Finance
Sportswear brand on sees possible boost from lower US tariff rate
Published by Global Banking & Finance Review®
Posted on March 3, 2026
3 min readLast updated: March 3, 2026
Quick Summary
Swiss sportswear maker On Holding sees upside from potential U.S. tariff cuts after the Supreme Court invalidated emergency levies, and delivered strong Q4 results with 22.6% sales growth, forecasting 23% constant‑currency growth in 2026.
Sportswear brand On sees possible boost from lower US tariff rate
On Holding's Performance and Impact of US Tariff Changes
By Helen Reid
March 3 (Reuters) - On Holding sees lower U.S. tariff rates after the Supreme Court struck down the government's emergency levies as a possible boost for the fast-growing Swiss sportswear brand, CEO Martin Hoffmann said on Tuesday as it delivered strong quarterly results.
Sales Growth and Market Comparison
The company, which sells running shoes for $150 and up, forecast at least 23% sales growth in 2026 on a constant-currency basis — moderating from the 30% growth reported in 2025, but still outpacing bigger rivals Nike and Adidas.
On shares, however, were down 11% in premarket trading amid broader market declines.
Profit Margin Outlook
The company sees annual profit margin increasing to at least 63% from 62.8% in 2025, with the outlook not yet factoring in a lower U.S. tariff rate.
US Tariffs and Sourcing Impact
The U.S., On's biggest market, began collecting a temporary new 10% blanket tariff on imports last week, with plans to lift it to 15%. Even then, it would remain well below the additional 20% duty imposed last year on countries such as Vietnam and Indonesia, key sourcing hubs for On.
CEO Comments on Tariff Changes
"If we see 15% becoming the new reality, this would be an additional upside to the guidance that we gave," Hoffmann told Reuters.
Tariff Refunds and Reinvestment Strategy
Hoffmann also said On was among the companies that have filed for tariff refunds and that any proceeds would be reinvested in the business rather than passed on to consumers.
Quarterly Results and Consumer Focus
The company's fourth-quarter sales rose 22.6% to 743.8 million Swiss francs ($949.69 million), helped by limited discounting during the holiday season. Analysts' on average estimated 724.3 million francs, according to data compiled by LSEG.
Target Market and Brand Momentum
A focus on affluent shoppers has helped On, while brands targeting lower-income consumers have been burned as they cut spending in an increasingly polarized economy, especially in the U.S.
"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 that the brand plans 10 to 15 store openings this year.
Financial Highlights
Quarterly adjusted earnings before interest, taxes, depreciation and amortization rose 31.8% to 131 million francs.
($1 = 0.7832 Swiss francs)
(Reporting by Neil J Kanatt in Bengaluru and Helen Reid in Paris; Editing by Shilpi Majumdar)
Key Takeaways
- •Supreme Court ruling clears way for lower U.S. tariffs, which could further strengthen On’s margins and growth outlook (USTR signaled 10%, possibly rising to 15%) (apnews.com)
- •On Holding’s Q4 sales beat expectations (CHF 743.8 mln vs CHF 724.3 mln est.) and it forecasts robust 2026 sales growth of at least 23% with margin expansion to ≥ 63%, excluding tariff benefits (apnews.com)
- •On’s premium positioning, innovation‑led DTC model and healthier margins outperform peers like Nike, which faces margin pressures due to tariffs and slower growth (nasdaq.com)
References
Frequently Asked Questions about Sportswear brand On sees possible boost from lower US tariff rate
1How could lower US tariff rates impact On Holding?
Lower US tariff rates could provide a financial boost to On Holding by improving profit margins and enhancing sales outlook in its biggest market.
2What is On Holding’s outlook for annual profit margin?
The company expects its annual profit margin to increase to at least 63% from 62.8% in 2025, without yet factoring in lower US tariffs.
3How did On Holding perform in the recent quarter?
On Holding reported a 22.6% rise in fourth-quarter sales to 743.8 million Swiss francs and a 31.8% increase in adjusted EBITDA.
4Will tariff refunds be passed on to consumers?
On Holding’s CEO stated that any tariff refunds received would be reinvested in the business rather than passed on to consumers.
