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On Holding's DTC Growth Strengthens Its Premium Business Model
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Key Takeaways
On Holding's DTC sales rose 26% to CHF 388.4M, reaching a record 45.7% of second-quarter sales.
A richer DTC mix and full-price discipline lifted gross margin by 390 bps to 65.4% despite U.S. tariffs.
On Holding expects DTC to outpace wholesale in the second half and sees 2026 gross margin at least 65%.
On Holding AG’s (ONON - Free Report) direct-to-consumer (DTC) momentum is reinforcing its premium business model. In second-quarter 2026, DTC sales climbed 26% year over year to CHF 388.4 million or 34.3% at constant currency. The channel accounted for a second-quarter record 45.7% of total sales, up from 41.1% a year earlier.
The strength extended across e-commerce and company-owned stores. Online growth exceeded management’s expectations in every region, while the share of full-price sales increased year over year. Higher traffic and transactions, alongside store expansion, supported DTC growth. Strong comparable-store sales and standout performances in Paris and Tokyo further underscored demand.
The shift toward On Holding’s highest-margin channel is supporting profitability. A richer DTC mix, full-price discipline and operational efficiencies helped lift gross margin by 390 basis points to 65.4%, despite higher U.S. import tariffs. Adjusted EBITDA margin expanded to 19.8% from 18.2%, supporting investment in innovation, digital capabilities and premium consumer experiences.
DTC outperformed wholesale in every region, highlighting the strength of On Holding’s direct consumer relationships. Wholesale sales grew 4.8%, reflecting softer demand for some everyday running franchises and deliberate shipment restraint. By limiting inventory buildup in a promotional marketplace, On Holding is protecting full-price positioning, which remains central to its premium strategy.
On Holding expects DTC sales growth to strongly outpace wholesale in the second half of 2026. Management raised its full-year gross margin outlook to at least 65%, while maintaining adjusted EBITDA margin guidance of 19.5-20%. Sustained direct-channel demand and disciplined distribution reinforce On Holding’s premium positioning and support profitable growth.
DECK & WWW’s DTC Picture vs. ONON
Deckers Outdoor Corporation (DECK - Free Report) delivered strong DTC momentum in the first quarter of fiscal 2027, with total DTC sales increasing 13% year over year. The company’s DTC growth was led by HOKA, where global DTC revenues rose 17%, while UGG DTC increased 6%. DECK benefited from strong full-price demand, product innovation and disciplined inventory management, supporting higher gross margins. For fiscal 2027, Deckers expects to continue driving significant DTC growth, with management indicating no significant change in the channel’s trajectory. DECK views DTC as a key growth engine, supported by expanding international reach, new products and greater consumer engagement.
Wolverine World Wide (WWW - Free Report) saw DTC revenues remain approximately flat year over year in the second quarter of 2026, despite 8% wholesale growth. WWW is making DTC a significant focus, with Saucony showing good DTC growth while Merrell is being repositioned toward a higher full-price mix and less promotional activity. Wolverine is investing in stronger online storytelling and more targeted marketing across the consumer funnel. Management acknowledged that more work remains but is taking steps to improve DTC performance, particularly ahead of the holiday season.
ONON’s Price Performance, Valuation & Estimates
On Holding’s shares have lost 25.6% over the past three months compared with the industry’s 7.2% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, ONON trades at a trailing price-to-sales ratio of 2.12, above the industry’s average of 1.40. It has a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ONON’s fiscal 2026 earnings implies year-over-year growth of 78.4%, whereas the same for fiscal 2027 indicates an uptick of 16.1%. Estimates for fiscal 2026 have been revised upward by 1 cent, while those for fiscal 2027 have remained unchanged over the past seven days.
Image Source: Zacks Investment Research
On Holding currently carries a Zacks Rank #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Bigstock
On Holding's DTC Growth Strengthens Its Premium Business Model
Key Takeaways
On Holding AG’s (ONON - Free Report) direct-to-consumer (DTC) momentum is reinforcing its premium business model. In second-quarter 2026, DTC sales climbed 26% year over year to CHF 388.4 million or 34.3% at constant currency. The channel accounted for a second-quarter record 45.7% of total sales, up from 41.1% a year earlier.
The strength extended across e-commerce and company-owned stores. Online growth exceeded management’s expectations in every region, while the share of full-price sales increased year over year. Higher traffic and transactions, alongside store expansion, supported DTC growth. Strong comparable-store sales and standout performances in Paris and Tokyo further underscored demand.
The shift toward On Holding’s highest-margin channel is supporting profitability. A richer DTC mix, full-price discipline and operational efficiencies helped lift gross margin by 390 basis points to 65.4%, despite higher U.S. import tariffs. Adjusted EBITDA margin expanded to 19.8% from 18.2%, supporting investment in innovation, digital capabilities and premium consumer experiences.
DTC outperformed wholesale in every region, highlighting the strength of On Holding’s direct consumer relationships. Wholesale sales grew 4.8%, reflecting softer demand for some everyday running franchises and deliberate shipment restraint. By limiting inventory buildup in a promotional marketplace, On Holding is protecting full-price positioning, which remains central to its premium strategy.
On Holding expects DTC sales growth to strongly outpace wholesale in the second half of 2026. Management raised its full-year gross margin outlook to at least 65%, while maintaining adjusted EBITDA margin guidance of 19.5-20%. Sustained direct-channel demand and disciplined distribution reinforce On Holding’s premium positioning and support profitable growth.
DECK & WWW’s DTC Picture vs. ONON
Deckers Outdoor Corporation (DECK - Free Report) delivered strong DTC momentum in the first quarter of fiscal 2027, with total DTC sales increasing 13% year over year. The company’s DTC growth was led by HOKA, where global DTC revenues rose 17%, while UGG DTC increased 6%. DECK benefited from strong full-price demand, product innovation and disciplined inventory management, supporting higher gross margins. For fiscal 2027, Deckers expects to continue driving significant DTC growth, with management indicating no significant change in the channel’s trajectory. DECK views DTC as a key growth engine, supported by expanding international reach, new products and greater consumer engagement.
Wolverine World Wide (WWW - Free Report) saw DTC revenues remain approximately flat year over year in the second quarter of 2026, despite 8% wholesale growth. WWW is making DTC a significant focus, with Saucony showing good DTC growth while Merrell is being repositioned toward a higher full-price mix and less promotional activity. Wolverine is investing in stronger online storytelling and more targeted marketing across the consumer funnel. Management acknowledged that more work remains but is taking steps to improve DTC performance, particularly ahead of the holiday season.
ONON’s Price Performance, Valuation & Estimates
On Holding’s shares have lost 25.6% over the past three months compared with the industry’s 7.2% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, ONON trades at a trailing price-to-sales ratio of 2.12, above the industry’s average of 1.40. It has a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ONON’s fiscal 2026 earnings implies year-over-year growth of 78.4%, whereas the same for fiscal 2027 indicates an uptick of 16.1%. Estimates for fiscal 2026 have been revised upward by 1 cent, while those for fiscal 2027 have remained unchanged over the past seven days.
Image Source: Zacks Investment Research
On Holding currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.