On is walking with sportswear giants.
On Top
Founded in 2010, On surpassed $3.8B in 2025 net sales while maintaining margins that more closely resemble a legacy fashion house than activewear upstart.
Working to become “the world’s most premium global sportswear brand,” the company has scaled strategically, but its biggest task—evolving from scrappy challenger to mainstream competitor while maintaining its cool—lies ahead.
Progress Report
In Q1, On posted a gross margin of 64.2% in Q1 2026—up from 59.9% last year—landing closer to Hermès (71.1%) and Prada (80.3%) than Nike (~40%) or adidas (~51%).
Footwear remains its core, but apparel jumped 45.1% YoY to comprise 10% of direct channel business for the first time, driven by 18–34-year-olds seeking aspirational lifestyle gear.
Despite an average price increase from $145 to $170, net sales jumped 14.5% YoY, signaling fans’ willingness to pay full price, even as macroeconomic forces tighten wallets.
Already operating ~70 stores worldwide, it’s plotting ~100 by EOY. Growing channels, the company shifted from largely wholesale in 2019 to a near 50/50 DTC split in Q4 2025.
Q2. On’s stock sank >20% to a two-year low upon slower-than-expected North America wholesale numbers, which the brand deemed a collateral effect of its full-price integrity.
Highlighting DTC gains from younger demos, founder and co-CEO David Allemann told investors “we are attracting the next generation” without discounting, part of a disciplined plan to “achieve global scale without eroding premium positioning or margin ambitions.”
Outperforming, Zendaya’s collection drove growth among under-34 consumers, who now comprise one-third of the brand’s base. Still, the tempered full-year outlook has skeptics arguing it has hit a growth wall.
Tech Specs
Starting in running, On built credibility by outfitting elite athletes, gaining hype after Frederik van Lierde won the 2013 IRONMAN World Championship in CloudTec.
Consistent validation, British racer Tim Don set an IRONMAN record wearing Cloudflow in 2017, and Hellen Obiri shattered the NYC Marathon’s women’s record in a LightSpray pair last year. While the vision was always luxury style, design never sacrificed technical performance.
After adding Roger Federer as co-owner in 2019, the company expanded into outdoors, tennis (signing Iga Świątek, João Fonseca, and Ben Shelton), and training — most recently launching hybrid gear for the HYROX crowd.
Team effort. All in on innovation, On has grown its product team from 30 to >550 while opening the first of many LightSpray factories in Switzerland and South Korea. A manufacturing breakthrough, the robotic tech cuts carbon emissions up to 75% and lowers production costs in high-wage countries.
Race roster. On launched the On Athletics Club (OAC) in 2020, reaffirming its commitment to serving pros, followed by an LA-based OAC Sprint team this year. Selling swag as much as spikes, it’s leveraging elite athletes’ auras to stand apart from influencer-driven competitors.
Movement Class
Investing in experiential retail, the company is scaling IRL stores to court what its founders call the “Movement Class” — a generation of young wellness consumers who prioritize personal performance over outdated status symbols.
“We are witnessing a fundamental societal shift, as people globally replace traditional markers of status with a commitment to health, longevity, and performance. On is uniquely positioned to deliver what this discerning consumer demands.”
– David Allemann, Founder & Co-CEO
Fresh faces. Tapping Zendaya, Burna Boy, and FKA twigs as ambassadors, the Swiss brand is building at the intersection of sport, art, fashion, and global culture, resonating with next-gen personas like Wellness Connoisseurs.
“What is most important is that we are not fishing in the same pond as everyone else. Instead, On is really expanding the market of sportswear.”
– Martin Hoffmann, ex-CEO
Selling ”Soft Wins” and avant-garde wellness, On isn’t poaching Nike’s customer so much as inheriting them later, speaking to the striver after they’ve “made it” and offering permission to redefine winning as something quieter.
While Nike’s “Just Do It” turns chips on the shoulder into confidence—pushing to overcome circumstances and disprove doubters—On’s “ignite the human spirit” promotes a more ethereal sense of accomplishment.
Swapping metrics for meaning and optimization for intuition, it’s betting Philosophical Fitness is the future, adapting sports gear for a new era of Movement Health.
Pricing power. Collabing selectively, On counts partnerships with Loewe and Erewhon, maintaining layers of exclusivity through limited capsules as mass demand grows.
With its luxury wedge, it preserves margins by opting out of sales, reinvesting profit back into product innovation and cinematic worldbuilding, like turning Zendaya’s collection campaign into a Spike Jonze-directed art piece.
Question Marks
Graduating from word-of-mouth, On is entering an expensive growth phase where overhead from ads and store ops will eat more revenue. At the same time, it’ll have to navigate the tension between expanding reach and preserving identity.
In a Q3 2025 earnings call, then-CEO Hoffmann noted ~75% of people don’t know On, and broadening brand awareness is a priority. Declining “a shotgun approach,” they’ll be “conscious about the different communities and customer groups [they] are targeting” to steer perception.
A leadership handoff, founders David Allemann and Caspar Coppetti returned as co-CEOs to helm the next chapter. Controlling its narrative, On will continue to invest in premium experiences, shaping its story through owned stores and events like Clubhouse Nights — betting it can grow into increased overhead rather than skimp on the brand-building that creates it.
Punchline: Even as barriers to entry shrink and activewear brands optimize for Instagram aesthetics over actual R&D, On is proving generational companies put fundamentals first. Elevating technical performance, it won athletes and trickled down to design-conscious consumers. Now, it’ll see if luxury margins can survive growth-company math.
