ONONBy Calypso Research6 min read

On Running (ONON) Q3 2025 Earnings Analysis

Running Ahead with $794M in Revenue Gains

Key Takeaways

On Running (ONON) reported Q3 2025 earnings with revenue of $794M, representing a +24.9% year-over-year change. The stock moved +18.0% on earnings day.

The bull case: Continued innovation, premium pricing power, and regional diversification will drive strong long-term growth and profitability.

The bear case: Tariffs, a tough U.S. retail environment, and reliance on premium pricing may limit near-term margin expansion and growth visibility.

Financial Highlights

  • Revenue: $794M (+24.9% YoY)
  • Gross Profit: $522M (65.7% margin, +5.1% YoY)
  • Operating Income: $125M (15.7% margin, +4.3% YoY)
  • Net Income: $119M
  • TTM Revenue: $2.9B

Stock Performance

  • Earnings Day Move: +18.0%
  • Year-to-Date: +1.0%
  • 1-Year Return: -2.7%
  • vs. S&P 500 (since earnings): -12.1%
  • vs. Nasdaq (since earnings): -13.2%

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What Management Said

Here are the key debates and direct quotes from On Running's Q3 2025 earnings call:

Sustained Growth in Apparel and Its Role in Driving Margins

Sentiment: Positive

"We sold over 1 million items now in Q3 for the first time. And apparel excesses together account for about 8% of our total business... we're well on track of hopefully getting quickly into the double digits there." — Caspar Coppetti
"We look at apparel as a company in the company and it follows a slightly different distribution model approach... it will play a much stronger role in driving superior margin profile into the brand." — Unknown Executive

Balancing U.S. Growth with Premium Strategy and Regional Diversification

Sentiment: Positive

"The price increases that we've done now in July of this year have been very well received, and we see continued demand growth, implying that our affluent consumers are not price sensitive." — Caspar Coppetti
"We still have about 60% of the key account doors from Foot, Dick's and Shady where one is not yet present... but very much with a focus on building the brand in a very meaningful and controlled way." — Unknown Executive

Asia-Pacific Momentum and Long-Term Growth Potential

Sentiment: Positive

"APAC is now approaching 20% of our total sales... with continued triple-digit growth in Greater China, South Korea, and Southeast Asia, amplifying the success we see in Japan." — Martin Hoffmann
"In China... we see massive same-store growth. And at the same time, we are extremely disciplined in opening additional stores... this approach just hits an environment where the demand for premium sportswear brand is incredibly high." — Caspar Coppetti

Gross Margin Expansion Amid Cost Management and Pricing Power

Sentiment: Positive

"The premium business that we are building is the driver behind the gross profit margin... the pricing power, the full price discipline, a more DTC-focused channel mix, operational improvements and then also economies of scale." — Unknown Executive
"We have now really achieved a new level on gross profit margin that we also consider sustainable... we are fully in control of our future, even as we digest the tariffs." — Martin Hoffmann

Engaging Younger Consumers and Building Lifetime Value

Sentiment: Positive

"Over the last, I would say, about 6, 7 years, we have gained a lot of traction with the young consumers... you'll see the cool kids wearing On, especially in a more affluent neighborhood." — Caspar Coppetti
"You may have also seen that we have launched a kids line. That is going phenomenally well... for small children, it's the moms and dads buying the product, but for young teens, we are seeing very strong results." — Caspar Coppetti

Bull Case

Continued innovation, premium pricing power, and regional diversification will drive strong long-term growth and profitability.

Bear Case

Tariffs, a tough U.S. retail environment, and reliance on premium pricing may limit near-term margin expansion and growth visibility.

Looking Ahead

With revenue growing +24.9% year-over-year, the key question is whether On Running can sustain this growth trajectory, particularly around sustained Growth in Apparel and Its Role in Driving Margins. With operating margins at 15.7%, margin trends will remain a focal point. The market's positive reaction on earnings day suggests confidence in management's direction, and the next earnings report will be a key catalyst for the stock.

Frequently Asked Questions

What was On Running's revenue in Q3 2025?

On Running reported Q3 2025 revenue of $794M, representing a +24.9% year-over-year change.

Did On Running beat earnings expectations in Q3 2025?

The stock rose +18.0% on earnings day, suggesting the results met or exceeded market expectations. The current bull case centers on: Continued innovation, premium pricing power, and regional diversification will drive strong long-term growth and profitability.

What is the bull case for ONON stock?

The bull case for ONON centers on: Continued innovation, premium pricing power, and regional diversification will drive strong long-term growth and profitability.

What is the bear case for ONON stock?

The bear case for ONON centers on: Tariffs, a tough U.S. retail environment, and reliance on premium pricing may limit near-term margin expansion and growth visibility.

How has ONON stock performed since its Q3 2025 earnings?

ONON moved +18.0% on the day of its Q3 2025 earnings report, underperforming the S&P 500 by +12.1% since earnings. Year-to-date, the stock has returned +1.0%.

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