The news: Premium sportswear brands On and Hoka continued to grow despite challenges in the broader market.

On's Q3 2026 sales rose 17.2% YoY, with direct-to-consumer (D2C) revenues increasing 25%. Its gross margin climbed to 72.6%, or 66.9% excluding US tariff refunds, from 62.5% a year earlier. The company expects full-year sales to grow in the low-20% range on a constant currency basis, with a gross margin of around 67.5%, or 66% excluding tariff refunds.

Hoka's sales rose 6.8% in Deckers’ fiscal Q2 2027, and the brand is expected to deliver high-single-digit growth for the full year.

Why this matters: Both brands resisted pressure to discount, prioritizing profitability and premium positioning over short-term sales gains.

• Deckers CFO Steve Fasching acknowledged that Hoka's restrained promotional activity may have weighed on US D2C sales. But that discipline helped lift Deckers' gross margin to 59.9% from 57.5% a year earlier. As Fasching put it, “We don't want to chase revenue that is not productive to the brand or profitability.”
• On highlighted its ability to gain share among younger, culturally influential consumers while maintaining full-price selling, even as competitors leaned into promotions.

Consumers remain willing to pay a premium for products they perceive as innovative, comfortable, and distinctive, but brands must keep reinforcing that value as they expand beyond their running roots. The gap between On’s 17.2% sales growth and Hoka’s 6.8% shows how hard that momentum is to sustain.

On is broadening its appeal beyond footwear. Apparel revenues jumped 38.7%, supported by collaborations with Loewe, Sky High Farms, and Burna Boy, as well as athlete partnerships. Lifestyle sneakers and new sports partnerships are also helping the brand reach new audiences without sacrificing its premium positioning.

Implications for retailers and brands: Consumers will still pay a premium when they believe a product is worth the splurge, as On’s and Hoka’s results demonstrate. Their growth makes the case for product innovation, brand differentiation, and pricing discipline in a promotional market.

But consumer tastes shift quickly, and that appeal gets harder to sustain as the brands scale. Expanding into new categories and broader audiences creates growth opportunities but also risks diluting what made On and Hoka distinctive.

Sustaining their pricing power will require balancing that expansion with the technical credibility, disciplined distribution, and strong consumer demand that made them premium brands in the first place.

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