What is the story about?
What's Happening?
On Holdings, a sports brand, is expanding its collaboration with actress Zendaya, who has been an ambassador for the brand since June 2024. The company plans to launch a new apparel collection featuring Zendaya's designs in September. This announcement comes as On Holdings reported a 32% increase in second-quarter sales, reaching 749.2 million Swiss francs. Despite a net loss of 40.9 million Swiss francs due to currency fluctuations, the company remains optimistic about its growth prospects. On Holdings is focusing on expanding its apparel segment, which currently accounts for 7-8% of sales, with a goal to increase this to 10%. The company is also expanding its direct-to-consumer and wholesale operations globally.
Why It's Important?
The collaboration with Zendaya and the strong sales performance underscore On Holdings' strategic focus on becoming a full sportswear brand. The expansion into apparel, driven by high-profile partnerships, positions the company to capture a larger share of the growing sportswear market. The brand's ability to maintain strong sales growth despite currency challenges highlights its resilience and market appeal. The focus on direct-to-consumer sales and global expansion further strengthens its market position. Investors and industry analysts view these developments as positive indicators of the brand's long-term growth potential and market competitiveness.
What's Next?
On Holdings plans to continue its global expansion by opening additional stores in key markets, including the U.S., Mexico, and Asia. The company is also raising its full-year sales guidance, projecting a 31% increase, and expects to achieve an EBITDA margin of 17-17.5%. The upcoming apparel collection with Zendaya is anticipated to boost brand visibility and consumer engagement. As the company navigates currency challenges, it will focus on maintaining its premium brand positioning and leveraging its direct-to-consumer and wholesale channels to drive growth.
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