On Holding AG (NYSE:ONON) sprinted nearly 20% higher today after a blowout third quarter that showed the Swiss sneaker maker isn’t just keeping pace with Nike Inc (NYSE:NKE) and Adidas AG (OTCPK:ADDYY) — it’s outrunning them.
The company’s Asia-Pacific business grew 85% year-to-date, now contributing more than 10% of global sales, led by record results in China and Japan. Even more striking, On hit an all-time China single-day sales record during the Double 11 event — without discounting.
In a market known for heavy promotions, that’s rare. Co-founder & executive co-chairman, Caspar Coppetti put it bluntly during the company’s third quarter earnings call: “We achieved this despite remaining committed to a full price strategy — a testament to On’s exceptional brand strength.”
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On Is Doing What Nike Couldn’t — Winning China Without Discounts
If China is the growth story, margins are the shock. On hit a 60.1% gross profit margin year-to-date, raising its full-year outlook to around 60.5%, up 50 basis points from prior guidance. That’s well above peers — even Lululemon Athletica Inc‘s (NASDAQ:LULU) vaunted levels.
CFO Martin Hoffmann said the strength came from D2C momentum, premium pricing, and a “balanced inventory position.” Investors heard that as code for pricing power — and scalability.
D2C, Apparel, And Innovation All Click
Direct-to-consumer sales surged 50%, as On’s 50 owned stores — its largest footprint yet — helped fuel record holiday momentum. Apparel sales hit their best month ever in October, while the upcoming Cloud 6 line will lift prices by another $10 per pair.
But what really caught Wall Street’s eye was LightSpray, a next-gen manufacturing technology that fuses shoe parts in a single automated step. Coppetti teased its potential to “disrupt how footwear is made” and to nearshore production “at comparable cost anywhere in the world.”
The Brand That’s Cool And Credible
Zendaya and Roger Federer — two halves of the brand’s cultural DNA — continue to drive awareness among both fashion and performance consumers. The result: On’s brand recognition jumped even in saturated markets like Switzerland, up 30 percentage points.
With gross margins expanding, Asia exploding, and innovation running ahead of schedule, On looks less like a niche running brand — and more like the next global sportswear giant in the making.
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Photo: Ivan Kurmyshov on Shutterstock.com