Running shoe maker On's net income jumped 356% last quarter, driven by a surging direct-to-consumer business

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Americas sales grew just 13% in constant currency terms in Q2, slowing from 17% growth the prior quarter

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On Holding reported second-quarter net sales of CHF 850.3 million on Tuesday, missing analyst estimates and sending On stock down as much as 22% to a roughly two-year low, according to Reuters.

Americas revenue, On's largest regional segment at more than half of total sales, expanded just 13% on a constant-currency basis in the quarter ended June 30, slowing from the 17% pace posted in Q1. Analysts had expected net sales of CHF 878.16 million for the quarter, according to Reuters. Net sales rose 13.5% year-over-year, or 21.6% on a constant currency basis.

Wholesale was the main weight on the headline number. That channel's net sales climbed 4.8% to CHF 461.9 million, or 12.7% in constant currency — a steep step down from the 25.1% constant-currency advance recorded in Q1. On said the wholesale restraint is intentional, aimed at keeping pricing clean before a wave of new product introductions it has planned for 2027. Direct-to-consumer sales, by contrast, rose 26% to CHF 388.4 million, or 34.3% in constant currency terms, reaching a second-quarter high of 45.7% of net sales.

Asia-Pacific led all regions, with net sales up 43.1% to CHF 170.5 million, driven by strong performance in Japan, South Korea and Greater China. EMEA net sales rose 15.4% to CHF 228.2 million.

Net income swung to CHF 105.0 million from a loss of CHF 40.9 million a year earlier, a gain of 356.5%. Gross profit margin expanded to 65.4% from 61.5%, even while absorbing higher U.S. import tariffs and excluding any tariff refunds, the company said. Adjusted EBITDA rose 23.5% to CHF 168.1 million. Adjusted earnings per share came in at CHF 0.35, edging past analyst estimates of CHF 0.34.

"We do not compromise our full-price integrity for volume — even in the heavily promotional environment we saw this quarter in some markets," Chief Financial Officer Frank Sluis said in a statement.

For the full year, On lifted its gross profit margin outlook to a minimum of 65% — previously 64.5% following Q1 guidance — while holding its adjusted EBITDA margin target steady in the 19.5%–20% range. On trimmed its constant-currency revenue growth outlook to the low-20% range from a prior floor of 23%, translating to an expected absolute net sales figure of CHF 3.47 billion to CHF 3.56 billion for the full year.

On raised its full-year profit forecast after posting record first-quarter net sales of CHF 831.9 million, with Americas sales growing 17.1% in constant currency terms that quarter. The current results mark the second consecutive quarter of decelerating Americas growth, following 28.6% growth recorded in the year-ago period.

Cash and cash equivalents rose 18% to CHF 1.21 billion as of June 30, compared with CHF 1.02 billion at year-end 2025.

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