On, a running shoe company headquartered in Switzerland and listed in New York, is rising rapidly.
Its iconic pothole shoe has become a favorite among runners around the world, although it has a shorter history than some of its peers. Since the COVID-19 pandemic, more and more people are turning to running as a form of exercise, and On is capitalizing on this trend at a perfect time.
The company, which is backed by tennis icon Roger Federer, reported on Tuesday first-quarter sales up 29% year-on-year at constant exchange rates to 508 million Swiss francs ($560 million), topping 500 million. mark.
Its direct-to-consumer sales, which reach shoppers directly through On’s website and app, saw net sales grow 49% during the same period, significant growth for the athletic apparel company.
“This is a testament to the strong demand we are experiencing across all channels, geographies and product categories,” said Martin Hoffman, On’s co-chief executive and chief financial officer.
The Swiss company raised its annual sales forecast after beating analysts’ forecasts in the first quarter, benefiting from currency fluctuations. The U.S., On’s largest sales market, has significantly outperformed other regions, with shares in New York up 35% since the start of 2024.
On is growing well compared to other sportswear companies. For example, in the face of weak consumer demand, Nike launched a $2 billion cost-saving plan over the next three years, while retailer Foot Locker had to postpone its growth plans until the market improved.
‘step up
Since its founding in 2010, On has become a superstar in the crowded sneaker industry. Its shoes stand out because of the “pods” on the platform designed to absorb the impact of every step. The Zurich-based company also has a niche among fashion-loving luxury consumers willing to spend more on high-quality shoes.
On’s shoes relied on science and innovative design to quickly become popular among sports enthusiasts, especially runners, and became profitable within four years of launch.
The pandemic marked a turning point, and the company went public in August 2021 with a valuation of more than $11 billion. One year after its listing, despite the shrinking sales of the overall sports market, the company’s net sales increased by 70% compared with 2020, which is superior to other companies in the industry.
A shining example of On’s success is Hellen Obiri winning the Boston Marathon twice wearing its shoes.
The Swiss brand has launched a series of new products such as Cloudmonster 2 and Cloudspark, and plans to expand into the DTC space to attract more shoppers. It is also eyeing this summer’s Olympics to build brand awareness among the world’s top athletes.
“This is really the first Olympics where we can really show off our skills,” Hoffman told Bloomberg. “And it’s close to our home, so we can compete at full strength.”
We’ll have to wait and see if Ann’s dream continues.
