Dive Brief:
- Ahead of its 15th anniversary, On’s Q4 sales surged 35.7% year over year, to nearly 607 million Swiss francs ($690 million at press time). For the full year, On’s sales shot up almost 30% to 2.3 billion Swiss francs.
- DTC sales grew by more than 40% in both Q4 and the full year, amounting to record DTC share in the fourth quarter, while wholesale was up 29% in Q4 and increased more than 20% for the full year. The retailer grew profits for the year by more than 200%, to 242 million Swiss francs, and swung to a profit in Q4.
- On an earnings call with analysts last week, executives touted the strength of celebrity partnerships with Roger Federer, Zendaya and FKA Twigs, and said Zendaya’s first co-created footwear and apparel with the brand would be released this year.
Dive Insight:
As On’s streak of double-digit sales growth continues, the activewear brand is prioritizing both wholesale and DTC expansion.
Building relationships with premium wholesalers is a focus for the company, according to co-founder and executive co-chairman David Allemann, who called those partners “instrumental” to the brand’s growth. But at the same time, so are the company’s own stores. On opened 19 locations last year and now runs a footprint of almost 50 global stores. The retailer plans to expand further in 2025, particularly in Southeast Asia and the Middle East, and will open “many more” stores in the U.S. in the next year, executives said.
“We are grateful for our online success, but we know the power of major city centers,” Allemann said, noting that physical stores will help broaden On’s nascent apparel business.
Already, stores the brand opened last year have led to a “significant increase” in regional awareness in some of those cities. Last year, On disclosed plans to open 100 stores in the coming years.
“[On] remains one of the highest-momentum names in our coverage, and we remain bullish based on growing brand awareness, distribution expansion (both in DTC and wholesale), a strong margin profile, and a cash-rich balance sheet,” Needham analyst Tom Nikic said in emailed comments on the brand’s most recent results.
The activewear brand is gaining shelf space with the likes of Dick’s and Foot Locker and is among a group of athletics brands gaining influence with younger consumers. However, a report from Earnest Analytics last year also found that On and its newer fellows, including Vuori and Alo Yoga, were taking share from each other in addition to larger competitors like Nike.
Still, the brand represents a different take on activewear than the day’s sportswear giants — and it shows in On’s marketing as well. Unlike Nike, which has embraced gritty, unapologetic campaigns in recent months, On bragged about its recent commercial featuring Roger Federer and Elmo.
“Elmo perfectly embodies our core value of positive spirit — and bridges generations,” Allemann said. “In a world obsessed with pushing limits, we encourage runners to embrace soft wins and community.”
