year, attributed to operational efficiencies and strong full-price execution, highlighting effective cost management strategies.
- Strong Cash Flow: As of December 31, cash and cash equivalents rose 10.3% year-over-year to 1.019 billion Swiss Francs, with net working capital expanding 14.3%, reflecting a robust financial position for the company.
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Analyst Views on ONON
Wall Street analysts forecast ONON stock price to rise
21 Analyst Rating
18 Buy
2 Hold
1 Sell
Strong Buy
Current: 43.910
Low
30.00
Averages
60.79
High
85.00
Current: 43.910
Low
30.00
Averages
60.79
High
85.00
About ONON
On Holding AG is a Switzerland-based company active in athletic sports accesories industry. The Company provides footwear and sports apparel and is engaged in developing and distributing performance sports products, through independent retailers and global distributors. The Company sells its products trough the internet and its own stores.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
On Holding Reports Strong Q4 Earnings Despite Stock Decline
- Sales Growth Exceeds Expectations: On Holding achieved a 30.6% sales growth in Q4, surpassing market expectations, with strong wholesale performance, although direct-to-consumer sales fell slightly short, indicating competitive strength in the market.
- Significant Margin Improvement: The company reported a gross margin of 63.9%, up approximately 180 basis points year-on-year, reflecting structural operational efficiencies and strong full-price execution, despite facing foreign exchange pressures, showcasing solid profitability.
- Optimistic 2026 Sales Guidance: Management's guidance for at least 23% sales growth in 2026 may be conservative, as lighter tariffs could enhance gross margins, boosting market confidence in the company's future performance.
- Negative Market Reaction: Despite On Holding's adjusted EBITDA significantly exceeding consensus estimates, shares fell by 2.94% to $42.62, primarily due to larger-than-expected foreign exchange headwinds projected for 2026, leading to cautious investor sentiment.
See More
On Holding Reports Strong Q4 Earnings but Shares Drop on Conservative Guidance
- Strong Earnings Report: On Holding reported upbeat Q4 earnings, with specific figures not disclosed, but overall performance exceeded market expectations, demonstrating the company's resilience in sales and operations.
- Stock Price Decline: Despite the positive earnings report, the company's conservative guidance led to a significant drop in share price, reflecting investor concerns about future growth and potentially impacting short-term market confidence.
- Analysts Remain Bullish: Despite the negative market reaction, analysts maintain a bullish outlook on On Holding's long-term prospects, believing the company has strong potential in brand building and market expansion, which may attract more investor interest.
- Market Reaction Analysis: The investor response to the conservative guidance indicates uncertainty about future performance, which may prompt the company to reassess its growth strategies to enhance market confidence and stabilize its stock price.
See More
On Holding Reports Strong Q4 Earnings but Disappoints on Revenue Guidance
- Strong Earnings Report: On Holding reported adjusted earnings per share of 31 cents for Q4, surpassing the analyst estimate of 18 cents, indicating improved profitability despite ongoing market challenges.
- Sales Exceed Expectations: The company achieved net sales of $930.66 million for the three months ending December 31, slightly above the consensus forecast of $915.20 million, demonstrating resilience in sales growth even amid a disappointing outlook.
- Disappointing Future Guidance: On Holding expects fiscal year 2026 net sales to exceed $4.304 billion, falling short of the $4.590 billion analysts anticipated, which may impact investor confidence and lead to stock price volatility.
- Analyst Rating Adjustments: Following the earnings announcement, several analysts adjusted their price targets for On Holding, with Guggenheim lowering its target from $59 to $51, reflecting a cautious outlook on the company's future growth prospects.
See More
Global Stock Markets Retreat as Oil Prices Surge
- Market Decline: The S&P 500 index fell by 0.94%, reaching a 3.25-month low, reflecting investor concerns over escalating tensions in Iran, which may impact future investment decisions and market stability.
- Surge in Oil Prices: WTI crude oil prices rose over 4% to an 8.5-month high due to threats from Iran to close the Strait of Hormuz, intensifying fears of energy supply disruptions and potential inflationary pressures in the economy.
- Natural Gas Price Spike: European natural gas prices surged more than 22% to a three-year high after Qatar's Ras Laffan plant was targeted by an Iranian drone attack, posing significant risks to global liquefied natural gas supply and market stability.
- Economic Data Expectations: This week, the ADP employment change is expected to increase by 50,000, while the ISM services index is projected to slip slightly, with markets closely monitoring these indicators to assess economic health and potential implications for Federal Reserve monetary policy decisions.
See More
Wall Street Plummets Amid Escalating Geopolitical Tensions
- Oil Price Surge: The escalating conflict between the U.S., Israel, and Iran has driven West Texas Intermediate crude oil prices up by 6.4% to $75.8 per barrel, marking the largest two-day rally since March 2022, indicating heightened market concerns over energy supply disruptions.
- Market Panic Intensifies: The CBOE Volatility Index surged by 6% to 22.74, reflecting increased investor fear regarding short-term market volatility, with all 11 S&P 500 sectors trading in the red, showcasing widespread market pressure.
- Fed Policy Expectations Shift: Amid rising inflation fears, the 10-year Treasury yield climbed from 3.97% last Friday to approximately 4.06%, leading traders to reprice expectations for Fed rate cuts, now anticipating fewer chances of cuts in 2026.
- Strong Dollar Impact: The U.S. dollar index is on track for its largest two-day gain since February 2023, resulting in significant declines in gold and silver prices, with spot gold falling 4.6% to around $5,080 per ounce and silver plummeting 7.8% to $82 per ounce, highlighting the dollar's pressure on commodity markets.
See More
On Holding Reports Strong Earnings but Stock Drops
- Significant Sales Growth: On Holding reported a 35.6% year-over-year increase in sales, surpassing 3 billion Swiss francs (approximately $3.84 billion) for the first time, although it fell short of analysts' expectations of 3.7 billion francs, indicating strong market demand but raising investor concerns.
- Profitability Improvement: The company's gross profit margin reached 62.8%, leading the industry and demonstrating high brand value and customer loyalty, allowing it to avoid holiday discounts and maintain profitability, thereby enhancing future market competitiveness.
- Stock Volatility: Despite strong earnings, On Holding's stock dropped as much as 14.3% following the report, with a 6.95% decline as of 2:08 PM, reflecting market caution regarding future growth expectations.
- Investment Opportunity: With the stock down about 10% over the past year, analysts suggest investors consider buying at the current dip, believing On Holding possesses a consumer base and brand recognition akin to global luxury brands, with potential for price and margin increases in the future.
See More
On Holding Reports Strong Q4 Earnings Despite Stock Decline
- Sales Growth Exceeds Expectations: On Holding achieved a 30.6% sales growth in Q4, surpassing market expectations, with strong wholesale performance, although direct-to-consumer sales fell slightly short, indicating competitive strength in the market.
- Significant Margin Improvement: The company reported a gross margin of 63.9%, up approximately 180 basis points year-on-year, reflecting structural operational efficiencies and strong full-price execution, despite facing foreign exchange pressures, showcasing solid profitability.
- Optimistic 2026 Sales Guidance: Management's guidance for at least 23% sales growth in 2026 may be conservative, as lighter tariffs could enhance gross margins, boosting market confidence in the company's future performance.
- Negative Market Reaction: Despite On Holding's adjusted EBITDA significantly exceeding consensus estimates, shares fell by 2.94% to $42.62, primarily due to larger-than-expected foreign exchange headwinds projected for 2026, leading to cautious investor sentiment.
See More
On Holding Reports Strong Q4 Earnings but Shares Drop on Conservative Guidance
- Strong Earnings Report: On Holding reported upbeat Q4 earnings, with specific figures not disclosed, but overall performance exceeded market expectations, demonstrating the company's resilience in sales and operations.
- Stock Price Decline: Despite the positive earnings report, the company's conservative guidance led to a significant drop in share price, reflecting investor concerns about future growth and potentially impacting short-term market confidence.
- Analysts Remain Bullish: Despite the negative market reaction, analysts maintain a bullish outlook on On Holding's long-term prospects, believing the company has strong potential in brand building and market expansion, which may attract more investor interest.
- Market Reaction Analysis: The investor response to the conservative guidance indicates uncertainty about future performance, which may prompt the company to reassess its growth strategies to enhance market confidence and stabilize its stock price.
See More
On Holding Reports Strong Q4 Earnings but Disappoints on Revenue Guidance
- Strong Earnings Report: On Holding reported adjusted earnings per share of 31 cents for Q4, surpassing the analyst estimate of 18 cents, indicating improved profitability despite ongoing market challenges.
- Sales Exceed Expectations: The company achieved net sales of $930.66 million for the three months ending December 31, slightly above the consensus forecast of $915.20 million, demonstrating resilience in sales growth even amid a disappointing outlook.
- Disappointing Future Guidance: On Holding expects fiscal year 2026 net sales to exceed $4.304 billion, falling short of the $4.590 billion analysts anticipated, which may impact investor confidence and lead to stock price volatility.
- Analyst Rating Adjustments: Following the earnings announcement, several analysts adjusted their price targets for On Holding, with Guggenheim lowering its target from $59 to $51, reflecting a cautious outlook on the company's future growth prospects.
See More
Global Stock Markets Retreat as Oil Prices Surge
- Market Decline: The S&P 500 index fell by 0.94%, reaching a 3.25-month low, reflecting investor concerns over escalating tensions in Iran, which may impact future investment decisions and market stability.
- Surge in Oil Prices: WTI crude oil prices rose over 4% to an 8.5-month high due to threats from Iran to close the Strait of Hormuz, intensifying fears of energy supply disruptions and potential inflationary pressures in the economy.
- Natural Gas Price Spike: European natural gas prices surged more than 22% to a three-year high after Qatar's Ras Laffan plant was targeted by an Iranian drone attack, posing significant risks to global liquefied natural gas supply and market stability.
- Economic Data Expectations: This week, the ADP employment change is expected to increase by 50,000, while the ISM services index is projected to slip slightly, with markets closely monitoring these indicators to assess economic health and potential implications for Federal Reserve monetary policy decisions.
See More
Wall Street Plummets Amid Escalating Geopolitical Tensions
- Oil Price Surge: The escalating conflict between the U.S., Israel, and Iran has driven West Texas Intermediate crude oil prices up by 6.4% to $75.8 per barrel, marking the largest two-day rally since March 2022, indicating heightened market concerns over energy supply disruptions.
- Market Panic Intensifies: The CBOE Volatility Index surged by 6% to 22.74, reflecting increased investor fear regarding short-term market volatility, with all 11 S&P 500 sectors trading in the red, showcasing widespread market pressure.
- Fed Policy Expectations Shift: Amid rising inflation fears, the 10-year Treasury yield climbed from 3.97% last Friday to approximately 4.06%, leading traders to reprice expectations for Fed rate cuts, now anticipating fewer chances of cuts in 2026.
- Strong Dollar Impact: The U.S. dollar index is on track for its largest two-day gain since February 2023, resulting in significant declines in gold and silver prices, with spot gold falling 4.6% to around $5,080 per ounce and silver plummeting 7.8% to $82 per ounce, highlighting the dollar's pressure on commodity markets.
See More
On Holding Reports Strong Earnings but Stock Drops
- Significant Sales Growth: On Holding reported a 35.6% year-over-year increase in sales, surpassing 3 billion Swiss francs (approximately $3.84 billion) for the first time, although it fell short of analysts' expectations of 3.7 billion francs, indicating strong market demand but raising investor concerns.
- Profitability Improvement: The company's gross profit margin reached 62.8%, leading the industry and demonstrating high brand value and customer loyalty, allowing it to avoid holiday discounts and maintain profitability, thereby enhancing future market competitiveness.
- Stock Volatility: Despite strong earnings, On Holding's stock dropped as much as 14.3% following the report, with a 6.95% decline as of 2:08 PM, reflecting market caution regarding future growth expectations.
- Investment Opportunity: With the stock down about 10% over the past year, analysts suggest investors consider buying at the current dip, believing On Holding possesses a consumer base and brand recognition akin to global luxury brands, with potential for price and margin increases in the future.
See More
