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On Holding CEO Martin Hoffmann expects a possible boost from lower US tariff rates after the Supreme Court struck down the government’s emergency levies, even as the fast-growing Swiss sportswear brand offered a cautious sales outlook for the year on Tuesday.
Shares fell nearly 12 percent in early trading after On forecast at least 23 percent annual sales growth on a constant-currency basis, moderating from 30 percent in 2025, but still ahead of larger rivals Nike and Adidas.
The company expects its annual gross margin to rise to at least 63 percent, up from 62.8 percent in 2025, with the outlook not yet reflecting any benefit from lower tariffs.
The US, On’s biggest market, began collecting a temporary 10 percent blanket tariff on imports last week, with the administration planning to lift it to 15 percent. Even at that level, the rate would be well below the additional 20 percent duty imposed last year on countries such as Vietnam and Indonesia, where On sources much of its production.
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“If we see 15 percent becoming the new reality, this would be an additional upside to the guidance that we gave,” Hoffmann told Reuters.
Hoffman added that On has also filed for tariff refunds and would reinvest any proceeds in the business rather than pass them on to consumers.
“For a company that has struggled to combat a deceleration narrative, (the sales forecast) sets management back a step,” William Blair analysts said in a note. Meanwhile, Guggenheim’s Simeon Siegel sees the forecast as conservative.
Fourth‑quarter sales rose 22.6 percent to 743.8 million Swiss francs ($949.69 million), beating analysts’ expectations of 724.3 million, helped by limited discounting during the holiday season. Adjusted core earnings rose 31.8 percent to 131 million francs.
A focus on affluent shoppers has helped On, while brands targeting lower-income consumers have been burned as they cut spending in an increasingly polarised economy, especially in the US
“The strong product pipeline that we have, the innovation that we bring to the market, and that premium position is really building momentum globally, and is resonating with the customer globally,” Hoffmann said, adding the brand plans 10 to 15 store openings this year.
By Neil J Kanatt, Helen Reid
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