On Wednesday, On Holding AG (NYSE: ONON) received a reaffirmed Overweight rating and a $40.00 price target from KeyBanc. The company reported first-quarter sales that surpassed guidance and exceeded expectations for EBITDA, also confirming its fiscal year 2024 guidance. The positive performance was largely attributed to robust demand, particularly in the direct-to-consumer (DTC) segment, which grew to represent 37.5% of first-quarter sales, up approximately 500 basis points.
On Holding AG is gearing up for significant brand events, including new product technology launches aligned with the upcoming Paris Olympics. The company's strategy is expected to enhance brand recognition and accelerate revenue growth. For the fiscal year, On Holding AG reiterated its guidance for approximately 30% year-over-year constant currency growth. This translates to net sales of around CHF 2.29 billion, which indicates a 28% increase on a reported basis from the previously projected CHF 2.25 billion. Gross margins are expected to remain steady at around 60%, in line with medium-term targets, and adjusted EBITDA margins are forecasted to be between 16% and 16.5%.
KeyBanc's stance reflects confidence in On Holding AG's strategic priorities for 2024. These priorities include an emphasis on brand marketing, innovative product launches, expansion of owned retail, and continued execution across multiple channels. The first-quarter results have been viewed as a confirmation of the company's potential within these areas of focus.
InvestingPro Insights
On Holding AG (NYSE: ONON) continues to show promising signs as reflected in the latest InvestingPro data. With a market capitalization of $11.57 billion and a robust revenue growth of 33.66% over the last twelve months as of Q1 2024, the company's financial health appears strong. The gross profit margin stands at an impressive 59.87%, underscoring the company's efficiency and potential for profitability. Moreover, On Holding AG's share price has experienced significant appreciation, with a 10.07% return over the last week and a 30.72% return over the last six months, indicating a positive trend in investor sentiment.
Two notable InvestingPro Tips for On Holding AG include the company holding more cash than debt on its balance sheet, which provides financial stability and flexibility, and the expectation of net income growth this year, signaling potential for future earnings expansion. For readers interested in deeper analysis, InvestingPro offers additional tips on On Holding AG, which can be explored by visiting https://www.investing.com/pro/ONON. To enhance your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Currently, there are 19 additional InvestingPro Tips available for On Holding AG, offering comprehensive insights for informed investment decisions.
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