On Holding Posts Strong Beat-And-Raise Q2 As 'Select Price Increases' Offset Tariff Costs

Shares of On Holding AG ONON declined in early trading on Wednesday, despite the company reporting upbeat second-quarter results.

Here are some key analyst takeaways.

• Needham analyst Tom Nikic reiterated a Buy rating and price target of $62.
• Telsey Advisory Group analyst Cristina Fernández reaffirmed an Outperform rating and price target of $65.

Check out other analyst stock ratings.

Needham: On Holding reported a "rock solid beat-and-raise" quarter, Nikic said. DTC growth accelerated to 54% in the second quarter, from 42% in the previous quarter, representing the highest growth quarter since the third quarter of 2023.

Strength across e-commerce and retail stores drove DTC growth. Wholesale grew by 29%, beating Street expectations of 26%. Although the company raised its full-year guidance, the projections reflect "some modest deceleration in growth" in the back half of the year. This is "largely due to difficult YoY comparisons and macro uncertainty," Nikic added.

Telsey Advisory Group: While growth in On Holding's high-margin DTC channel accelerated in the quarter, apparel decelerated, Fernández said. Growth in the EMEA (Europe, the Middle East and Africa) region accelerated, there was a slowdown in APAC (Asia-Pacific) growth, although it remained strong.

On Holding raised full-year guidance for revenues, gross margin, and EBITDA. It demonstrates "the strength of the brand globally" and confidence in its performance in the back half of the year, the analyst wrote. While tariff costs are rising sharply, the company is finding ways to offset them through “select price increases,” Fernández wrote.

ONON Price Action: Shares of On Holding had declined by 4.50% to $47.57 at the time of publication on Wednesday.

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