Swiss running shoe brand On reported a 92% jump in fourth quarter revenue Tuesday that crushed analyst expectations. It also raised guidance for 2023, sending the stock up 25% in early trading.
On’s full-year revenue was $1.3 billion (CHF 1.22 billion), up 69% versus the prior 12 months, while net income was $62 million versus a $184 million loss in 2021, based on current exchange rates. On now expects sales to reach “at least” $1.84 billion (CHF 1.7 billion) for its next fiscal year, citing “exceptional demand” and a “strong product pipeline.” Analysts had previously projected the company to post $1.64 billion (CHF 1.52 billion) in revenue, according to S&P Capital IQ.
For the fourth quarter, On reported $396 million in revenue, 33% ahead of the $297 million analysts had expected, according to S&P.
“After navigating through a challenging 2022, including supply shortages, tight production capacities and disruption of global trade lanes, we are looking forward to a great year with largely normalized operations,” Martin Hoffmann, co-CEO of On, said in a press release announcing earnings. “We have made significant progress in many areas in the 18 months since our IPO, which will set us up for ongoing success and market share gains.”
North America remains the company’s most important market, representing 60% of sales, and the company expects revenue there to top $1.1 billion in 2023.
On launched in 2010 and has built a cult-like following with its “cloud” technology that provides the basis for the cushioning system in its shoes. The brand got a boost in 2019 when Roger Federer invested in the company as part of an endorsement agreement following his split with Nike. His stake is estimated to be in the 3% range and valued at roughly $200 million, based on the company’s current market value.
On introduced its first tennis shoe, the Roger Pro, in 2021 and made a further commitment to the sport this week with a pair of high-profile endorsement signings, following the retirement of the 20-time Grand Slam winner in 2022. Polish tennis star Iga Świątek, 21, who is currently ranked No. 1 by the WTA, and 20-year-old rising American Ben Shelton, who’s ranked has soared from 541 to 39 over the last 12 months, are new On brand ambassadors.
“Iga and Ben represent the next generation of world-class talent. Both players demonstrate On’s competitive spirit and embody current and future champions of the sport,” Federer said in a statement.
In addition, Kenyan professional distance runner Hellen Obiri, who runs for the On Athletics Club and is sponsored by On, won the NYC Half Marathon last Sunday.