ON (NYSE:ONON) Posts Quarterly Earnings Results, Beats Expectations By $0.18 EPS

Key Points

• ON reported quarterly EPS of $0.65, beating analyst expectations by $0.18, while revenue of $1.11 billion matched estimates and rose 17.2% year over year.
• Sales and margins reached records: Q3 sales were CHF 931.4 million, up 17.8% in constant currency, and underlying gross margin was 66.9%. The company maintained its low-20s full-year sales-growth outlook and raised its gross-margin outlook to about 66%.
• Investors may weigh the strong results against profitability risks: Q3 included a CHF 52.6 million U.S. tariff refund that may not recur, while higher spending is pressuring operating leverage. ON expects Q4 growth to accelerate, led mainly by direct-to-consumer sales.

ON (NYSE:ONON - Get Free Report) issued its earnings results on Tuesday. The company reported $0.65 EPS for the quarter, beating analysts' consensus estimates of $0.47 by $0.18, FiscalAI reports. ON had a net margin of 12.09% and a return on equity of 22.92%. The business had revenue of $1.11 billion for the quarter, compared to the consensus estimate of $1.11 billion. During the same quarter last year, the firm posted $0.43 EPS. The business's revenue for the quarter was up 17.2% compared to the same quarter last year.

Here are the key takeaways from ON's conference call:

• On reported record Q3 sales of CHF 931.4 million, up 17.8% in constant currency, with underlying gross margin at a record 66.9% and adjusted EBITDA margin at a record 21.9% excluding one-off items.
• The company reiterated its full-year sales-growth outlook in the low 20s at constant currency and raised its gross-margin outlook, excluding tariff refunds, to around 66%; it expects Q4 growth to accelerate, led primarily by DTC. Q3 DTC growth was 24.8%, though management said it came in slightly below its internal target.
• New products are showing strong early demand: Cloudsurfer 3 sold through at more than four times the launch-week rate of its predecessor, while LightSpray demand exceeded available supply. On plans to expand LightSpray production, including a Vietnam facility, and roll its new foams across more running franchises.
• Investment in technology, marketing, and new sports is increasing costs: SG&A excluding share-based compensation rose 270 basis points as a share of sales, and management said material SG&A leverage is expected to build from 2027. The company maintained its adjusted EBITDA margin outlook of 19.5%–20%, excluding tariff refunds.

ON Stock Down 0.8%

ONON stock traded down $0.26 during trading on Wednesday, reaching $34.44. The stock had a trading volume of 4,839,695 shares, compared to its average volume of 7,391,102. ON has a 1-year low of $26.36 and a 1-year high of $51.08. The company has a current ratio of 2.83, a quick ratio of 2.25 and a debt-to-equity ratio of 0.25. The company has a market capitalization of $21.98 billion, a P/E ratio of 23.40, a PEG ratio of 0.74 and a beta of 2.05. The firm has a fifty day moving average price of $31.79 and a 200 day moving average price of $36.41.

Analysts Set New Price Targets

Several brokerages have recently weighed in on ONON. Zacks Research raised ON from a "strong sell" rating to a "hold" rating in a research report on Monday, October 12th. Wolfe Research started coverage on ON in a report on Wednesday, October 21st. They set an "outperform" rating and a $47.00 target price on the stock. Robert W. Baird dropped their target price on ON from $70.00 to $55.00 and set an "outperform" rating on the stock in a report on Wednesday, August 12th. BMO Capital Markets reissued a "market perform" rating and set a $35.00 price target on shares of ON in a research report on Wednesday, October 28th. Finally, Wall Street Zen cut ON from a "buy" rating to a "hold" rating in a report on Saturday, July 18th. Two analysts have rated the stock with a Strong Buy rating, twenty-three have given a Buy rating, five have assigned a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $44.11.

Key ON News

Here's some of the latest news about ONON:

• Positive Sentiment: On reported Q3 revenue growth of 17.2%, stronger-than-expected EPS, and 25% growth in direct-to-consumer sales. It also raised its 2026 comparable gross-margin outlook to about 66%, with adjusted EBITDA margin guidance of 19.5%–20%, and expects Q4 growth to accelerate. On raises 2026 gross margin outlook
• Neutral Sentiment: UBS sees a multiyear growth opportunity but cautions that promotional activity could pose a risk. UBS on growth and promotional risks
• Negative Sentiment: The main concern is that Q3 profitability benefited from a CHF 52.6 million U.S. tariff refund, which may not recur. On also left its full-year sales-growth outlook unchanged in the low-20% range, prompting questions about underlying momentum; inventory growth and launch risks add to caution. Barclays trimmed its target to $42 from $44, while Goldman Sachs lowered its target to $41. Analysis of tariff benefit and unchanged outlook

Insider Transactions at ON

In other ON news, CEO Caspar Coppetti acquired 65,000 shares of the company's stock in a transaction on Friday, August 14th. The shares were bought at an average cost of $30.67 per share, for a total transaction of $1,993,550.00. Following the acquisition, the chief executive officer directly owned 2,440,855 shares of the company's stock, valued at $74,861,022.85. This trade represents a 2.74% increase in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, insider Olivier Bernhard purchased 65,000 shares of the company's stock in a transaction that occurred on Friday, August 14th. The stock was bought at an average price of $30.67 per share, with a total value of $1,993,550.00. Following the purchase, the insider owned 5,228,184 shares of the company's stock, valued at approximately $160,348,403.28. The trade was a 1.26% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure.

About ON

On Holding AG, which trades on the New York Stock Exchange under the symbol ONON, is a Swiss sportswear company that develops and sells performance footwear, apparel and accessories. Its products serve runners and other athletes, as well as consumers seeking athletic-inspired everyday wear. The company is known for its running shoes, which feature its CloudTec cushioning technology. On also offers apparel and equipment for activities including running, training and outdoor sports, selling through wholesale partners and its own retail and online channels.

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