Swiss performance brand On Holding AG is recalibrating its retail distribution strategy, accepting top-line pressure in exchange for gross margin defense. The brand’s Q2, FY27  net sales increased by 13.5 per cent Y-o-Y to CHF 850.3 million ($1.05 billion)—missing consensus estimates = as wholesale revenue growth moderated to 4.8 per cent. Rather than engaging in broad market discounting amid cautious consumer spending, On deliberately restricted wholesale order allocations to preserve brand positioning. Consequently, management raised the company's full-year gross margin guidance to at least 65 per cent.

Direct-to-consumer channel drives global expansion

This operational rebalancing is supported by momentum across direct-to-consumer (DTC) channels. DTC revenue increased by 26 per cent to CHF 388.4 million, accounting for a record 45.7 per cent of overall sales. Strategic store openings in Copenhagen and São Paulo, combined with a 54.7 per cent constant-currency sales gain in Asia-Pacific, reflect On’s plan to scale physical retail and capture higher-margin apparel sales.

Sector implications and executive outlook

The brand is intentionally prioritizing profitability and full-price selling over short-term sales volume, notes a brand executive, addressing import tariffs and promotional market trends. As legacy athletic wear brands manage excess inventory, On's focus on premium placement offers a distinct strategy for navigating retail volatility.

Brand architecture and financial profile

Founded in Zurich in 2010, On Holding AG manufactures premium performance running footwear and sportswear utilizing patented CloudTec technology. Operating in North America, Europe, and Asia-Pacific, the firm is expanding its global store network, targeting full-year 2026 sales between CHF 3.47 billion and CHF 3.56 billion.