On Holding AG (NYSE:ONON) surpassed the fourth-quarter earnings and revenue expectations while delivering CHF100 million ($112.48 million) in apparel sales in 2024. During its earnings call, the performance sportswear maker highlighted its new store openings and expansion plans as well.

What Happened: On Holding, for the very first time, broke CHF100 million ($112.48 million) in apparel sales, highlighted Marc Maurer, the co-CEO of the firm.

He added that the segment had a lot of “potential” and the company anticipates the sales figure to be much higher in the future.

“Our ambition to be a true head-to-toe sportswear brand is solidified in the fact that we have reached more than CHF100 million in net sales from apparel,” said the co-CEO and CFO Martin Hoffmann. Maurer added that the company aims to bring apparel sales up to 10% of the total revenue.

“In 2024, we launched 19 new retail stores in iconic locations. Think Champs-Elysees in Paris, Vittorio Emanuele in Milan, Ross Street in Chicago, and Emporium, Melbourne,” said David Allemann, the executive co-chairman and co-founder of On.

Roger Federer, who reportedly owns 3% of the company, was also thanked by Allemann for increasing the brand awareness in the U.S. and amongst Gen Z during the earnings call.

“We credit that to our strengths of blockbuster partnerships with Zendaya, FKA Twigs, with Roger Federer, and a whole roster of young tennis players, Ben Shelton, for example, Iga Swiatek, Joao Fonseca,” Allemann added.

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Why It Matters: On Holding exceeded fourth quarter sales expectations with 35.7% year-on-year growth, reaching CHF 606.6 million or $682.297 million. The company’s gross margin expanded to 62.1%, and adjusted EPS beat estimates.

On forecasts continued growth in 2025, with at least a 27% sales increase and an EBITDA margin between 17.0% and 17.5%, on track to achieve its 18% target by 2026. While management’s 2025 revenue and gross margin guidance came in slightly short of expectations, the company “tends to provide guidance it can exceed,” said analyst Cristina Fernández from Telsey Advisory Group.

Price Action: On Holding rose 5.81% on Tuesday and advanced 1.11% in after-hours. The stock remains 8.56% lower on a year-to-date basis, however, it’s up 53.28% over a year.

Benzinga tracks 29 analysts with an average price target of $54.61 for the stock, reflecting a “buy” rating. Estimates range widely from $33 to $73. Recent ratings from Williams Trading, Needham, and Telsey Advisory Group average at $64.33, suggesting a potential 25.68% upside.

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