Table of Contents
On Running is a premium athletic shoe and clothing company quickly gaining ground against Nike and Adidas. It’s founder-led with a culture that demands operational excellence and impactful, trend-setting innovation.
a. Demand
Please note that CHF = Swiss Francs.
ONON missed revenue estimates by 3.5%. This was an extremely noisy quarter for demand. Its lower-quality wholesale channel endured voluntary pullbacks while its higher-quality direct-to-consumer (DTC) channel killed it. Much more on this later in the piece.
The proportion of e-commerce customers under the age of 24 rose significantly Q/Q.
The proportion of overall customers under the age of 34 also rose Q/Q.
b. Profits
Beat GPM estimate by 120 bps. They did not enjoy any tariff refunds this quarter (they’re coming). This was due to some freight help, strength in full-price sales and a shift to DTC sales.
Missed EBITDA estimate by 4%.
EBITDA rose by 30% Y/Y on a constant currency (CC) basis.
GPM expanding Y/Y by 2 points more than EBITDA did is related mainly to marketing rising from 12% of revenue to 14%. They’re leaning into brand building and new country scaling to support growth.
Met $0.35 EPS estimate.
c. Balance Sheet
1.21B CHF cash & equivalents.
1% Y/Y dilution.
31% Y/Y inventory growth.
d. Guidance & Valuation
Subscribe to our premium content to read the rest.
Become a paying subscriber to get access to this post and a boatload of other subscriber-only content. Read the stock market newsletter read by Fortune 500 CEOs.
Upgrade