On Holding (ONON) Q2 2026 Earnings: Down 20% On A Record 65.4% Gross Margin

On Holding AG (ONON) Q2 2026 — Net sales CHF 850.3M, +21.6% constant currency. Gross margin a record 65.4% vs 61.5%, while fully absorbing US tariffs. Adjusted EBITDA CHF 168.1M, 19.8% margin. Adjusted diluted EPS Class A CHF 0.35 vs CHF (0.09). The 6-K was accepted 10:10 UTC, before the open, so the -20.29% close at $30.91 IS the reaction session. On raised full-year gross-margin guidance to a record 65.0%, held its 19.5-20.0% adjusted EBITDA margin guidance, and grew direct-to-consumer 34.3% in constant currency to a record 45.7% of sales - and the stock fell 20.29% on 9.5x normal volume. Only ONE of three guided lines moved: constant-currency sales growth went from at least 23% to the low-20% range, and the entire shortfall is wholesale, halved from 25.1% to 12.7% because On deliberately shipped less into a promotional market. THE CALL: BUY (3/5, A CHANNEL DECISION, NOT A DEMAND BREAK) — base-case value ~$36.0 vs ~$30.91 today. KEY METRICS: - CALL: BUY 3/5, fair value $36.00 vs the $30.91 reaction close - 16.5% above, and BELOW the $39.50 post-print Street average. Bear $22.62, base $37.22, bull $55.40; weighted 30/50/20 = $36.48; discount rate 10.5%, terminal growth 2.75%. Run backwards, $30.91 assumes only 8.9% compounding for ten years. - THE ANGLE: the revenue cut and the record margin are the SAME decision. FY2026 constant-currency growth cut from at least 23% to the low-20% range; gross margin RAISED from 64.5% to at least 65.0%; EBITDA margin HELD at 19.5-20.0%. One line down, one up, one held - the market marked all three down. - THE PRINT: net sales CHF 850.3M (+13.5%, +21.6% cc). DTC CHF 388.4M (+34.3% cc), 45.7% of sales. Wholesale CHF 461.9M (+12.7% cc, from +25.1% in Q1). Gross profit CHF 555.7M, 65.4% margin. Adjusted EBITDA CHF 168.1M, 19.8%. Net income CHF 105.0M. Cash CHF 1,205.6M, no financial debt. - THE 356% THAT WAS NOT REAL: net income swung CHF +145.9M, from CHF (40.9)M to CHF 105.0M. The foreign-exchange line alone swung CHF +143.2M, from CHF (139.9)M to CHF +3.3M - 98% of the move, and non-cash. The operating result rose an ordinary 28.7%, CHF 92.8M to CHF 119.4M. - THE BEAR CASE: the Americas is CHF 451.6M, 53.1% of net sales, and its constant-currency growth has gone 21.3%, 17.1%, 13.0% across three straight quarters. Our base case assumes it stops there. If Q3 shows the Americas below 10% cc the thesis is wrong and $22.62 is the right number. - WALL STREET: consensus into the print was Buy - 20 buy, 5 hold, 1 sell across 26 analysts, average target $46.50. Goldman $46 to $42, Telsey $51 to $43, Stifel $60 to $41, Williams Trading $38 to $32 - those four averaged $48.75 before and $39.50 after: a 19% cut in a day. What to watch: UP: gross-margin guidance RAISED to at least 65.0% and EBITDA margin HELD at 19.5-20.0%; DTC +34.3% cc to a record 45.7% of sales; APAC +54.7% cc; CHF 1,205.6M cash and NO financial debt; 11.2x guided EBITDA. DOWN: the Americas is 53.1% of sales and its cc growth has gone 21.3%, 17.1%, 13.0% over three straight quarters; 59% of base-case EV is terminal value. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.