On Holding Shares Plunge as 2026 Revenue Forecast Disappoints Street
Shares of On Holding AG (NYSE: ONON) faced sharp selling pressure Tuesday after the Swiss running shoe specialist projected revenue growth for 2026 that landed below analyst forecasts, overshadowing a robust fourth-quarter earnings beat.
The company reported fourth-quarter 2025 earnings per share of CHF 0.21, matching estimates. Revenue, however, surged 30.6% on a constant-currency basis to CHF 743.8 million, surpassing the consensus of CHF 727.6 million. The growth was fueled by a 30.0% rise in direct-to-consumer sales to CHF 360.6 million and a 31.2% increase in wholesale revenue to CHF 383.2 million.
Geographically, the Asia-Pacific region led with explosive 85.1% growth. The EMEA and Americas regions posted solid increases of 27.5% and 21.3%, respectively. Profitability metrics also strengthened, with adjusted EBITDA jumping 31.8% to CHF 131 million and the gross margin expanding to 63.9%.
Despite this strong finish to 2025, investor sentiment turned on the outlook. For the full year 2026, On expects net sales to grow at least 23% on a constant-currency basis, implying reported revenue of at least CHF 3.44 billion. This fell short of the analyst consensus estimate of approximately CHF 3.67 billion.
The company attributed the guidance to a "higher comparison base" following its exceptional Q4 performance, framing it as "a further elevation of the Company’s ambition." It forecasts a gross profit margin of at least 63.0% and an adjusted EBITDA margin between 18.5% and 19.0% for 2026.
Market Reaction & Analyst Commentary: The pre-market drop reflects the high-growth premium embedded in On's valuation, where even a slight deviation from lofty expectations can trigger significant volatility. The guidance suggests a deliberate shift towards sustainable, profitable growth after years of hyper-expansion.
Voices from the Street:
"This is a classic case of a great company facing impossible expectations," said Michael Thorne, a portfolio manager at Alpine Capital. "The underlying business is incredibly healthy with fantastic margins and brand momentum. The sell-off is an overreaction and a potential entry point."
"It's a reality check," countered Sarah Chen, an independent retail analyst. "The APAC growth is stellar, but it's from a small base. The guidance indicates saturation in core markets and rising competition. The growth story is slowing, and the valuation needs to reset."
"Management is clearly managing expectations down," said a more pointed David R. Miller of HawkEye Research. "After priming the market for endless hyper-growth, a 'mere' 23% is a disappointment. This isn't about a high base; it's about failing to clear the bar they helped set. The momentum trade is unwinding."
"The focus on profitability is the right long-term move," noted Elena Rodriguez, a veteran sportswear industry consultant. "The margin guidance is impressive. This isn't a broken story; it's a maturing one. The market just needs to adjust to a new phase."