On Holding AG reported record second-quarter 2025 net sales of CHF 749.2 million, representing a 38.2% increase on a constant currency basis. Direct-to-consumer (DTC) net sales surged by 54.3% at constant currency, reaching a new Q2 high of 41.1% of total sales.
The company achieved significant profitability expansion, with the gross profit margin reaching 61.5% and the adjusted EBITDA margin climbing to 18.2%, up 220 basis points year-over-year. This margin growth was driven by higher DTC share, lower freight expenses, and favorable foreign exchange tailwinds.
On Holding AG raised its full-year 2025 net sales growth guidance to at least 31% year-over-year on a constant currency basis, an increase from its previous guidance of at least 28%. This implies reported net sales of at least CHF 2.91 billion, reflecting strong momentum.
The gross profit margin guidance for 2025 was also raised to a range of 60.5% to 61%, up from 60% to 60.5%. This increased outlook already accounts for a 20% incremental tariff on imports to the U.S. from Vietnam, up from the previously assumed 10%.
Management implemented selective price increases in the U.S. as of July 1, 2025, particularly in the lifestyle segment, and believes no further price increases are needed to achieve these margin targets. July 2025 marked the strongest month in the brand's history, and the APAC region delivered its third consecutive quarter of triple-digit growth.
While the company reported a net loss of CHF 40.9 million in Q2 2025, this was primarily an unrealized foreign exchange impact due to the U.S. dollar's weakness against the Swiss franc, not a reflection of operational health. The adjusted EBITDA margin for 2025 is projected to be in the range of 17% to 17.5%.
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