The news: Growth for sneaker brands On and Hoka slowed in the most recent quarter, as each focused on protecting their premium positioning over wholesale expansion.

• On’s Q2 net sales rose 13.5% YoY, 1 percentage point below its Q1 performance and nearly one-third the growth rate recorded in the year-ago quarter.
• Hoka’s net sales rose 7.7% in fiscal Q1 ended June 30, nearly half the growth rate seen in the previous quarter.

Zoom out: Both brands’ D2C businesses are growing significantly faster than wholesale, which could reflect a more competitive market for running shoes and a deliberate push to prioritize higher-margin channels.

• On’s wholesale revenues grew just 4.8%, which CEO David Allemann blamed on a “highly promotional multibrand marketplace, particularly in the Americas” that led to lower-than-expected sellout for some key franchises.
• Hoka’s global wholesale revenues rose by 3%, a development that parent company Deckers said reflected a shift in timing for international shipments.

However, On and Hoka are tackling the wholesale problem differently.

• On is keeping back inventory to protect its pricing power and brand desirability—a move the company admitted could affect its second-half financial results.
• Meanwhile, Hoka will add new selling partners in the second half to “help elevate and champion the brand,” which Deckers expects will cause wholesale revenues to accelerate.

Implications for retail: On and Hoka have benefited from several years of breakneck growth, but that momentum is fading with rising competition from giants like Nike and adidas, as well as indie brands like Salomon and Brooks Running.

• On’s decision to prioritize inventory discipline over growth could safeguard margins—but also give competitors an opening to take over valuable shelf space at key retail partners.
• For Hoka, more widespread retail distribution could drive sales in the short term, but it could also lead to excess inventory and discounting that erodes overall brand desirability.

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