On Holding AG (NYSE: ONON), the Swiss performance footwear and sportswear company known for its CloudTec running shoes, has authorised its first share-repurchase programme of up to $1bn while setting a target for net sales to reach at least CHF5.6bn by 2029. The programme can run through the end of December 2029 and arrives as On attempts to nearly double sales from the CHF3.01bn generated in 2025.
The Zurich-based group expects high-teens annual constant-currency net-sales growth during the 2026-to-2029 period, while maintaining a gross profit margin of at least 65%. Adjusted EBITDA margin is targeted above 22% by 2029, producing an expected adjusted EBITDA compound annual growth rate above 20%.
Those targets are ambitious because On is attempting to preserve premium pricing at the same time as it broadens into much larger categories. Running remains foundational, but management sees sneakers and apparel as major growth pillars while adding football and golf to its sports portfolio.
How difficult is On Holding’s CHF5.6bn sales target for 2029?
The target requires On to add roughly CHF2.6bn of annual sales compared with 2025. Management believes high-teens constant-currency growth across three years can deliver that expansion.
Recent growth supports the argument. Second-quarter 2026 net sales increased 13.5% on a reported basis and 21.6% in constant currency to CHF850.3m.
Direct-to-consumer revenue grew even faster, rising 26% reported and 34.3% at constant currencies. DTC accounted for 45.7% of quarterly revenue, giving On greater control over pricing and customer relationships than it would have through wholesale distribution alone.
Geographic diversification is another source of growth. Asia-Pacific represented more than 20% of second-quarter sales and grew 54.7% at constant currencies. Europe, Middle East and Africa grew 20.5%, while the Americas increased 13%.
The Americas figure illustrates the challenge. On has already built significant awareness in the United States, making percentage growth harder as its base expands. Future acceleration may require new categories and customer groups rather than simply opening more doors for existing running shoes.
Why is On protecting a 65% gross margin while competitors chase volume?
On’s strategy depends heavily on remaining a premium brand. A gross margin above 65% is unusually high for a footwear and apparel company and gives On room to invest in marketing, athletes, stores, research and product innovation.
The company reported a 65.4% gross margin in the second quarter, up from 61.5% a year earlier. Adjusted EBITDA margin also increased to 19.8%.
That performance supports management’s argument that growth and profitability do not have to conflict. But keeping margins above 65% becomes harder when a company enters more categories, markets and wholesale channels.
Discounting is particularly dangerous for premium brands. Short-term promotions can clear inventory but train customers to wait for lower prices, weaken full-price retailers and blur the distinction between premium and mainstream products.
On is therefore attempting to manage wholesale inventory deliberately while expanding direct sales. The company expects third-quarter constant-currency sales growth around 17%, partly reflecting controlled wholesale sell-in rather than maximising shipments to retailers.
That discipline can temporarily reduce reported growth while protecting channel health. Investors will need to judge whether slower wholesale growth reflects strategic control or weakening consumer demand.
Why is On moving beyond running into football and golf?
Running gave On technical credibility and a distinctive visual identity, but the addressable market becomes much larger if the company can translate that brand into everyday sneakers, apparel and other sports.
Football provides global reach across Europe, Latin America, Africa and Asia. On has added French football star Kylian Mbappé as it begins building recognition in the category.
Golf offers a different opportunity because consumers already accept premium footwear and apparel pricing, potentially fitting On’s margin framework better than heavily promotional mass-market categories.
The opportunity is attractive but creates brand-extension risk. Consumers who view On as technically authentic in running do not automatically grant it credibility in football boots or golf.
Nike, Adidas and Puma already operate huge athlete, club and retail ecosystems in football. Golf has established premium specialists and strong equipment-linked brands.
On consequently needs to avoid becoming a generic lifestyle label whose expansion weakens its original performance positioning. The strongest outcome would be to use product technology to earn category credibility rather than relying entirely on celebrity sponsorship.
What does the $1bn buyback tell investors about On’s cash-generation plans?
The buyback is noteworthy because it is On’s first programme and represents a substantial commitment relative to the company’s market value. The board has authorised up to $1bn of Class A share repurchases through the end of 2029.
Again, authorisation does not mean the entire amount will be spent immediately. On can pace repurchases depending on cash generation, valuation and investment needs.
The decision nevertheless indicates management expects the business to generate enough cash to fund international growth, store expansion and product investment while returning capital.
That is a different stage in the corporate lifecycle from a young growth company reinvesting essentially every available dollar. A buyback implies On believes its premium model can begin funding shareholder returns without slowing strategic expansion.
Investors should watch whether repurchases mainly offset employee-equity dilution or produce a meaningful reduction in outstanding shares. They should also compare repurchase prices with the company’s valuation as execution against the 2029 targets becomes clearer.
Why did On Holding shares jump after the Investor Day?
On Holding shares gained 7.6% on September 22 and traded above $31 intraday after the company released its 2029 targets and $1bn repurchase plan. By September 25 the shares closed at $29.96, still roughly 10% above their September 18 close.
The initial enthusiasm makes sense. Investors received both aggressive growth targets and a tangible capital-return programme rather than a strategy based only on brand ambition.
The market reaction does not guarantee the targets will be achieved. High-teens annual growth becomes progressively harder as revenue approaches CHF5.6bn, particularly if consumer spending weakens or established competitors intensify promotions.
The most useful indicators will be DTC growth, gross margin, Americas performance, apparel penetration and adoption in football and golf.
On has already proved it can turn a specialised running shoe into a global premium brand. The 2029 plan asks a larger question: can it become a diversified sportswear company without becoming less premium in the process?
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