On (ONON) Q2 2024 earnings summary

Executive summary

• Net sales grew 27.8% year-over-year to CHF 567.7 million in Q2 2024, surpassing CHF 1 billion in six-month sales and CHF 2 billion over the last twelve months.

• Strong growth across all channels and regions, with Asia-Pacific and apparel segments leading at 73.7% and 63.0% growth in Q2, respectively.

• Net income surged to CHF 30.8 million in Q2 (up 834.3% year-over-year) and CHF 122.2 million for the first half (up 156.5%).

• Continued brand momentum driven by innovation (LightSpray), athlete achievements at the Olympics, and high-profile partnerships (Zendaya, Federer), along with retail expansion in Paris and Hong Kong.

• Focus on long-term, innovation-led growth, with significant marketing investments to build durable brand value.

Financial highlights

• Q2 net sales: CHF 567.7 million (+27.8%); H1 net sales: CHF 1,075.9 million (+24.4%).

• Q2 gross profit: CHF 340.2 million (+28.6%), gross margin 59.9%; H1 gross profit: CHF 643.6 million (+26.3%), gross margin 59.8%.

• Q2 adjusted EBITDA: CHF 90.8 million (+44.7%), margin 16% (up from 14.1%); H1 adjusted EBITDA: CHF 168.2 million (+36.0%), margin 15.6%.

• Q2 net income: CHF 30.8 million (+834.3%); H1 net income: CHF 122.2 million (+156.5%).

• Cash and cash equivalents rose to CHF 652.4 million as of June 30, 2024 (+32% from Dec 2023).

Outlook and guidance

• Reiterated 2024 constant currency net sales growth expectation of at least 30%, implying CHF 2.26 billion in reported net sales.

• Full-year gross margin expected around 60%, and adjusted EBITDA margin between 16%-16.5%.

• DTC channel expected to outgrow wholesale, with higher gross margin in the second half.

• Focus on scaling North American distribution via warehouse automation.