The strategy: Swiss sneaker brand On Holding won’t offer discounts this holiday season, co-founder and executive co-chairman Caspar Coppetti told CNBC.
The move aims to reinforce On’s premium positioning and differentiate it from rivals likely to rely on discounts and promotions to lure cost-conscious shoppers.
Will it work? The approach appears sound for a brand whose sales keep outperforming expectations despite selling some of the industry’s most expensive running shoes. Even after raising prices in July, On’s Q3 results topped forecasts.
- Adjusted earnings per share were 36 cents in francs (45 cents), up 300% YoY.
- Revenues were 794 million francs ($995.3 million), up 24.9%, and ahead of the 763 million francs ($956.5 million) analysts expected.
While competitors such as Deckers-owned Hoka and Nike have voiced caution about the macroeconomic outlook in the US and abroad, On remains upbeat about the holiday season. The company raised its full-year guidance for the third straight quarter and now expects 2025 sales to rise 34% YoY on a constant-currency basis, up from a prior forecast of 31%.
Our take: On is carving out a position in the “accessible luxury” space, similar to Ralph Lauren and Tapestry, but within performance footwear rather than fashion. Like those brands, On’s strong brand equity and disciplined product strategy have helped it withstand softness across the broader apparel and luxury markets.
These results highlight the K-shaped economy: High-income consumers continue to spend, while lower- and middle-income groups pull back. In October, for instance, spending among higher-income households rose 2.7% YoY, versus just 0.7% for lower-income groups, per the Bank of America Institute.
As long as On continues innovating with launches like the Cloudboom Strike LS, the performance shoe worn by New York City Marathon winner Hellen Obiri, it should stay ahead of macro headwinds and maintain its growth momentum.