Why Swiss-Based Sportswear Brand On Holding Shares Are Falling Today
Portfolio Pulse from Nabaparna Bhattacharya
On Holding AG (NYSE:ONON) shares fell despite Q3 earnings and sales beating estimates and raising FY23 revenue outlook. Q3 adjusted EPS was $0.226, above the $0.16 estimate, and sales were $543.746 million, surpassing the $515.37 million consensus. Sales grew 46.5% Y/Y, with increased gross profit and margin. However, adjusted EBITDA margin slightly decreased, and the company anticipates reduced growth from new wholesale channel doors starting Q4 due to strategic closures in the EMEA region. Early holiday shipments will also affect Q4, making comparisons difficult. FY23 net sales outlook was raised to CHF 1.79 billion, with a gross profit margin expectation of at least 59.0%. ONON shares dropped 3.24% to $25.70 in premarket trading.
November 14, 2023 | 2:16 pm
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On Holding AG reported strong Q3 results with higher earnings and revenue than expected and raised FY23 guidance. However, shares fell due to concerns over reduced growth from new wholesale channels and early holiday shipments affecting Q4.
Despite positive Q3 results and raised guidance for FY23, the stock price of ONON fell due to investor concerns about the company's future growth prospects, particularly with the strategic wholesale door closures in the EMEA region and the impact of early holiday shipments on Q4 results. These factors likely overshadowed the positive earnings report in the short term, leading to a negative impact on the stock price.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100