On (ONON) Q2 2024 earnings summary

Executive summary

• Net sales grew 27.8% year-over-year to CHF 567.7 million in Q2, surpassing CHF 1 billion in six-month sales for the first time and CHF 2 billion over the last twelve months.

• Strong growth across all channels and regions, with Asia-Pacific and apparel segments leading at 73.7% and 63.0% growth in Q2, respectively.

• Net income surged to CHF 30.8 million in Q2 (up 834.3% year-over-year) and CHF 122.2 million for the first half (up 156.5%).

• Brand momentum driven by innovation (LightSpray), athlete achievements at the Olympics, and high-profile partnerships (Zendaya, Federer).

• Major marketing investments and global retail expansion, including new flagship stores in Paris and Hong Kong, fueled brand awareness and engagement.

Financial highlights

• Gross profit reached CHF 340.2 million in Q2, with a gross margin of 59.9%.

• Adjusted EBITDA margin improved to 16% in Q2, up from 14.1% in Q2 2023.

• Operating cash flow was CHF 102.4 million in Q2, with cash position increasing to CHF 652.4 million.

• Capital expenditures were CHF 16.9 million in Q2 and CHF 26.0 million in H1.

• Q2 adjusted EBITDA was CHF 90.8 million (+44.7% year-over-year).

Outlook and guidance

• Reiterated 2024 constant currency net sales growth expectation of at least 30%, implying CHF 2.26 billion in reported net sales.

• Gross profit margin guidance maintained at around 60%; Adjusted EBITDA margin expected at 16%-16.5%.

• DTC channel expected to outgrow wholesale, with higher gross margin in the second half.

• Focus on scaling North American distribution via warehouse automation.