Apparel Seen as Major Growth Area for On Holding

On Holding has big plans for apparel.
In reporting record quarterly net sales in the first quarter on Tuesday, the Swiss footwear brand specifically singled out apparel as a major growth area.
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'[The apparel collection] is continuing its impressive climb in market share across all regions and channels. Last year, we hit $100 million in sales in apparel so it's still small — it's start-up size. But that's why it's such a big opportunity,' Martin Hoffmann, co-chief executive officer and chief financial officer, told WWD.
He said the category does especially well in the company's retail stores, where it accounts for around 20 percent of the overall business. The company's store in Newport Beach, Calif., in particular was a standout in the first quarter, he detailed during the company's conference call, with 'the highest apparel share among all U.S. stores during the quarter.'
Overall, apparel sales hit 38.1 million Swiss francs in the first quarter, up 93.1 percent from the prior year and the company's highest quarterly figure to date. He said that during the company's recent global summit, the team staged a full fashion show highlighting spring 2026 product that was well received.
'Apparel momentum is off to a strong start in 2025, powered by standout launches and running movement in tennis,' he said. 'Our training campaign with FKA Twigs, launched earlier this year, drove significant gains in the apparel share across key e-commerce region. Meanwhile, performance such as shops-in-shop with strategic retail partners delivered outstanding results. At our Selfridges pop-up in London, which opened earlier in the quarter, nearly every second item purchased were apparel or an accessory.'
In the conference call following the earnings release, Caspar Coppetti, cofounder and executive co-chairman, said: 'In April, we introduced our latest move in lifestyle campaign with Zendaya. The fictional film trailer set in space reflects On's continued commitment to pushing the boundaries of visual storytelling and cultural connection. The campaign reinforces our focus to build On from the feet up by introducing our fans to On's Apparel and accessories at every touch point. Ahead of any impact from On's most recent campaign, we have continued to observe the meaningful acceleration within our apparel business, with net sales almost doubling during the first three months of the year.
The company attributed its success in apparel in part to tweaking its sizing to correspond more closely to other brands, the executives said on the call. And the focus on three popular categories — running, tennis and training/movement — has also connected with customers.
'We had a really strong campaign with FKA Twigs,' Coppetti continued. 'We have now just doubled down on a couple of weeks ago with Zendaya with the first knit product that we put out there and we're going to continue on this path. So you're going to see basically running, training and tennis as the main stories throughout the rest of the year. Some of our own retail stores are now really pushing high-double-digit numbers on apparel share. If we do something special, we can even have a 50 percent apparel share, which is very encouraging for what we're planning to do in the future.'
Hoffmann added: 'There's a lot of upside potential that we want to tap into. But it's strongly linked to our own retail so by adding more stores, the apparel share will come up.'
Currently, Hoffmann said On operates 53 stores globally, 30 of which are in China, and the plan is to add another 15 units this year and between 20 and 25 a year 'for the midterm future.'
He hinted that these new stores will have a 'more premium positioning,' but said it was still too early to provide any further details at this point.
Hoffmann said the company's retail stores continue to 'showcase exceptional momentum from both new store openings and meaningful increases in existing store productivity. The store rollout and strong growth of this channel is visible across all regions. But if I had to pick one highlight this quarter, it would be the continued strength of our Tokyo store, which even surpassed our richest street store in London in terms of net sales.'
In the first quarter, On saw net sales increase 43 percent to 726.6 million Swiss francs, compared to 508.2 million Swiss francs in first quarter 2024. Net income, however, decreased by 38 percent to 56.7 million Swiss francs from 91.4 million Swiss francs the same time last year.
The company also raised its full-year guidance for the year. It now expects to reach at least 28 percent growth on a constant currency basis, equivalent to 2.86 billion Swiss francs at current spot rates. The company added that it now expects a gross profit margin in the range of 60 and 60.5 percent for the full year, and an adjusted EBITDA margin in the range of 16.5 and 17.5 percent.
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