On (ONON) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 net sales of CHF 635.8 million, up 32.3% year-over-year, with strong profitability expansion and operational improvements, driven by D2C growth and global brand momentum.

• D2C channel net sales grew 49.8% (50.7% constant currency) to CHF 246.7 million, now 38.8% of total sales, up 450 bps from last year.

• APAC region net sales grew 79.3% (85.7% constant currency), now 11.7% of total business, led by China, Japan, and South Korea.

• Brand awareness surged in the U.S. and Paris, supported by Olympic presence and partnerships with Zendaya and FKA twigs.

• Running remains the largest community, with strong launches like Cloudsurfer Next and LightSpray technology gaining recognition.

Financial highlights

• Gross profit margin reached 60.6% in Q3, up 70 bps year-over-year, and adjusted EBITDA margin was 18.9%, up from 16.9%.

• Net income was CHF 30.5 million despite a CHF 37.2 million unrealized FX loss; net income margin was 4.8%.

• Positive cash flow of over CHF 125 million in Q3 and CHF 250 million year-to-date; cash balance near CHF 750 million.

• Capital expenditures were CHF 19.1 million (3% of net sales); lowest inventory position in 12 months.

• Q3 2024 adjusted EBITDA: CHF 120.1 million (+47.7%); Q3 2024 gross profit: CHF 385.3 million (+34.0%).

Outlook and guidance

• Raised full-year 2024 constant currency net sales growth ambition from at least 30% to at least 32%, targeting CHF 2.29 billion in net sales.

• Full-year gross profit margin expected around 60.5%; adjusted EBITDA margin at the upper end of 16%-16.5%.

• Q4 constant currency growth rate expected to exceed Q3, with continued strong D2C and wholesale momentum, but sizable FX headwinds.