Swiss running shoe brand On reported second quarter earnings Wednesday that exceeded expectations and put the company on track for its first $1 billion year for revenue in 2022.
Sales for the quarter rose 67% to $306 million (CHF 291.7 million) with the North American market leading the way amid 102.5% growth. It is the biggest territory for the company, making up 62% of total revenue. Sales also doubled in Japan. Net income was up nearly 250% to $51.6 million.
“Our team has done an outstanding job to efficiently manage product flows in what we expect to be the near final stages of supply shortages stemming from last year's factory closures,” Martin Hoffmann, co-CEO, said in a press release on the results. “As we continue on our mission to ignite the human spirit through movement, we are thinking long-term and our goal is to build a durable company at the intersection of performance, design and impact.”
The company raised full-year revenue guidance 6% to $1.15 billion and says the brand is now available in more than 8,600 stores globally.
On, which launched in 2010, has built a cult-like following with its “cloud” technology that provides the basis for its cushioning system. It has stressed its environmental chops with shoes made in part from recycled plastic bottles. On has a subscription service that allows customers to return the shoes at the end of their life for recycling.
The brand’s profile got a boost in 2019 when Roger Federer invested in the company as part of an endorsement agreement following his split with Nike after two decades. His stake, which is less than 5% per SEC filings, is estimated to be in the 3% range and valued at roughly $200 million, based on the company’s $7.5 billion market cap. On introduced its first tennis shoe, the Roger Pro, in 2021.
Federer ranked eighth in Sportico’s 2022 ranking of the world’s highest-paid athletes with $85.7 million, including $85 million from endorsements and royalties.
“The Roger is obviously a very important franchise for us,” Caspar Coppetti, On co-founder, said during the company’s earnings call. He said to expect updates to The Roger this fall and teased a special-edition Federer product that is scheduled to be released on Aug. 25 ahead of the U.S. Open.
Last fall, the company raised $746 million in its IPO. The stock surged 46% on its first day of trading but sunk more than 50% over the next 10 months to a low of $16 in July. Shares have since rebounded but were off 2% in early trading after the earnings announcement to $24.