It has been about a month since the last earnings report for On Holding (ONON Quick QuoteONON - Free Report) . Shares have lost about 13.5% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is On Holding due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for On Holding AG before we dive into how investors and analysts have reacted as of late.

On Holding Q2 Earnings Meet Estimates, FY’26 Margin Outlook Raised

On Holding reported second-quarter 2026 results, with earnings meeting the Zacks Consensus Estimate and revenues missing the same. On a year-over-year basis, adjusted earnings improved and net sales increased, supported by strong direct-to-consumer (“DTC”) growth, robust Asia-Pacific momentum and continued apparel strength. The company raised its 2026 gross margin outlook while maintaining its adjusted EBITDA margin guidance. ONON reported adjusted earnings of 44 cents per share, meeting the Zacks Consensus Estimate. Net sales came in at $1,076 million, below the consensus estimate of $1,114 million. Net sales rose 13.5% year over year—or 21.6% on a constant-currency basis—to CHF 850.3 million. Adjusted EPS Class A (CHF) improved to 0.35 from a loss of 0.09 in the year-ago quarter.

ONON's Quarterly Performance: Key Metrics & Insights

The company continued to witness strong momentum in its DTC business. DTC revenues increased 26% year over year to CHF 388.4 million, or 34.3% on a constant-currency basis, with growth exceeding expectations across every region. The DTC business reached a second-quarter high of 45.7% of total net sales, supported by continued strength across On's own retail stores and expanding global store network.

Wholesale revenues increased 4.8% year over year to CHF 461.9 million, or 12.7% on a constant-currency basis. The company continued to emphasize disciplined full-price selling and premium brand positioning amid a promotional marketplace.

Global brand awareness rose to 30%, while consumers under age 34 represented more than one-third of the customer base. On Holding recently opened its first stores in São Paulo and Copenhagen, extending its network of premium retail locations.

On Holding’s Profitability Improves Despite Tariffs

Gross profit increased 20.6% year over year to CHF 555.7 million. Gross margin expanded 390 basis points to 65.4% from 61.5%, despite the company fully absorbing higher U.S. import tariffs and excluding any tariff refunds. Selling, general and administrative expenses increased to CHF 436.3 million from CHF 368 million. Adjusted EBITDA increased 23.5% year over year to CHF 168.1 million, while adjusted EBITDA margin expanded 160 basis points to 19.8% from 18.2%. 

Net income was CHF 105 million against a loss of CHF 40.9 million in the year-ago quarter, with net income margin improving to 12.3% from negative 5.5%. Adjusted net income was CHF 117.6 million against a loss of CHF 29.7 million a year ago.

ONON's Regional Performance

Asia-Pacific delivered the strongest performance, with revenues increasing 43.1% year over year to CHF 170.5 million, or 54.7% on a constant-currency basis. The region again represented more than 20% of total company sales, supported by standout momentum across Japan, South Korea and Greater China. EMEA revenues increased 15.4% year over year to CHF 228.2 million, or 20.5% on a constant-currency basis, reflecting continued growth across the region. Americas revenues increased 4.5% year over year to CHF 451.6 million. On a constant-currency basis, sales increased 13%.

ONON Product Performance Reflects Broad Consumer Demand

Footwear remained the largest contributor to sales, with revenues increasing 10.9% year over year to CHF 781.6 million. On a constant-currency basis, footwear sales rose 18.9%.

Apparel revenues increased 47.7% to CHF 54.2 million, or 56.2% at constant currency. Accessories revenues climbed 88.3% to CHF 14.5 million, with constant-currency growth of 102.2%, underscoring faster expansion outside the core footwear category.

ONON's Financial Position

The company ended the second quarter with cash and cash equivalents of CHF 1.21 billion compared with CHF 1.02 billion at the end of 2025. Net working capital increased 11.5% to CHF 635.9 million from CHF 570.3 million.

For the first six months of 2026, cash inflow from operating activities increased to CHF 255 million from CHF 89.1 million a year earlier. Investing activities used CHF 47.2 million, while financing activities used CHF 43.3 million.

What to Expect From ONON in 2026?

Following a strong first half of 2026, management expects constant-currency net sales growth in the low-20% range for the year. At current spot rates, this implies reported net sales of CHF 3.47 billion to CHF 3.56 billion. The company expects DTC to strongly outperform wholesale in the second half as it deliberately manages wholesale sell-in to protect full-price integrity and create a clean runway for upcoming breakthrough innovations. On Holding raised its gross margin outlook to at least 65%, reflecting a favorable DTC mix, full-price discipline and operational efficiencies. The outlook excludes any benefits from anticipated tariff refunds in the second half of the year. Management reiterated its adjusted EBITDA margin guidance of 19.5% to 20% while continuing to invest in future growth opportunities. The company remains focused on pursuing high-quality growth while maintaining its premium positioning.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -10.1% due to these changes.

VGM Scores

At this time, On Holding has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock has a score of F on the value side, putting it in the lowest quintile for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise On Holding has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.