Despite a surprising loss in Q4, On Holding is looking towards the future, with a special focus on the Olympic Games in Paris this summer.
In the fourth quarter, the Swiss running shoe brand posted a net sales increase in Q4 of 21.9 percent to 447.1 million Swiss francs. Sales came in around 1.5 percent less than analysts had been projecting, according to FactSet. Losses tallied 26.8 million Swiss francs from 26.4 million a year earlier and loss per share was 5 cents, which also fell short of estimates.
According to On co-CEO Marc Maurer, the fast-growing running brand is still on track for a solid 2024. And key milestone events — like the Games this summer — will help elevate the brand’s global position as a premium sportswear brand.
“The Olympics is a big opportunity to show who we are in terms of innovation, performance and bringing more sustainable products to the market,” Maurer told FN in an interview. “”But also to tell the Olympic stories through our eyes.”
That storytelling vision, Maurer said, celebrates the unity of sport rather than competition between athletes.
“We’ll try to bring this inclusive story to the world in how we tell it,” he said.
To do that, On will showcase its apparel collection via its Swiss team as well as with individual athletes like Hellen Obiri and Iga Swiatek. The brand will also put a spotlight on product innovation in Paris with a designated On branded hub as well as in its owned stores in the city. By the summer, On expects to open its second Paris store on the Champs-Élysées.
“You will be able to see On in one of the most prominent streets in the world, and we can bring the brand in front of even more consumers around Paris Olympics,” remarked on co-founder and executive co-chairman David Allemann about the new store in a call with investors on Tuesday.
Allemann confirmed that marketing spend as a percent of sales will be around 12 percent in 2024, inclusive of spending on the Games and in line with a broader goal to “increase brand awareness and consideration in a meaningful way over time in the key markets,” Allemann said. “We feel [the Olympics] is a great window to bring product innovation to the market. And so it’s more like a story that we can use to tell.”
The Games will also be a key opportunity to On to win in a major market close to home.
“Paris is just a few hours drive from Zurich,” Maurer said. “France is a big market for us that we want to grow. So it’s definitely a very exciting moment for us as a brand.”
As for other major events in 2024, Maurer said he doesn’t expect a significant impact in terms of sales in the U.S. market during what is set to be a highly contentious presidential election this year. Historically, consumer spending takes a hit during election years, but Maurer is confident that On still has runway to grow without being impeded by the political cycle.
“This shouldn’t impact us too much,” Maurer said, noting how On still has room to grow brand awareness in the U.S. market. “There is absolutely no anticipated impact in our numbers from [the election].”
