On Holding Q2 2026 earnings: sales miss and cut growth outlook overshadow margin gains
On beat profit estimates but missed on sales as wholesale growth slowed sharply; shares plunged after it trimmed its 2026 growth outlook despite raising margin targets.
| Q2 2026 | Reported | Expected | Surprise |
|---|---|---|---|
| EPS | $0.36 | $0.34 | +3.8% |
| Revenue | $873.0M | $895.7M | -2.5% |
Key takeaways
- On beat on profit but missed on sales for the quarter: adjusted earnings per share came in slightly above what analysts expected, while revenue fell short of forecasts as wholesale orders grew much more slowly than in recent quarters.
- The wholesale slowdown was deliberate, not a demand problem in isolation — management said it is intentionally holding back how much inventory it ships to retail partners to avoid discounting and to keep shelves clear for a wave of new product launches planned for 2027.
- Direct-to-consumer sales (through On’s own stores and website) kept growing much faster than wholesale, continuing a shift toward a sales mix that tends to carry higher profit margins.
- Gross margin — the share of each sales dollar left after production costs — expanded by nearly 4 percentage points from a year earlier, which management credited to full-price selling discipline and the DTC shift; that fits the strong trailing-twelve-month gross margin already running near 64%.
- Growth in the Americas, On’s largest region at roughly half of sales, slowed noticeably from the prior quarter, adding to investor concern about the pace of U.S. demand in a heavily discounted sneaker market.
- On lowered its full-year 2026 sales growth outlook to the “low-20% range” (at constant currency), down from its earlier guidance of at least 23%, while at the same time raising its full-year gross margin target to at least 65% and holding its adjusted profitability (EBITDA) margin target steady.
- Investors focused on the growth slowdown over the margin gains: shares fell sharply — one of the stock’s largest single-day drops — as the guidance cut raised questions about how much further U.S. wholesale growth could decelerate.
- Management struck a confident tone despite the reaction, saying the company remains on track — or ahead of track — to hit its longer-term growth and profitability targets even as it manages the current promotional environment.
How the stock took it
On Holding AG closed at $38.78 on Aug 10, 2026, the last session before the report, and at $31.01 on Aug 12, 2026, the first session after it — -20.0% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Fundamentals
| Metric | Value | Period |
|---|---|---|
| Gross margin | 63.9% | Trailing 12 months |
| Operating margin | 13.4% | Trailing 12 months |
| Net profit margin | 8.0% | Trailing 12 months |
| Pretax margin | 8.3% | Trailing 12 months |
| EPS | $0.75 | Trailing 12 months |
| Revenue growth (YoY) | 23.0% | Trailing 12 months |
| EPS growth (YoY) | 18.8% | Trailing 12 months |
| Return on equity | 13.5% | Trailing 12 months |
Sources: company report · reputable coverage · earnings call