HomeMarket NewsOn Holding Rallies After Setting Aggressive Growth Targets at Investor Event

On Holding Rallies After Setting Aggressive Growth Targets at Investor Event

Actionable Trade Ideas

always free

Digitally Generated Currency and Exchange Stock Chart for Finance and Economy Based Computer Software and Coding Display

cemagraphics

On Holding AG (NYSE:ONON) saw a surge in its stock price during early trading on Wednesday following an investor event held at On Labs in Zurich, Switzerland.

The event featured the announcement of three-year financial targets by On Holding (ONON) and the introduction of strategic building blocks to support the companyโ€™s future growth.

In particular, On Holding (ONON) aims to double its projected net sales for 2023 by 2026, while also increasing its adjusted EBITDA margin to over 18% within the same timeframe.

The company, which operates in the running and athletic footwear industry, believes that there is still significant room for growth in its core areas. As part of its growth strategy, On Holding (ONON) plans to enhance its market share in the running segment, increase brand awareness among its communities, and strengthen its performance credibility and sustainability impact. Additionally, On (ONON) is in the early stages of expanding its geographic presence and sees substantial potential for growth in China.

On (ONON) also unveiled plans to enter selected adjacencies as part of its expansion strategy. This includes establishing a training community and expanding its offerings in tennis. Furthermore, the company aims to create full head-to-toe looks across all its verticals.

Regarding financial guidance, On Holding (ONON) reaffirmed its previous outlook for the full fiscal year. This includes expectations to achieve CHF 1.76 billion in net sales, a gross profit margin of at least 58.5%, and an adjusted EBITDA margin of 15.0%. The companyโ€™s long-term targets include annual net sales growth of 20-25% and an adjusted EBITDA margin surpassing 20%.

As a result of these announcements, shares of On Holding (ONON) experienced a 3.35% rally in pre-market trading on Wednesday.

Key Takeaways

  • On Holding AG (ONON) witnessed a surge in its stock price after unveiling its three-year financial targets and growth strategy at an investor event.
  • The company plans to double its projected net sales for 2023 by 2026 and increase its adjusted EBITDA margin to over 18% within the same timeframe.
  • On Holding (ONON) aims to strengthen its market share in the running segment, enhance brand awareness, and improve performance credibility and sustainability impact.
  • The company is expanding its geographic presence, particularly in China, and exploring new opportunities in adjacent markets.
  • Financial guidance includes a focus on achieving CHF 1.76 billion in net sales for the full fiscal year, with long-term targets for net sales growth and adjusted EBITDA margin.

Frequently Asked Questions

1. What are On Holdingโ€™s three-year financial targets?

On Holding (ONON) aims to double its projected net sales for 2023 by 2026 and increase its adjusted EBITDA margin to over 18% within the same timeframe.

2. What is On Holdingโ€™s growth strategy?

On Holding (ONON) plans to strengthen its market share in the running segment, enhance brand awareness among its communities, and improve performance credibility and sustainability impact. The company is also expanding its geographic presence, particularly in China, and exploring new opportunities in adjacent markets.

3. What are On Holdingโ€™s long-term targets?

On Holding (ONON) has set long-term targets for net sales growth of 20-25% per year and an adjusted EBITDA margin exceeding 20%.

Pros and Cons of On Holdingโ€™s Growth Strategy

Pros

  • Potential for significant growth in the running and athletic footwear industry.
  • Expansion into new markets, including China, presents additional growth opportunities.
  • Focus on brand awareness and sustainability impact enhances long-term credibility and customer loyalty.
  • Diversified product offerings across verticals provide opportunities for cross-selling and upselling.

Cons

  • Execution of ambitious growth targets may pose challenges and require substantial investments.
  • Competition in the sports footwear industry is intense, which may impact market share and profitability.
  • Global economic and geopolitical factors can influence consumer demand for athletic footwear.
  • Potential risks associated with expanding into new markets and adjacent industries.

Overall, On Holdingโ€™s growth strategy presents opportunities for substantial expansion and market share gains. However, challenges and risks should be carefully monitored and managed to ensure the successful execution of the companyโ€™s ambitious targets.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.