On Holding AG — Blitz Index 57 (C)

On Holding scores 57 — a premium running brand whose constant-currency growth (+21.6%) is hidden by FX, and whose margin beat tariffs without a refund.

Last re-scored: October 25, 2026.

Score breakdown

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Radar axes (0–100): Moat 60 · Speed 68 · Creative 66.7.

Watch item

Gates: G1 ✓ (confirmed) · G2 ✓ (borderline estimate — bar ≈ CHF 32.2B requires top-3 global performance-brand share). 8 points below the threshold — first score. Financials are reported in CHF (filing currency; not converted to USD).

Strengths

• Constant-currency growth +21.6% in Q2 2026 and +24.0% in H1 — the reported +13.5% hides an 8.1pp FX drag
• Gross margin 62.8% → 65.4% in Q2, raised to 65%+ for the year, while absorbing US tariffs (no refund assumed)
• DTC share 45.7% (from 41.1%) plus APAC +43.1% and apparel +47.7% — a three-layer second curve
• Cash CHF 1,019.9M at end-2025 with effectively no borrowings and SBC at just 2.2% of sales
• Full-price discipline held — no discounting to chase wholesale growth

Concerns

• Reported growth is decelerating and Q2 missed consensus (CHF 850.3M vs ~CHF 878–881M expected)
• FY2025 FX loss of −CHF 173.2M cut net income −15.9% while operating profit rose +78.2%
• Founder team holds ~56.1% of combined voting power (20-F) — a structural governance discount
• Wholesale grew only +4.8% — the price-integrity trade-off
• Manufacturing concentrated in Vietnam and Indonesia, with US tariff absorption still a burden

Research notes

Thesis: a premium running brand, priced like one, growing like one — but not yet a market ruler

On Holding AG (NYSE: ONON) is a Swiss company that went public on the New York Stock Exchange in September 2021, and this is its first BlitzLab scoring, dated 25 October 2026. The score is 57 out of 100, grade C, eight points short of the 65-point club threshold. That single sentence already contains the whole story of this page: On is strong enough to clear both BlitzLab gates, disciplined enough to defend a premium price, and profitable enough at the gross-margin line to absorb a tariff shock — yet it is not, on the evidence available at the scoring date, a company that dominates its market. It is, in the score file's own phrase, a leader in premium running rather than a ruler of the market.

The scoring date matters here, and it should be stated plainly at the outset. T is 25 October 2026. The latest results in the file are the first half and second quarter of 2026, published on 11 August 2026. Third-quarter 2026 results fall after T and are excluded from this assessment, and the company itself had not announced a third-quarter reporting date as of T. Anything that happened after 25 October 2026 therefore appears below only as a future marker, never as evidence for the score. All money figures are in Swiss francs (CHF) unless stated otherwise, because On reports in CHF; any United States dollar conversion would not be a filing fact and is not asserted here.

The headline numbers trace a company still growing at a serious pace. Net sales were CHF 2,318.3 million in fiscal 2024, CHF 3,014.0 million in fiscal 2025 — growth of 30.0 percent — and CHF 3,220.4 million on a trailing-twelve-month basis at T. On that basis the file classifies On as a mature company, which is a classification about scale, not about age or excitement. The growth story, however, comes with a translation problem that runs through the entire assessment: reported growth and constant-currency growth tell visibly different stories, and which one a reader trusts changes the impression of the quarter. Reported growth in the second quarter of 2026 was 13.5 percent, but that figure includes an 8.1 percentage point foreign-exchange headwind. On a constant-currency basis, second-quarter growth was 21.6 percent, and first-half constant-currency growth was 24.0 percent, against reported first-half growth of 14.0 percent. The score file's first key driver is blunt about the implication: judged on reported growth alone, On looks slower than it is; judged on constant-currency growth, the growth engine is still running. That distinction is not a footnote. It is the difference between a company decelerating and a company whose underlying demand is still expanding while currency moves against it.

The second gate result sharpens the thesis further. BlitzLab's second gate asks whether a new market's ten-year ceiling is at least ten times current sales. Ten times trailing-twelve-month sales of CHF 3,220.4 million gives a bar of roughly CHF 32.2 billion, and the file records a pass — but explicitly a borderline one, built on press-reported and estimated market figures rather than on company disclosures. The footwear market is put at 173.19 billion dollars in 2025 rising to 224.32 billion dollars in 2030, and footwear plus sportswear apparel together at a combined pool of roughly 400 billion dollars or more. Against the combined pool, On would need a share of roughly 8 to 9 percent; against footwear alone, roughly 18 percent. Either way, clearing the bar requires On to enter the global top three performance brands. The company's own mid-term revenue goal of CHF 6.0 billion, set out at an Investor Day in September 2026 on a press-reported basis, is nowhere near the bar — and the file is careful to say that the mid-term goal is not the ten-year ceiling, so it is not grounds for failure, but the gap between the goal and the bar is itself a marker of how far On still has to travel. A borderline gate pass, in other words, is not a comfortable pass. It is a pass with the distance still visible.

Speed: growth obscured by currency, capital in reserve, distribution shifting

Speed contributes 17 of a possible 25 points, which converts to 68.0 on the radar chart's 100-point scale — the strongest of the three axes, and the section where the currency story does its most work. The growth item itself scores 7 of 10. The evidence is the constant-currency pair, 21.6 percent in the second quarter and 24.0 percent in the first half, set against fiscal 2025 growth of 30.0 percent, and the judgement that constant-currency growth is the truer picture of the business than reported growth. Two things hold the item below 8. First, reported growth is decelerating, and the 8.1 percentage point exchange headwind in the second quarter is part of that deceleration even if it is not a demand problem. Second, second-quarter sales of CHF 850.3 million came in below a press-reported consensus range of roughly CHF 878 to 881 million. A miss against expectations is not the same as a weak business — the file treats it as a gap between market expectations and underlying reality — but it is a reason to withhold the top marks, and the score does so.

Capital speed scores 4 of 5, and here the evidence is unusually clean. Cash stood at CHF 1,019.9 million at 31 December 2025, borrowings were effectively absent, and in September 2026 the company announced a 1 billion dollar share repurchase programme, on a press-reported basis. That combination is a demonstration of capital capacity: a company with more than a billion francs of cash and essentially no debt can fund expansion, absorb shocks, and return capital at the same time. The withheld fifth point is a matter of direction rather than capacity. A repurchase programme, by definition, sends capital back rather than deploying it into the contest for market share, so the file treats it as slightly reducing the war chest even while it evidences the strength that makes such a programme possible. The tension is worth holding in mind: the same fact that proves financial strength also trims the resources available for the next round of expansion.

Hiring and productivity score 3 of 5. Full-time-equivalent headcount was 3,963 in 2025, up from 3,254 in 2024 and 2,353 in 2023, all confirmed from the annual report. Revenue per employee rose from CHF 0.76 million in fiscal 2025 to CHF 0.81 million on a trailing-twelve-month basis, and the comparison the file draws is instructive: employment grew 21.8 percent while sales grew 30.0 percent, so productivity improved even as the workforce expanded by more than a fifth. The withheld marks reflect structure and measurement. The absolute level of revenue per employee is low for a company of this kind because the headcount includes manufacturing and retail roles, and the series is measured on a full-time-equivalent basis, which limits how far the productivity inference can be pushed. Growth with improving productivity is a genuine positive; it is not, on this evidence, a productivity story of the kind that would earn a higher mark.

Share-gain speed scores 3 of 5, and this is where the second growth curve first appears in detail. The direct-to-consumer share of sales reached 45.7 percent, up from 41.1 percent. The Asia-Pacific region grew 43.1 percent. Apparel grew 47.7 percent in the second quarter, to CHF 54.2 million. The direction of share expansion is unambiguous: more of the sale is direct, more of it comes from Asia-Pacific, and more of it comes from a category beyond footwear. But wholesale grew only 4.8 percent, and the file links that restraint directly to the company's pricing principle, discussed below: under a policy of holding price and avoiding discounting, the pace at which share can be taken through wholesale channels is limited. There is also a disclosure limit that matters. No disclosed figure for On's own share of the footwear market exists in the file, so the item cannot be scored on measured share itself, only on the direction of the mix. A higher mark is withheld for that reason, and the withholding is honest: direction is not the same as destination.

Moat: a brand that commands a margin, a distribution system still partly rented

Moat contributes 36 of a possible 60 points, or 60.0 on the radar scale — the weakest axis in relative terms, and the section that explains why a company with a 65.4 percent gross margin still scores only 57 overall. The four moat items pull in different directions, and the tension between them is the most interesting thing in the file.

Network effects score 6 of 18, and the reasoning is deliberately deflationary. On has a genuine runner-community brand effect, and the file does not deny it. But footwear carries low switching costs: a customer who wants to leave the brand pays almost nothing to do so. There is no user-to-user network that becomes more valuable as more people join, and no lock-in that makes departure expensive. The file applies the same 6-point ceiling it applies to e.l.f. Beauty on the same logic, and the comparison is instructive precisely because the two companies sell entirely different products. The shared point is structural, not cosmetic: a beloved brand is not the same as a network, and BlitzLab scores the difference.

Distribution scalability scores 11 of 18, the strongest moat item, and it rests on a four-layer structure: direct-to-consumer sales at 45.7 percent of the total, premium wholesale, the company's own stores, and Asia-Pacific expansion. That is brand-led distribution, and the file credits it as such. The same 11-point mark as e.l.f. Beauty appears again, for the same structural reason: distribution that depends on retailers and on lease terms is partly rented rather than owned. On controls more of its route to the customer than a pure wholesale brand does, and the rising direct share proves the direction, but it cannot fully escape dependence on landlords and retail partners. Eleven points is therefore a strong but capped judgement: scalable, brand-led, and still conditional.

Market size scores 9 of 12, reflecting the borderline second-gate pass described above. The market itself is enormous — the combined footwear and sportswear apparel pool of roughly 400 billion dollars or more leaves no doubt about that — but the score is about On's demonstrated claim on that market, not about the market's size in the abstract. Reaching the bar requires top-three entry, and On's demonstrated share does not yet evidence that position. Nine points thus records a large opportunity with an unproven claim, which is exactly the combination that makes the gate pass borderline rather than comfortable.

Gross margin scores 10 of 12, and this is the moat's crown. The gross margin was 62.8 percent in fiscal 2025 and rose to 65.4 percent in the second quarter of 2026, an improvement of 3.9 percentage points, with full-year guidance raised to 65 percent or above. What makes the quarter notable is the context: the margin expanded while the company was absorbing United States tariffs, and it did so without building tariff refunds into guidance. The file contrasts this explicitly with e.l.f. Beauty, whose margin figure includes refunds, and treats On's unrefunded, tariff-absorbing expansion as the higher-quality achievement. The two withheld points reflect a structural ceiling rather than a complaint: a gross margin in the mid-60s percent range is close to the plausible upper bound for premium footwear, so further expansion from here cannot simply be assumed. Ten points for a margin that rises through a tariff shock is a strong mark; the withheld points are a reminder that the margin has less room left to run than it has already covered.

Taken together, the moat section describes a company whose defensibility rests on brand and price integrity rather than on lock-in or on owned distribution. That is a real moat — the margin proves that customers will pay for it — but it is a moat that must be re-earned with every purchase decision, because nothing prevents the customer from choosing differently next time.

Creative destruction: displacing the legacy order at the premium edge, not replacing it

Creative destruction contributes 10 of a possible 15 points, or 66.7 on the radar scale. The section asks whether On is displacing an existing order, changing behaviour irreversibly, and restructuring costs — and the file's answers are measured rather than triumphal.

The order being displaced scores 4 of 5. The target is clearly identified: the legacy running order centred on Nike and Adidas, displaced at the premium edge by Swiss-engineered CloudTec positioning. The withheld point is about the verb. On has not replaced the legacy running market; it has carved out, and continues to be granted, the premium segment of it, while coexistence with the legacy leaders continues. Displacement at the premium edge is a real achievement, and the file credits it with 4 points, but it is not the same as displacing the order itself, and the score refuses to pretend otherwise.

Irreversible behaviour change scores 3 of 5. Premium running is becoming habitual, woven into daily life and lifestyle routines, and apparel growth of 47.7 percent is cited as a signal of that habituation — a customer who buys the apparel as well as the shoe is living with the brand beyond the run. But the signal is small in scale, at CHF 54.2 million for the quarter, and the underlying behaviour is not yet an irreversible standard, because the cost of switching brands remains low. Habituation in progress is not habituation completed, and the file scores the distinction.

Cost-structure change scores 3 of 5. The mechanism is real: premium pricing plus a rising direct mix collapses the wholesale margin stack, and the policy of holding price and avoiding discounting preserves price integrity through the channel. That is a genuine restructuring of how distribution costs and margins are divided. But manufacturing itself is outsourced, concentrated in Vietnam and Indonesia, so what has changed is closer to a redistribution of the margin stack than to a destruction of the underlying cost structure. Three points record a real change in the economics of selling, honestly bounded by the fact that the economics of making have not been similarly transformed.

The blitzscaling fit analysis in the file ties these threads together. The primary growth lever is brand — premium positioning built on the CloudTec Swiss-engineering story. The secondary lever is distribution, through direct sales and Asia-Pacific expansion, but it remains secondary because dependence on the footwear core is still high. The weak levers are network effects and technology: there is no user-to-user network, and outsourced manufacturing means technology is not the moat. The speed-versus-efficiency trade-off has been resolved, at least for now, in favour of efficiency: the company accepted wholesale growth of only 4.8 percent rather than discount, choosing price integrity over volume, and the 65.4 percent margin is presented as the compensation for that choice. The file's overall staging judgement is that On is in an acceleration phase of premium expansion, with the footwear core still growing and the second curves — apparel, direct sales, Asia-Pacific — advancing at the same time, and it names the company an expansion company whose key question is whether the second curve, above all apparel, scales to a meaningful share.

Deductions and risks: a clean balance sheet, a volatile bottom line, a concentrated vote

Deductions total minus 6, well below the minus 15 threshold that would trigger a flag, so no flag is attached to this score. That headline, however, conceals a more interesting internal pattern: the balance sheet is clean, the bottom line is volatile, and the governance structure concentrates control. Each deduction item tells a different part of that story.

Debt scores 0, the best possible outcome. There is no borrowing trigger, and the file is explicit that lease liabilities of CHF 521.5 million are operating leases and are not treated as debt. Share-based compensation is low at 2.2 percent of sales. There is, on this evidence, no debt or dilution deduction to make, and none is made.

Revenue quality scores minus 1, and the reasoning deserves attention because it runs against the direction of the operating story. In fiscal 2025 the company recorded a foreign-exchange loss of CHF 173.2 million, against a gain of CHF 67.7 million in the prior year. The swing drove pre-tax profit down 26.6 percent and net income down 15.9 percent, even as operating profit rose 78.2 percent. The file is clear that this is not operating deterioration — the operating line moved strongly in the opposite direction — but the volatility of reported net income is itself a quality deduction. A reader who looked only at net income would conclude that the business shrank; a reader who looked only at operating profit would conclude that it surged. Both readings are incomplete, and the minus 1 records the cost of that incompleteness: currency volatility makes the bottom line a noisier signal than the operating performance warrants.

Governance scores minus 3, the largest single deduction, and it is structural rather than episodic. Class B voting shares numbered 341,241,680 against Class A shares of 296,873,353 at the end of the annual-report period, and each Class B share carries ten times the voting power of a Class A share on a capital-invested basis. The founder extended team, the sole holder of Class B shares and also a holder of some Class A shares, holds approximately 56.1 percent of combined voting power, confirmed from the annual report. The file warns explicitly against confusing this with the 12.8 percent economic stake shown in 13G and 13A filings: economic ownership and voting control are different things here, and the voting figure is the one that governs. A minus 3 in the 51 to 59 percent band records a durable concentration of control that no single quarter's results can change.

Regulatory and social cost scores minus 2. The company is absorbing United States tariffs without reflecting refunds in guidance — the same fact that burnishes the gross margin also constitutes a real burden — and manufacturing is concentrated in Vietnam and Indonesia. No major ongoing sanction is in progress. Two points is therefore a measured deduction: a live cost pressure and a geographic concentration, without a major enforcement overhang.

The file's own statement of the maximum blitzscaling risk sharpens all of this into a single sentence: if premium becomes mass, On risks becoming simply a footwear company rather than a premium one. The logic follows from everything above. Blitzscaling's premise is that speed creates a moat, but On's speed depends on brand premium. If that premium is diluted — through discounting, through over-expansion into the mass market, or through legacy leaders occupying the same premium ground — then the foundations of the 57 points, the 65.4 percent margin and the 45.7 percent direct share, would shake. The risk is not that On fails; it is that On succeeds so broadly that it stops being premium, and the score's structure makes that risk legible rather than hypothetical.

What to watch: apparel scale, wholesale recovery, and the next reporting date

The watch list that follows from the file is short, because the file's evidence is specific, and a short watch list is more useful than a long one padded with generalities.

First, apparel scale. Apparel grew 47.7 percent in the second quarter but from a base of only CHF 54.2 million for the quarter. The file names apparel's scaling — from that quarterly level to a meaningful share of the total — as a condition for club entry, alongside wholesale recovery. The question is not whether apparel can grow quickly from a small base; it already does. The question is whether it can grow large enough to change what kind of company On is, from a footwear company with an apparel line into a company with two genuine growth curves. That is a multi-quarter question, and no single quarter will answer it.

Second, wholesale recovery under the pricing principle. Wholesale grew 4.8 percent while direct sales rose to 45.7 percent of the total. The file presents this as the price of holding price: volume growth forgone to protect price integrity. The watch item is whether wholesale can re-accelerate without discounting, or whether the direct channel must carry an ever-larger share of growth. Either outcome is informative. Wholesale recovery without discounting would suggest that the premium position is strengthening through the trade channel as well as directly; continued wholesale stagnation would suggest that the pricing principle has a growth cost that compounds over time.

Third, the currency veil. The gap between reported growth of 13.5 percent and constant-currency growth of 21.6 percent in the second quarter, and between 14.0 percent and 24.0 percent for the first half, is the single largest distortion in reading On's results. The next reporting round will show whether that veil lifts, persists, or thickens, and with it whether reported growth converges back toward underlying growth or continues to understate it. The fiscal 2025 exchange loss of CHF 173.2 million and its effect on net income — down 15.9 percent against operating profit up 78.2 percent — is the prior-year version of the same lesson: for a CHF-reporting company selling globally, the bottom line will keep moving for reasons that have nothing to do with demand, and readers should keep watching the operating line and the constant-currency line alongside it.

Fourth, the governance constant. The founder extended team's approximately 56.1 percent voting control is not a quarterly variable; it is the structure within which every quarterly variable plays out. It warrants watching not because any specific governance event is flagged in the file — none is — but because concentrated voting power shapes how all other decisions, including the share repurchase programme announced in September 2026, are ultimately governed. The distinction the file insists on, between the 56.1 percent voting figure and the 12.8 percent economic stake, is one that future reporting should preserve rather than blur.

Fifth, the next reporting date itself. Third-quarter 2026 results fall after T and are excluded here, and the company had not announced a reporting date as of T. The file's fit analysis identifies the third-quarter round as the first judgement day for the expansion staging — the point at which apparel scale, wholesale direction, and constant-currency growth can first be re-tested together. Until that date is announced and those results are published, the 57 stands as a snapshot at 25 October 2026: a premium brand with a tariff-beating margin, a rising direct channel, a second curve in apparel, a clean balance sheet, a volatile reported bottom line, and a concentrated vote — eight points short of the club, with the distance to the top-three bar still the clearest measure of what remains to be proved.

Score summary

Speed 17 of 25: growth 7, capital speed 4, hiring and productivity 3, share-gain speed 3. Moat 36 of 60: network effects 6, distribution scalability 11, market size 9, gross margin 10. Creative destruction 10 of 15: displaced order 4, irreversible behaviour change 3, cost-structure change 3. Deductions minus 6: debt 0, revenue quality minus 1, governance minus 3, regulatory and social cost minus 2. Total 17 plus 36 plus 10 minus 6 equals 57, grade C. No flag. The score is eight points below the 65-point threshold.

More Consumer companies

Other Consumer names on the Blitz Index, highest score first: Garmin Ltd. (59/C), e.l.f. Beauty, Inc. (58/C), Hims & Hers (49/C).

Next earnings

Nov 10, 2026 · Before open · Confirmed

Coverage

On Holding AG · Q3 2026 due Nov 10, 2026 (BMO, confirmed) · Score 57 · Grade C

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