On Holding Ltd

Nike released WNBA star Caitlin Clark's first signature shoe, the Caitlin 1s, on the same day the company reports earnings after the close of trading. Earnings and revenue are both predicted to decline, and the stock is down 44% this year as CEO Elliot Hill approaches his third year with a turnaround still pending. The company has been removed from the S&P 100, Converse revenue has fallen for 13 straight quarters, and Kylian Mbappé defected to On, while the Caitlin 1s are being viewed as the potential catalyst Nike needs. Nike also recently added Alexandra Arnaud to its board.

Nike could be headed for another "reset moment" when it reports earnings later this week, with Evercore ISI analyst Michael Binetti warning that the sportswear giant may need to signal lower second-half fiscal 2027 revenue. Binetti said Nike has likely seen cancellations or negative order revisions from retailers for Spring 2027 since its last earnings call, which he expects to translate into further negativity in the company's fiscal second-half 2027 revenue outlook, and he argued that with a new CFO joining, it might make sense to lower that outlook on this call. The report lands against a rough backdrop: Nike stock is down about 25% since its last earnings report on May 28, trades near a 52-week low, is off 53% from its year-ago peak, and has seen its market cap roughly cut in half since 2021 highs. Nike projected fiscal first-quarter revenues down by low-to-mid-single-digit percentages and reiterated flat earnings per share growth over the next three quarters, excluding benefits from tariff recovery proceeds, after reporting fiscal fourth-quarter revenue of $11 billion, a 1% reported decline and a 4% currency-neutral drop, with diluted earnings per share of $0.72 inflated by a $0.52 per share one-time tariff recovery benefit. Stifel analyst Peter McGoldrick said in his own preview that risk-reward remains hung up on insufficient consumer demand for new products while Hoops Classics, 18% of revenue, continues to shrink, and that at 17x 2027 calendar year price-to-earnings estimates versus a footwear median of 11x, he sees risk to the multiple if the turnaround timeline slips again. The company also faces the loss of soccer icon Kylian Mbappé, who ended his long-term Nike tie-up this month to join Swiss sports giant On, and a brutal late-August warning from Dick's Sporting Goods tied in part to Nike heavily discounting slow-moving product, while CEO Elliott Hill continues to battle execution issues, changing sneaker preferences, cautious consumers, and hungry competitors like On.

Investors turn this week to a heavy earnings and economic calendar headlined by Micron's fiscal fourth quarter report on Wednesday and Friday's September jobs report. Micron's results will be scrutinized for signs of continued demand in the memory trade, which has emerged as one of the most significant bottlenecks for the AI build-out, while Nike reports Thursday as CEO Elliott Hill faces investor concerns and the loss of French soccer star Kylian Mbappé to On. On the data front, economists expect 100,000 jobs added in Friday's September report after August's 162,000 far exceeded the 53,000 estimate, with BNP Paribas forecasting 90,000 and Bank of America forecasting 60,000; Wednesday also brings PCE inflation data, the Fed's preferred metric, watched for whether the FOMC will hike rates again in 2026. Meta's week was dominated by Muse, its new AI agent that Zuckerberg said has millions of users and has topped Apple's App Store and Google's Play Store, with the company planning to take a small cut on transactions made through the agent and extending it to next-generation Meta VR Glasses and the handheld Muse Charm. The extension of the US-China trade truce by two months, to Jan. 10, 2027, was the biggest news from Xi Jinping's first state visit since November 2023, though Trump's team is considering new 7.5% tariffs on China over overcapacity and has delayed action until after this week's meeting. Consumer sentiment fell to 48.1 in September from 51.7 in August, slightly above the Street's 47.5 expectation, as consumers' expectations for their personal finances weakened by about 10%.

On Holding AG authorized a share repurchase program of up to US$1,000.00 million through the end of 2029, appointed Electronic Arts executive Laura Miele as Lead Independent Director, and reiterated its 2026 earnings guidance. The buyback, the board appointment and the guidance reiteration come alongside a long-term football partnership with Kylian Mbappé, which the company is using to push beyond its premium running niche into broader sportswear. On Holding's narrative projects CHF5.4 billion in revenue and CHF681.9 million in earnings by 2029, requiring 19.1% yearly revenue growth and a CHF285.7 million earnings increase from CHF396.2 million today. More cautious analysts expect revenue of about CHF4.9 billion and earnings near CHF526.5 million by 2029, assuming slower growth and some margin pressure even as On leans into innovations like LightSpray and football expansion. The company's forecasts yield a $42.55 fair value, a 42% upside to its current price.

French soccer star Kylian Mbappe has ended a two-decade partnership with NIKE, Inc. to sign with Swiss sportswear brand On, according to a Reuters report dated September 18, 2026, in a deal that includes both cash and equity and gives On Holding AG its first major star as it pushes into soccer for the first time. A source told CNBC that Nike chose not to renew Mbappe's contract as it expired in July 2026, deciding to direct its endorsement spending elsewhere. The signing gives On immediate global credibility ahead of its first soccer boots in 2027, with Thierry Henry serving as director of football and Roger Federer backing the brand, while the equity component aligns Mbappe with On's long-term success. Nike retains a powerful soccer platform despite the loss, still supplying France's national teams through the 2033-34 season and becoming the German national teams' official supplier in 2027, and shares of both companies barely moved after the announcement. On still faces pressure in the Americas, which contribute more than half of its revenue, after missing second-quarter sales estimates and with its shares down approximately 40% in 2026, while Nike has also lost Lamine Yamal to Adidas and the Premier League match-ball contract to Puma.

On Holding AG has signed Kylian Mbappé, ending the forward's nearly two-decade relationship with NIKE, Inc. and marking the Swiss company's first major move into football apparel. Mbappé, who plays for Real Madrid and is the World Cup's all-time leading goal scorer, will serve as a global ambassador and work directly with On's product teams on footwear and apparel design; financial terms were not released, but The Athletic reported the deal includes an equity component alongside cash. On also named football commentator Thierry Henry as its director of football, formalizing a connection in the works since late 2025. Evercore ISI analyst Michael Binetti called the signing a direct challenge to NIKE and adidas, which he described as having a near-monopoly in the football market, and said the investment should act as a solid near-term catalyst for On's stock. The deal lands as NIKE shares are down about 42.95% year to date under CEO Elliott Hill, and after NIKE lost Barcelona's Lamine Yamal to Adidas in 2024. On, which only entered football this year and plans to launch its first football products in 2027, saw hedge fund ownership rise from 52 to 54 between the first and second quarters, while NIKE's fell from 71 funds to 56.

On Holding AG announced a $1 billion share buyback program over the next three years at its Investor Day, sending its shares up 7.58 percent to close at $29.39 on Tuesday. The repurchase, which covers only Class A ordinary shares, reflects the company's strong balance sheet and its push to return more value to shareholders. The company also raised its growth outlook through 2029, targeting high-teens net sales growth on a constant currency basis, with absolute net sales projected to reach at least CHF 5.6 billion, or $7 billion at current exchange rates, a gross profit margin of 65 percent and an adjusted EBITDA margin of 22 percent. For this year, On Holding reaffirmed its full-year 2026 net sales growth outlook of low 20 percent on a constant currency basis, a gross profit margin of 65 percent and an adjusted EBITDA margin of 19.5 percent to 20 percent, figures that exclude an expected $65 million in tariff refunds targeted for the third quarter. Founder and co-CEO Caspar Coppetti said the company is on track to significantly overachieve the targets it gave at its last Investor Day in 2023, committing to premium as its north star through 2029. In the second quarter, On Holding swung to a net income of CHF 105 million from a net loss of CHF 40.9 million a year earlier, as net sales rose 13.5 percent to CHF 850.3 million from CHF 749.2 million, helped by a 26 percent gain in direct-to-consumer and a 47.7 percent jump in apparel sales.

Alibaba shares rose more than 3% after the company unveiled what it called China's most powerful AI chip, claiming three times the performance of its previous generation, and announced plans to expand data center capacity and train a new AI model at the scale of 5 to 10 trillion parameters. On Holding shares climbed 11% as the Swiss sneaker maker said it expects sales growth in the high teens over the next few years while moving into sports including golf and football, though the stock remains down 41% year to date. Viking Therapeutics shares surged about 30% in pre-market trading, having earlier been up more than 50%, after the biotech reported positive top-line results from its VK2735-102 maintenance study showing its experimental obesity drug VK2735 maintained up to 97% of weight loss versus 61% for placebo when subjects switched to every-other-week dosing, with Leerink analysts calling the data stellar and saying it strengthens the drug's competitive profile. The study showed the drug led to 22% weight loss over 33 weeks, positioning it as a potential contender to Eli Lilly and Novo Nordisk. Roche also released positive trial data on its obesity treatment, adding to intensifying competition that left Eli Lilly and Novo Nordisk shares slightly lower.

On Holding shares rose more than 14% in early trading after the company used its Investor Day to lay out financial and product strategy through 2029. Management committed to maintaining a gross profit margin of at least 65% through 2029, well above Nike's most recent annual gross profit margin of about 43%. The company reiterated its full-year 2026 guidance for net sales growth of over 20% on a constant currency basis, and announced plans to repurchase up to $1 billion in shares through 2029. On also said it will enter the soccer market, naming French soccer star Kylian Mbappé as its global ambassador. The stock has lost one-third of its value this year, and investors appeared to call a bottom on the shares after the event.

The Centers for Medicare & Medicaid Services released preliminary reimbursement proposals that could cut laboratory fee payments by as much as 15% starting Jan. 1, 2027, sending Quest Diagnostics down 6.9% and Labcorp down 4.5% in premarket trading. CMS said the proposed changes, based on data from more than 6,400 laboratories, were intended to realign Medicare payments with private-insurer rates, arguing Medicare currently pays laboratories roughly 16% more than private insurers, and estimated the changes could save taxpayers about $1 billion annually. The proposal followed Quest shares reaching a fresh 52-week high of $248.84, and a Truist Securities note maintaining a Hold rating while raising its price target to $260 from $250 did little to offset concerns about lower reimbursement rates for routine clinical testing. Elsewhere in premarket trading, On Holding jumped 6.4% after the Swiss sportswear company said its board authorized the repurchase of up to $1 billion of its Class A ordinary shares through the end of 2029, alongside new long-term growth targets at its investor day. Vicor surged nearly 9.9% after raising its third-quarter 2026 revenue outlook to sequential growth of more than 20% from roughly 10%, citing royalties from its expanding non-exclusive Vertical Power Delivery licensing program, while Endava fell 12% after placing CFO Mark Thurston on administrative leave pending an accounting investigation and appointing Conor McShane of AlixPartners as interim CFO.

Alibaba CEO Eddie Wu said at the company's Apsara Conference that Alibaba Cloud plans to operate more than 20 gigawatts of data centers globally by 2032, according to FactSet, and he also launched the Zhenwu V900 chip. Quest Diagnostics and Labcorp Holdings each dropped more than 5% after the Centers for Medicare & Medicaid Services released a report showing Medicare has been paying 16% more for laboratory services than private payors, with the federal entity saying it will align most Medicare payments with private sector rates. Vicor rallied 9% after the power electronics company issued third quarter guidance forecasting sequential revenue growth of more than 20% quarter over quarter, versus prior guidance of nearly 10%. On Holding jumped more than 6% after the Swiss sportswear company set new midterm financial targets at its Investor Day, including absolute net sales reaching at least CHF5.6 billion by 2029 and gross profit margin of 65% throughout the period, and said it will repurchase up to an aggregate of $1 billion in Class A ordinary shares by December 2029 while reiterating its full year 2026 outlook. GameStop gained 3.5% after CEO Ryan Cohen disclosed a purchase of 1.2 million shares.

Stifel analyst Peter McGoldrick slashed his earnings-per-share estimates on Nike by $0.20 for fiscal years 2027 and 2028, citing near-term risk from increased promotional activity on Nike products in the US. McGoldrick said his hang-up on risk-reward remains insufficient consumer demand for new products, while Hoops Classics, which accounts for 18% of revenue, continues to shrink, and he flagged risk to the multiple at 17x CY27E P/E versus a footwear median of 11x if there is another delay to the turnaround timeline. The call adds to a rough stretch for Nike, whose stock is down 44% this year and 51% over the past year, and which will be removed from the S&P 100 today, ending an 18-year streak. Soccer icon Kylian Mbappé ended his long-term business tie-up with Nike last week and announced he will join Swiss sports giant On, while Dick's Sporting Goods warned in late August about its business in part because Nike is heavily discounting slow-moving product. In late June, Nike reported fiscal fourth quarter revenue of $11 billion, a 1% decline on a reported basis and a 4% drop on a currency-neutral basis, with diluted earnings per share of $0.72 distorted by a $0.52 per share one-time benefit from an expected tariff recovery. Nike projected fiscal first quarter revenues to be down by low-to-mid-single-digit percentages and reiterated flat earnings per share growth over the next three quarters, excluding benefits from tariff recovery proceeds, while Evercore ISI analyst Michael Binetti wrote that there are no hints yet that revenues can turn positive in the foreseeable future.

On Holding AG's apparel category surged 47.7% year over year to CHF 54.2 million in the second quarter of 2026, up 56.2% on a constant-currency basis, as the segment rapidly gains scale beyond footwear. Tennis remained the fastest-growing apparel vertical, with sales nearly tripling in the quarter, while the Zendaya co-created collection exceeded expectations and the Volt collection lifted running apparel to a record 28% share of On Holding's running-campaign net sales. Companywide, second-quarter net sales rose 13.5% to CHF 850.3 million, direct-to-consumer sales climbed 26% and accounted for 45.7% of revenues, and gross margin expanded to 65.4%, with management guiding to constant-currency sales growth in the low-20% range for 2026. For comparison, Deckers Outdoor Corporation posted first-quarter fiscal 2027 sales of $1.02 billion, up 5.7%, including HOKA revenues of $704 million and UGG sales of $278 million, while Wolverine World Wide reported second-quarter 2026 revenues of $506.4 million, up 6.8%, with Sweaty Betty sales of $40.3 million, down 2.4% on a planned U.S. market reset. On Holding shares have lost 27.8% over the past three months against a 15.7% industry decline, and the stock carries a Zacks Rank #5 (Strong Sell).

On Holding AG raised its 2026 gross-margin outlook to at least 65% from at least 64.5%, citing a richer direct-to-consumer mix and operating efficiencies, even as new U.S. tariffs and wholesale restraint pose risks. The company reported second-quarter constant-currency sales growth of 21.6% and gross margin expansion of 390 basis points to 65.4%, with adjusted EBITDA margin rising to 19.8% from 18.2%. Direct-to-consumer sales grew 34.3% at constant currency, reaching 45.7% of net sales, up from 41.1% a year earlier, while wholesale grew only 12.7%. Management expects full-year 2026 constant-currency net sales growth in the low-20% range, deliberately restraining wholesale sell-in to protect channel health. Additional Section 301 tariffs imposed in July 2026 are expected to increase duties, and the incremental earnings impact was not quantified, leaving second-half execution critical.

On Holding AG reported second-quarter 2026 net sales of CHF 850.3 million, a 21.6% increase at constant currency, driven by strong direct-to-consumer demand across all regions. Direct-to-consumer sales reached CHF 388.4 million, growing 34.3% at constant currency and representing a second-quarter record of 45.7% of total sales, while wholesale sales rose 12.7% at constant currency to CHF 461.9 million as the company deliberately moderated sell-in to protect full-price integrity in a promotional environment. Gross profit margin expanded to 65.4% from 61.5% a year earlier, and adjusted EBITDA was CHF 168.1 million, a 19.8% margin. By region, Asia-Pacific sales surged 54.7% at constant currency to CHF 170.5 million, EMEA grew 20.5% to CHF 228.2 million, and the Americas increased 13.0% to CHF 451.6 million. The company raised its full-year gross margin guidance to at least 65.0% and reiterated its adjusted EBITDA margin outlook of 19.5% to 20.0%, while forecasting constant-currency net sales growth in the low 20% range for fiscal 2026.

On Holding AG reported first-quarter 2026 results that exceeded expectations, with adjusted earnings of 47 cents per share on net sales of $1.06 billion, both above consensus. In Swiss francs, net sales rose 14.5% to CHF 831.9 million, while adjusted EBITDA margin expanded 450 basis points to 21%. Gross margin improved 430 basis points to 64.2% despite higher U.S. import duties, and management now expects full-year gross margin of at least 64.5%. The company maintained its at least 23% constant-currency net sales growth target for 2026, with direct-to-consumer sales rising 16.4% to CHF 322.3 million and Asia-Pacific sales surging 61.4% at constant currency.

On Holding AG is introducing a midsole made of captured carbon emissions, rolling out the CleanCloud technology in its Cloud X 5 sneaker. The midsole uses Infinium's eNaphtha, created from captured carbon dioxide and hydrogen, as a renewable alternative to petroleum-based naphtha, which Borouge International then converts into ethylene-vinyl acetate pellets. A life cycle assessment indicates an 80 percent carbon emissions savings compared to conventional manufacturing, and On is ramping up production to 1 million pairs, attributing the rapid scale-up to direct relationships with chemical companies that enabled a drop-in solution in existing reactors.

Higher-income Americans are becoming increasingly important to apparel and footwear sales as widening economic inequality produces sharp differences in shopping frequency, price sensitivity, and technology adoption, according to Bernstein analyst Aneesha Sherman. Consumers in the highest income quintile spend 3.4 times more on apparel than those in the lowest quintile, while the top 40% of earners generate roughly 60% of total spending in the category. The findings were based on a November 2025 survey of 3,750 U.S. consumers and demographic data covering thousands of retail locations. Affluent shoppers purchase clothing more frequently and across a broader range of companies, with consumers earning over $100,000 buying from an average of 22 of the 54 brands and retailers surveyed during 2025, compared with 15 among those earning less than $50,000. Nearly 90% of respondents earning above $100,000 said they would pay full price for an item they wanted, versus about 70% of consumers earning below $50,000. Inflation has reinforced the divide, as affluent households were more likely to spend additional money as prices increased, while lower-income consumers cut purchase volumes and allocated more of their budgets to food, housing, and other necessities. Technology could widen the gap further, with nearly three in four higher-income consumers using artificial intelligence services, compared with about half of lower-income shoppers. Bernstein rated On Holding Outperform with a $70 price target, Tapestry Outperform with a $180 target, and TJX Companies Outperform with a $175 target, citing their exposure to affluent customers.

Zacks Investment Research recommends On Holding as a strong growth stock, citing its favorable Growth Score and top Zacks Rank. The company's earnings per share are projected to grow 82.8% this year, far above the industry average of 17.4%. Year-over-year cash flow growth stands at 2.7%, compared to an industry average of negative 2.4%, while its annualized cash flow growth rate over the past three to five years is 90% versus the industry's 14.2%. The Zacks Consensus Estimate for current-year earnings has risen 2.8% over the past month, supporting the stock's Zacks Rank #1 (Strong Buy) and Growth Score of A.

Nike’s self-inflicted missteps are jeopardizing CEO Elliott Hill’s nascent turnaround, even as the company reports modest North American revenue growth of 3%. Sales in China fell 12%, market share in running shoes is slipping to rivals like On and Hoka, and Converse revenue is in free fall. A Boston Marathon ad that appeared to mock slower runners, a merchandise supply failure ahead of the World Cup, and a decision to scale back financial disclosures including sales by gender have all added to concerns. BNP Paribas analyst Laurent Vasilescu called the reduced transparency a red flag, especially since women’s was supposed to be a long-term growth driver. Nike shares are down 75% from their all-time high five years ago and have fallen by about half since Hill became CEO in 2024.

A UBS survey of European consumer spending in May shows On, Crocs and Birkenstock as the top-performing footwear brands, with On sales up 12 percent year-over-year, Crocs up 8 percent and Birkenstock up 1 percent. In contrast, Hoka, Vans and Ugg saw declines over the same period. Over a two-year basis, On, Crocs and Birkenstock also led, with Hoka ranking high. UBS analyst Jay Sole highlighted On's focus on innovation and direct-to-consumer selling as drivers of industry-leading growth, and expects strong performance to continue with a significant innovation cycle starting in October.

Nike shares have fallen to their lowest level in more than 11 years, trading at prices last seen during the Obama presidency, according to Yahoo Finance AlphaSpace data. The stock is down 36% this year and 43% over the past 12 months. The decline comes ahead of Nike's fiscal fourth quarter earnings report on Tuesday, where the company is expected to show sales down 2% to 4% and gross profit margins lower by 25 to 75 basis points. The company faces a challenging restructuring under CEO Elliott Hill, increased competition from Adidas and On Holding, and continued pressure in its China business, where sales fell 10% in the prior quarter. Stifel analyst Peter McGoldrick warned that a dominant market position may not translate to value creation without a shift in consumer preference or a reinvigoration of innovation, and said he is not ready to call a bottom on the shares.

The Motley Fool argues that MercadoLibre and On Holding are better growth stock investments than SpaceX. MercadoLibre's revenue grew 49% year over year in the 2026 first quarter, with unique active buyers up 26% and fintech monthly active users up 29%, yet its stock trades at only 43 times trailing earnings, near a 10-year low. On Holding posted 26% currency-neutral sales growth in the same period, with gross margin improving to 64.2% and profit margin widening to 12.4%, while its U.S. brand penetration reached 30% for the first time. Both companies are profitable and trade at lower valuations than SpaceX, which has a 105 price-to-sales ratio and lacks profitability.

Nike's stock has shed nearly 70% over the past five years, and investors are watching closely as CEO Elliott Hill's 'Win Now' turnaround strategy faces its next test when earnings are released on June 30. The plan aims to rebuild wholesale channels, streamline operations, and upgrade technology, but challenges such as tariffs, a 10% year-over-year sales decline in China, and rising competition from brands like On Holding and Hoka are weighing on the company. Analysts suggest the turnaround will take years rather than quarters, and a wait-and-see approach may be prudent for investors.

Nike shares have fallen nearly 65% over the past five years, yet the stock does not appear attractively valued given ongoing sales challenges. The company’s fiscal third-quarter revenue was flat year over year, but after removing foreign-currency effects, revenue actually declined 3%. Management missteps, including a shift toward direct-to-consumer sales that alienated wholesale partners, and a lack of innovative products have allowed competitors like Adidas, On Holding, and Deckers Outdoor’s Hoka brand to take market share. New CEO Elliott Hill, who returned in October 2024, is refocusing on sports, but top-line growth has yet to materialize. With a price-to-earnings ratio of 30, only slightly below the S&P 500’s multiple of 32, the stock may be a value trap until there is evidence of a sustained turnaround.