Roger Federer-backed shoemaker On Holding AG raised its full-year profit forecast after seeing sales boom in North America and reducing reliance on air travel.
Net sales will likely reach 1.1 billion Swiss francs ($1.2 billion) in 2022, against a previous target of 1.04 billion Swiss francs, the Zurich-based company said in a statement on Tuesday. That’s a bit higher than the average analyst estimate.
The new athletic shoe brand is looking to expand beyond its previous cult following and seeks to appeal to younger consumers. Founded in 2010, the company is known for the distinctive tubular cushions in the soles and the endorsement of Swiss tennis champion Federer, who became an investor in 2019.
Building on its Swiss roots, the company’s largest market is North America, where second-quarter sales more than doubled from a year earlier to 182 million Swiss francs. On also posted a growth rate of 18 percent in Europe and 52 percent in Asia-Pacific.
“The United States is currently the engine of growth,” Martin Hoffmann, co-CEO and CFO, said in an interview.
On’s shares have risen 2 percent since the company’s initial public offering in New York nearly a year ago. That outpaced bigger rivals including Adidas AG, Puma SE and Nike Inc., whose shares fell last year.
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While the US stock listing has helped boost brand awareness in the country, On is also benefiting from higher sales at retailers such as Foot Locker Inc. and Nordstrom Inc., Hoffmann said.
The company has raised prices in the US by about $10 on newly released products and plans to raise the cost of existing sneaker models this coming spring. A similar strategy is envisioned for Europe, except for Switzerland, he said.
“On is a premium brand, so we clearly see that we have pricing power in the market,” said the co-CEO.
While On has attracted a lot of interest from consumers looking to wear casual sneakers, this year it gained the most market share in the core brand from serious runners. That’s thanks, in part, to the new highly cushioned Cloud Monster and the more support-oriented Cloudrunner, Hoffmann said.
The company relied more on air freight to deal with supply shortages brought on by pandemic-related factory closures in Asia last year. It hopes to reduce that for the rest of this year, reserving the shipping method to ensure availability of its most recently launched products.
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The company raised $746.4 million in its initial public offering after its shares traded above its target, before rising a further 46 percent to end the day at $35.