On Aims to Double Sales Despite Market Challenges
On, the activewear brand, has announced ambitious plans to nearly double its net sales to 5.6 billion Swiss francs ($6.8 billion) by 2029. This growth strategy comes just days after the company’s entry into the soccer market.
To achieve this goal, On is targeting a high-teens constant currency growth rate for net sales, with a projected low-20% range for 2026. The company also aims to maintain a gross profit margin of 65% or higher and reach an adjusted EBITDA margin of over 22% by 2029.
Growth Drivers and New Ventures
On’s growth will primarily be driven by its core categories: running, sneakers, and apparel. However, the brand is also diversifying into new areas, such as soccer and golf. The company’s recent entry into soccer has already made waves, with the signing of superstar Kylian Mbappé from competitor Nike.
On’s Chief Design Officer, Thilo Brunner, highlighted the brand’s distinctive design language, which has sparked AI-generated speculation about its upcoming soccer cleats. The company is working closely with Mbappé, Thierry Henry, and Sydney Schertenleib to develop products that are both visually appealing and high-performing.
Analysts’ Skepticism and Market Challenges
Despite On’s optimistic projections, analysts have expressed skepticism about the company’s ability to meet its targets. Jefferies analysts, led by Randal Konik, noted a deceleration in growth from 36% to 13% over six quarters. They predict a 3% growth rate from 2026 to 2027 and an EBITDA margin of 14.8% in 2027, falling short of On’s goals.
The athletic industry is facing a challenging external environment, with Needham analyst Tom Nikic warning of a low-teens compound annual growth rate for On over the next three years. However, Nikic acknowledged that On’s strategy of reining in wholesale sell-in and avoiding discounting is a smart move to protect the brand’s long-term health.
Soccer Expansion and Brand Visibility
Chief Marketing Officer Alex Griffin noted that entering soccer has knock-on effects, increasing visibility for other product lines. The company aims to leverage its soccer partnerships to strengthen its overall brand presence and appeal to a broader audience.
