On Holding (NYSE: ONON)
On Holding (NYSE: ONON) is doing something few in the athletic footwear space have managed to pull off: it’s scaling rapidly and improving profitability—at the same time. That’s not something you see every day in retail.
Sales jumped 43% year over year in the most recent quarter, putting the company ahead of its own target to grow revenue at a 26% annualized rate through 2026. Even more impressive? On is now converting more than 10% of revenue into profit, compared to Nike’s single-digit margins on a trailing 12-month basis.
What that tells us is key: On isn’t discounting to chase growth. Customers are paying full price for its performance shoes—driven by its proprietary CloudTec cushioning that combines soft landings with explosive takeoffs. That kind of product-led demand gives the brand pricing power, which translates into healthier margins and more reinvestment potential.
But On isn’t just a performance running brand anymore. Its shoes are crossing into lifestyle territory, becoming go-to everyday sneakers across a global base that now spans 80 countries. Apparel is also showing early traction, up 40% year over year, suggesting the brand’s identity is starting to resonate beyond footwear.
Annual sales are approaching $3 billion, which puts On in a sweet spot: big enough to prove it’s not a fad, but still small enough to grab major share in a massive industry. Management’s playbook—focused on brand expansion, online growth, and protecting profitability—looks built for durable long-term returns.
For investors looking for the next great consumer brand with serious runway, On is starting to feel like a name worth holding.
