On raises profit outlook after strong sales, gains ground on Nike, Adidas

On raised its 2026 profit outlook after a first quarter that pushed quarterly net sales above CHF 800 million for the first time, a milestone that underlines how fast the Swiss brand is gaining ground in a sportswear market long dominated by Nike and Adidas.

The Zurich-based company said first-quarter sales rose 26.4% in constant currency to CHF 831.9 million, or 14.5% reported, and lifted its adjusted operating margin forecast to 19.5% to 20% from 18.5% to 19%. It also increased its gross-margin floor to at least 64.5% while keeping its goal of at least 23% annual sales growth. Those targets suggest On believes it can keep expanding without sacrificing pricing power, a key test for any premium brand trying to take share from far larger rivals.

The numbers point to a business still in a rapid scaling phase. On’s direct-to-consumer sales rose 16.4% to CHF 322.3 million, though that came in below some analyst expectations. China posted double-digit growth, and Asia-Pacific stood out with sales up 44.4% reported and 61.4% in constant currency, accounting for more than 20% of global net sales. Apparel, a business On is using to broaden beyond running shoes, grew 45.1% reported and 57.5% in constant currency.

That product mix matters. On built its reputation on lightweight, premium running shoes, but management has been moving the brand toward a fuller sportswear identity, where clothing can deepen customer relationships and improve repeat purchases. The apparel push also gives On more room to defend margins if consumers become more selective or promotional pressure rises elsewhere in retail.

Zendaya has become the public face of that strategy. On brought her in as a brand partner in 2024, and the relationship has since expanded into co-created footwear and apparel, including the Cloudzone Moon and the spring 2026 launch of the first Zendaya x On collection. Co-CEO Caspar Coppetti has said the actress is helping the company connect with younger and female shoppers, two audiences that matter as much for long-term brand equity as for immediate sales.

The bigger question is durability. On’s full-year net sales climbed from CHF 2.3183 billion in 2024 to CHF 3.014 billion in 2025, while gross margin reached 62.8% and adjusted EBITDA margin 18.8%. Nike’s fiscal 2025 revenue was $46.3 billion, down 10% from a year earlier, showing how wide the scale gap remains even as On takes share. For now, the combination of premium positioning, selective celebrity marketing, and a better product mix suggests On’s momentum is grounded in more than celebrity buzz.