On Holding stock down 9% as Q4 net sales miss the mark By Investing.com

On Holding (ONON) saw its share price plummet more than 9% in premarket trading Tuesday after the footwear and sports apparel company posted Q4 net sales below analysts’ estimates.

Specifically, net sales in the quarter came in at CHF 447.1 million, below the projected CHF 451.8 million.

However, the company outperformed estimates in adjusted EBITDA and gross profit, posting CHF 71.9 million and CHF 270.2 million respectively, against forecasts of CHF 66.3 million and CHF 268.1 million.

The company achieved a gross profit margin of 60.4% in Q4 2023, surpassing its mid-term goal of exceeding 60%.

Looking ahead to the first quarter of 2024, On expects to see a rise in its direct-to-consumer (DTC) sales share and anticipates a constant currency net sales growth rate of 26%.

For the full year 2024, the company is aiming for a gross profit margin of around 60%, consistent with its mid-term ambition, and an adjusted EBITDA margin between 16.0% and 16.5%.

“We are proud to look back at a year filled with milestones that highlight On’s unique position in the market,” said On’s co-founder and executive co-chairman David Allemann.

“As we look to further expand our presence in the global premium sportswear market, we have put a big emphasis on building awareness for our apparel offering,” he added.

“Based on the recent success, new and updated products and supported by our own retail store rollout, we expect to significantly build this category over the next years.”