The news: Swiss footwear company On Running raised its full-year sales and gross margin outlook, citing broad-based geographical strength as Gen Z consumers scoop up its premium-priced athletic shoes.

• Net sales are now expected to rise 31% YoY to CHF 2.91 billion ($3.3 billion), up from its prior view of CHF 2.86 billion ($3.25 billion).
• The company forecast gross margin at a range of 60.5% to 61%, compared with the prior view of 60% to 60.5%.
• The company said its outlook includes the effect of US reciprocal tariffs.

Sales in the second quarter jumped 32% to CHF 749.2 million.

• Ecommerce strength was evident, with direct-to-consumer sales rising 47% and wholesale revenues up 23%.
• Every region delivered growth, with sales rising about 43% in Europe, the Middle East, and Africa; about 17% in the US, its largest market; and more than doubling (101.3%) in Asia-Pacific.

Standing out against rivals: On’s results have outshined larger competitors. Adidas posted Q2 revenues that trailed analyst estimates last month, and Puma cut its full-year sales and profit guidance, citing headwinds including tariffs.

“The brand has incredible momentum all around the world,” CEO Martin Hoffmann said during the company’s earnings call.

Looking ahead: Hoffmann said tariffs aren’t new for the retail industry and noted that On has “multiple opportunities” to offset higher tariffs, from boosting its D2C mix to recent US price increases. He said the company could also discuss mitigation strategies with its retail and factory partners, should that be necessary.

Hoffmann stressed that despite the challenges, there will be “no compromise” on innovation and quality. The company’s success shows that consumers value and will pay up for products that combine performance, style, and brand prestige. This commitment should continue to differentiate On and heighten rivalry in an already competitive market.

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