Swiss performance brand On, which floated on the New York Stock Exchange in September, has reported a strong end to the year despite supply chain challenges.
In the three months to September 30, the running shoe specialist reported a 53.7 percent year-over-year increase in net sales to CHF 191.1 million, with the direct-to-consumer business growing 76.7 percent to CHF 84.7 million, and wholesale up 39.3 percent to CHF 106.4 million.
Despite the strong sales, the company’s net loss in the quarter widened to CHF 187 million from CHF 2.6 million a year earlier. Its adjusted EBITDA in the fourth quarter stayed flat at CHF 11.2 million.
For the year, On made record net sales of CHF 724.6 million, a 70.4 percent increase from the prior year. Breaking it down by channel, direct-to-consumer sales were up 71.9 percent to CHF 275.8 million, while wholesale sales were up 69.5 percent to CHF 448.8 million.
Net loss widens
On’s annual net loss widened to CHF 170.2 million from CHF 27.5 million a year earlier, but its adjusted EBITDA increased 93.8 percent to CHF 96.4 million.
Co-CEO and CFO Martin Hoffmann said: “A year is like a marathon race. The circumstances of the fourth quarter made the last miles even more challenging. But thanks to our whole team we were able to exceed our expectations for Q4 and to successfully finish the year with many new record numbers.”
Hoffmann said the brand continues to see “strong demand” across all regions and product categories with North America and China showing “exceptional” growth rates.
He added that, “importantly”, the brand’s production capacity in Vietnam has been back at 100 percent of the pre-lockdown commitments since December 2021. On has also started production at its first facility in Indonesia.
Looking ahead, On said it expects supply chain disruption to have a “short-term and transitory” impact on the first half of the current year.
It expects fiscal 2022 net sales to exceed CHF 990 million, which would represent year-over-year growth of at least 37 percent.
On expects 2022 annual adjusted EBITDA to reach CHF 130 million, and its adjusted EBITDA margin to reach 13.1 percent.