What's Happening?
On, an athletics brand, has increased its full-year sales growth forecast to 31% year over year, up from a previous estimate of 28%. The company also raised its gross profit margin projection to a range of 60.5% to 61%. In the second quarter, On's net sales rose by 32% to 749.2 million Swiss francs, driven by a 47.2% increase in direct-to-consumer sales. However, the company reported a net loss of 40.9 million Swiss francs, attributed to unfavorable currency exchange rates and increased import costs due to tariffs.
Why It's Important?
On's ability to raise its sales outlook despite economic headwinds highlights the brand's resilience and strategic positioning in the market. The company's focus on direct-to-consumer sales and premium pricing strategy has helped mitigate some of the impacts of tariffs and currency fluctuations. This development is crucial for stakeholders in the retail and athletic apparel sectors, as it underscores the importance of adaptability and strategic planning in navigating complex global trade environments.
What's Next?
On plans to continue expanding its apparel category, which saw a 67.5% increase in sales, to reach a broader audience. The company does not anticipate further price increases in the U.S. unless macroeconomic conditions change. Stakeholders will be watching how On manages its production and pricing strategies in response to ongoing trade and currency challenges.
