TLDR
- Shares of ONON plummeted 22% following second-quarter net sales of CHF 850.3 million, falling short of analyst expectations of CHF 879.57 million.
- Growth in the wholesale channel decelerated significantly to 4.8% worldwide, while Americas growth on a constant currency basis slowed to 13% versus 17% in the prior quarter.
- The company reduced its 2026 full-year net sales growth projection to the low-20% range from the previous guidance of “at least 23%.”
- William Blair’s Dylan Carden moved his rating to Hold from Buy, pointing to diminished earnings predictability and mounting inflationary headwinds.
- Needham lowered its price target to $37 from $45 while keeping a Buy recommendation, contrasting with the consensus target of $53.42.
Shares of On Holding experienced a sharp 22% decline on Tuesday, with NYSE ONON falling $7.30 to close at $31.48, hovering near its 52-week low of $30.11. The steep selloff followed the Swiss athletic footwear company’s second-quarter earnings release, which disappointed investors with weaker-than-expected revenue and a lowered full-year forecast.
The company posted adjusted earnings per share of CHF 0.35 for Q2, edging past consensus by a single cent. However, that narrow beat represented the only bright spot in an otherwise disappointing report. Net sales totaled CHF 850.3 million, missing Wall Street’s forecast of CHF 879.57 million.
The revenue shortfall stemmed primarily from challenges in the wholesale segment. Wholesale channel revenue growth across all markets decelerated to a mere 4.8%. Company leadership intentionally restrained wholesale sell-in volumes to maintain premium brand positioning, but this strategic choice directly impacted top-line performance.
Regionally, the Americas segment showed signs of cooling, with constant currency growth moderating to 13% from the previous quarter’s 17%. Management cited increasingly promotional conditions in the U.S. market, creating pressure on pricing for core running footwear categories.
On Holding also revised downward its full-year 2026 constant currency net sales growth forecast to the low-20% range. This marks a reduction from prior guidance calling for growth of “at least 23%.” The adjusted revenue outlook fell below consensus analyst estimates.
Analyst Downgrades on Weaker Visibility
Dylan Carden of William Blair downgraded his stance on ONON from Buy to Hold. While Carden recognized On’s historical strength in driving growth through innovative productsāa key pillar of his previous bullish thesisāhe expressed concern about escalating inflation pressures affecting the broader apparel and footwear industries, combined with rising promotional intensity in lifestyle product segments.
According to Carden, while On’s commitment to pricing discipline supports brand equity, it simultaneously creates uncertainty around wholesale performance over the coming year. Given reduced earnings visibility and accumulating growth uncertainties, he determined a more cautious rating was warranted.
Carden is currently ranked 2,201 among 12,465 analysts on TipRanks, posting a 52% success rate with an average return of 8.7% per recommendation tracked over one year.
Needham also adjusted its outlook, reducing its price target to $37 from $45, though the firm retained its Buy rating. The revised $37 target suggests approximately 17.5% potential upside from Tuesday’s closing price.
Where Analysts Stand Now
Despite Tuesday’s sharp decline, the majority of Wall Street analysts remain constructive on the stock. ONON maintains a Moderate Buy consensus rating on MarketBeat, supported by two Strong Buy ratings, 15 Buy ratings, four Hold ratings, and one Sell rating. The consensus price target stands at $53.42.
According to TipRanks, the stock holds a Strong Buy consensus rating based on 17 Buy recommendations, two Hold recommendations, and one Sell recommendation issued over the last three months. The platform’s average target of $50.53 suggests potential upside exceeding 63% from current trading levels.
On the corporate insider front, CEO Caspar Felix Coppetti purchased 60,000 shares at $36.64 in May, while insider Olivier Bernhard acquired 60,000 shares at $36.63. Combined insider buying activity over the past three months totaled 180,000 shares with an aggregate value of approximately $6.6 million.
Trading volume on Tuesday surged to 19.78 million shares, significantly exceeding the average daily volume of 5.84 million. The stock’s 52-week high is $52.20.
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