On Running records positive 2023 sales growth

On’s net sales in 2023 increased 46.6 percent to 1,792.1 million Swiss francs or by 55 percent on a constant currency basis.

On’s fourth quarter net sales increased 21.9 percent to 447.1 million Swiss francs or by 31 percent on a constant currency basis.

Commenting on the company’s financial performance, Martin Hoffmann, co-CEO and CFO of On, said in a statement: “We achieved an outstanding 55 percent constant currency net sales growth, while bringing efficiency and profitability to new heights and driving the highest positive cash flow in our history.”

Highlights of On’s full year results

Full year net sales through DTC channel increased 50.9 percent to 671.8 million Swiss francs and net sales through the wholesale channel increased 44.2 percent to 1,120.3 million Swiss francs.

The company reported net sales in Europe, Middle East and Africa (EMEA), Americas and Asia-Pacific increased 29.2 percent to 488.7 million Swiss francs, 52.2 percent to 1,162.2 Swiss francs and 75.9 percent to 141.1 million Swiss francs, respectively. On a constant currency basis, net sales in EMEA, Americas and Asia-Pacific increased 35 percent, 61 percent and 96 percent, respectively.

2023 net sales from shoes, apparel and accessories increased 46.6 percent to 1,711.4 million Swiss francs, 45.5 percent to 68.9 million Swiss francs and 60.7 percent to 11.8 million Swiss francs, respectively.

Gross profit for the year increased 55.8 percent to 1,067.2 million Swiss francs and gross profit margin increased to 59.6 percent. Net income increased 37.9 percent to 79.6 million Swiss francs, basic EPS increased to 0.25 Swiss francs and diluted EPSalso increased to 0.25 Swiss francs.

The company’s adjusted EBITDA increased 67.6 percent to 276.9 million Swiss francs, adjusted EBITDA margin increased to 15.5 percent, adjusted net income increased to 112.4 million Swiss francs, adjusted basic EPS increased to 0.35 Swiss francs and adjusted diluted EPS increased to 0.35 Swiss francs.

On’s fourth quarter performance review

The company’s net sales through the DTC sales channel increased 38.2 percent to 206.6 million Swiss francs and net sales through the wholesale channel increased 10.7 percent to 240.5 million Swiss francs.

Fourth quarter net sales in EMEA, Americas and Asia-Pacific increased 22.9 percent to 112.5 million Swiss francs, 18.5 percent to 300.6 million Swiss francs, and 57.7 percent to 34 million Swiss francs, respectively.

On a constant currency basis, net sales in EMEA, Americas and Asia-Pacific increased 26 percent, 29 percent and 76 percent, respectively.

On’s net sales from shoes, apparel and accessories increased 20.4 percent to 425.7 million Swiss francs, 60.1 percent to 18.4 million Swiss francs and 60.1 percent to 2.9 million Swiss francs, respectively.

Gross profit for the quarter increased 25.9 percent to 270.2 million Swiss francs and gross profit margin increased to 60.4 percent. Net loss increased 1.3 percent to 26.8 million Swiss francs, while basic and diluted earnings per share remained unchanged at 0.08 Swiss francs.

The company’s adjusted EBITDA increased 16.3 percent to 71.9 million Swiss francs, adjusted EBITDA margin decreased to 16.1 percent adjusted net loss decreased to 16.3 million Swiss francs and adjusted basic and diluted EPS decreased to 0.05 Swiss francs.

On expects to achieve 30 percent sales growth in 2024

In October 2023, at On's Investor Day, the company announced the target to achieve a net sales CAGR of 26 percent through 2026.

For the full year 2024, On expects to grow even beyond this rate and to achieve a constant currency net sales growth rate of at least 30 percent. At current spot rates and reflecting the considerable recent Swiss Franc strength, this implies reported net sales of at least 2.25 billion Swiss francs in 2024.

For the first quarter of 2024, taking into account the lapsing of strong wholesale sales, On expects an increased DTC share and to achieve a constant currency net sales growth rate of 26 percent. At current spot rates, this implies expected reported net sales of 495 million Swiss francs.

For 2024, On anticipates a full year gross profit margin of approximately 60 percent, in line with the previously announced mid-term target.

Supported by the strong gross profit margin, On expects to take the next step towards its mid-term target to reach an adjusted EBITDA margin of 18 percent. In 2024, On anticipates to achieve a full year adjusted EBITDA margin in the range of 16 to 16.5 percent.

“As we look to further expand our presence in the global premium sportswear market, we have put a big emphasis on building awareness for our apparel offering. Based on the recent success, new and updated products and supported by our own retail store rollout, we expect to significantly build this category over the next few years," added David Allemann, co-founder and executive co-chairman of On.