ONON Stock Forecast & Price Target

On Holding experienced robust sales growth, with total revenues increasing by 23% year-over-year to CHF 744 million in the fourth quarter of 2025, significantly exceeding market expectations. The company's gross margin improved by 180 basis points year-over-year, reaching 63.9%, reflecting efficient cost management and strong product demand, particularly in the footwear segment, which constituted 94% of total sales and grew by 21%. Additionally, the direct-to-consumer channel showed impressive growth, with a 30% increase in constant currency year-over-year, underscoring the brand's expanding market presence and consumer base.

On Holding's financial outlook appears negative due to several key factors, including a reported sales shortfall of CHF 680 million, which fell below expectations and contributed to a depressed stock price. The company is expected to experience a contraction in gross margins of over 50 basis points in 2026, driven by increased markdowns in a highly promotional environment, slowing demand for direct-to-consumer (DTC) sales, and the introduction of new tariffs. Additionally, the anticipated foreign exchange headwinds, along with broader economic concerns such as rising interest rates and weakened consumer confidence, further exacerbate the risks surrounding On's financial performance.