Swiss brand On approves $1 billion maiden buyback plan, charts 2029 financial goals

On Holding Approves $1 Billion Buyback Plan and Reveals 2029 Financial Targets

On Holding's Strategic Moves and Financial Outlook

By Neil J Kanatt

Share Buyback Authorization

Sept 22 (Reuters) - On Holding on Tuesday authorized its first share buyback, worth up to $1 billion through the end of 2029, and unveiled long-term financial targets, as it bets on growth in apparel, sneakers and new sports categories.

US-listed shares of the company rose about 13% in morning trading, after falling about 40% so far this year.

Expansion and Brand Partnerships

The company, a prominent maker of running shoes with brands such as CloudTec, has been battling slowing growth, especially in its key Americas market, but is now planning to enter the world's most popular sport: soccer.

Soccer Market Entry

The Roger Federer-backed company last week signed French soccer star Kylian Mbappe, a partnership that has raised the brand's profile as it seeks to chip away at the dominance of Nike, Adidas and Puma in the sport.

Long-Term Financial Targets

2029 Financial Goals

Ahead of its investor day on Tuesday, On outlined targets through 2029, including high-teens annual constant-currency sales growth. It expects a gross profit margin above 65% and an adjusted EBITDA margin of more than 22% for that period.

2026 Forecast

For 2026, the Swiss sportswear maker reiterated its forecast for low-20% constant-currency sales growth, a gross margin of at least 65% and an adjusted EBITDA margin of 19.5% to 20%.

Tariff Refunds Impact

The annual forecast excludes the benefit from tariff refunds of up to 53 million Swiss francs (about $65 million) expected in the current quarter, it added.

2029 Net Sales Projection

It forecast 2029 net sales of at least 5.6 billion Swiss francs ($6.83 billion), almost double the 3.01 billion Swiss francs it generated last year.

Analyst Reactions

Optimistic Analyst Perspective

"These are aggressive targets, but On's management sounds confident," Morningstar analyst David Swartz said, adding that he had expected buybacks to start only in 2027 and at a smaller scale.

Cautious Analyst View

Jefferies analyst Randal Konik, however, was more cautious.

"We would rather see a beatable bar than a bold one," Konik said.

Recent Performance and Additional Details

On expects third-quarter constant-currency revenue growth of about 17%.

The company said it had received about 28 million Swiss francs in refund proceeds as of mid-August, when it reported second-quarter net sales below estimates due to weakness in the Americas segment.

($1 = 0.8203 Swiss francs)

(Reporting by Rishabh Jaiswal and Neil J Kanatt in Bengaluru; Editing by Mrigank Dhaniwala, Diti Pujara and Leroy Leo)