On Holding's Surging Apparel Sales Broaden Its Growth Opportunities

On Holding AG’s ONON apparel business is becoming an important growth pillar beyond footwear. Its performance-driven products, premium positioning and credibility across running, tennis and training are encouraging customers to buy complete outfits. This broadens the company’s addressable market, strengthens consumer relationships and reduces its long-term reliance on shoes.

The category delivered standout growth in the second quarter of 2026. Apparel sales jumped 47.7% year over year to CHF 54.2 million and increased 56.2% on a constant-currency basis. By comparison, footwear sales rose 10.9% as reported, demonstrating that apparel is rapidly gaining scale and becoming a meaningful revenue driver.

Growth was supported by several key product areas. Tennis remained On Holding’s fastest-growing apparel vertical, with sales nearly tripling during the quarter. The Tennis Court collection generated strong growth and sell-through, while the Zendaya co-created collection exceeded expectations. Running apparel also benefited from the continued expansion of the Volt collection.

Volt helped apparel reach a record 28% share of On Holding’s running-campaign net sales. Meanwhile, the proprietary SenseTec fabric is attracting younger female consumers, an important target group. Apparel represents a higher sales mix in company-owned stores, suggesting that On Holding’s expanding direct-to-consumer (DTC) network can accelerate cross-category purchases.

The opportunity is supported by strong companywide fundamentals. Second-quarter net sales rose 13.5% to CHF 850.3 million, while DTC sales climbed 26% and accounted for 45.7% of revenues. Gross margin expanded to 65.4% in the second quarter and management expects constant-currency sales growth in the low-20% range for 2026. Together, these trends position apparel as a significant avenue for sustainable premium growth.

DECK & WWW’s Sales Momentum vs. ONON

Deckers Outdoor Corporation DECK generated first-quarter fiscal 2027 sales of $1.02 billion, up 5.7% year over year. HOKA revenues increased 8% to $704 million, while UGG sales rose 5% to $278 million. DECK reported an encouraging response to UGG’s spring apparel offering, particularly its fleece collection. The collection performed well across the United States, Europe and Asia, highlighting broad-based demand. HOKA’s apparel and accessories also complement its growing performance and lifestyle footwear portfolio. Overall, Deckers views apparel as a promising category for expanding consumer engagement and usage occasions.

Wolverine World Wide WWW delivered second-quarter 2026 revenues of $506.4 million, up 6.8% year over year. Sweaty Betty, its premium women’s activewear brand, generated sales of $40.3 million, down 2.4% due to the planned U.S. market reset. WWW’s apparel performance showed improving underlying momentum, with Sweaty Betty growing approximately 3% excluding the reset’s impact. UK DTC sales increased mid-single digits, supported by growth in bottoms and outerwear. Wholesale and distributor revenues across Europe and Asia-Pacific advanced at a strong double-digit rate, while shorts also recorded robust growth. Overall, Wolverine is strengthening its apparel platform through Sweaty Betty and a planned Saucony women’s apparel capsule.

ONON’s Price Performance, Valuation & Estimates

On Holding’s shares have lost 27.8% over the past three months compared with the industry’s 15.7% decline.

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From a valuation standpoint, ONON trades at a trailing price-to-sales ratio of 2.05, above the industry’s average of 1.30. 

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The Zacks Consensus Estimate for ONON’s fiscal 2026 earnings implies year-over-year growth of 78.4%, whereas the same for fiscal 2027 indicates an uptick of 16.1%. Estimates for fiscal 2026 have been revised downward by 4 cents, while those for fiscal 2027 have been revised downward by 15 cents over the past 60 days.

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On Holding currently carries a Zacks Rank #5 (Strong Sell).

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This article originally published on Zacks Investment Research (zacks.com).

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