((Automated translation by Reuters, please see disclaimer
(Added earnings comparison in paragraph 10 and updated stocks) by Ananya Mariam Rajesh
On Holding ONON.N beat analysts’ estimates for second-quarter revenue on Tuesday on strong demand for its footwear and apparel from customers looking for fashionable products, but shares fell 9% premarket as the company maintained its full-year forecast.
The company cited low inventory due to capacity constraints and supply issues at its Atlanta distribution center, which is being automated.
“We experienced shipping delays, but also stockouts in our retail channel… While we had a record quarter, it could have been even stronger if we had not had these impacts,” Martin Hoffmann, co-CEO and CFO, told Reuters.
The forecast reflects the company’s expectation that disruptions will continue for months to come, he added.
The Roger Federer-backed company maintained its forecast of net sales growth of at least 30% for 2024.
U.S.-listed shares of On are up nearly 47% since the start of the year as the company and Hoka-owner Deckers Outdoor DECK.N leapfrog athletic apparel giant Nike NKE.N for shelf and online space at retailers including Dick’s Sporting Goods DKS.N and Foot Locker FL.N in the running shoe category.
We launched products in the running and trail categories, seeking to exploit the trend of customers willing to splurge on comfortable and new products, even if they remain cautious about major purchases.
“We see a lot of sales coming in at full price…it’s a business that makes sense in the long term,” Hoffmann said.
The company’s second-quarter sales rose nearly 28% to 567.7 million Swiss francs ($655 million), compared with LSEG’s estimate of 560.9 million Swiss francs.
Adjusted earnings of 0.15 Swiss francs per share narrowly missed estimates of 0.16 Swiss francs.
($1 = 0.8664 Swiss francs)
