On Running, the Swiss shoe brand known for its innovative and distinctive soles, experienced a meteoric rise in 2023. The company reported an impressive 1.8 billion Swiss Francs ($2 billion) in revenue, marking a 55% increase in constant currency. This achievement significantly surpassed expectations and cemented On’s position as a major player in the global sportswear market.
On’s growth was driven by its ability to capture significant market share, a feat highlighted by co-founder David Allemann. The brand’s Cloudmonster running shoe quickly became a flagship product within just two years, prompting the release of updated versions like the 2.0 and Hyper models. These releases further fueled the brand’s momentum, offering more options to consumers and partners alike. Other popular models, such as the Cloudeclipse and Cloudnova, also played crucial roles in driving the brand forward, showcasing On’s commitment to an innovation-driven portfolio.
On’s distinctive sole design not only attracted athletes but also turned the brand into a fashion statement. Allemann noted that the blending of sports with everyday fashion had become a lifestyle choice for many consumers, reflecting broader cultural shifts.
“The last pivotal years made it clear that sport is the new normal that will continue to transcend culture and fashion,” Allemann explained. “Sport is not just an activity. It’s a statement, a lifestyle, and the new luxury for a generation valuing movement and exploration over possession and status.”
In response to this trend, On planned to expand its global footprint by opening an additional 100 brand stores in the coming years. This followed the launch of 50 new stores in 2023, including 10 in China. The fourth quarter alone saw new stores opening in key cities like London, Miami, Paris, Beijing, Chengdu, and Guangzhou.
On’s success wasn’t limited to physical retail expansion. The brand’s direct-to-consumer (DTC) business grew significantly, accounting for 37.5% of total sales, up from 36.4% the previous year. This growth was driven by record-breaking website and in-store traffic, with over 230 million visitors in 2023—a 63% increase year-over-year. Consequently, On achieved its highest gross profit margin since its initial public offering.
The wholesale channel also showed strong performance, with net sales surpassing 1 billion Swiss Francs ($1.13 billion). CFO and co-CEO Martin Hoffmann highlighted On’s efforts to optimize inventory and liquidity, leading to positive cash flow of 163 million Swiss Francs ($184.3 million)—the highest in the company’s history.
Regionally, On saw substantial gains across the board. Sales in Europe, the Middle East, and Africa increased to 488.7 million Swiss Francs ($552.7 million), up 35% in constant currency. In the Americas, sales reached 1.2 billion Swiss Francs ($1.35 billion), a 61% rise, while the Asia-Pacific region experienced a 96% increase, with sales hitting 141.1 million Swiss Francs ($159.59 million).
For the quarter ending December 31, 2023, On reported net sales of 447.1 million Swiss Francs ($505.8 million), marking a 31% increase from the previous quarter in constant currency. The DTC channel accounted for 46.2% of total sales, and the gross profit margin reached 60.4%, exceeding the company’s mid-term target.
Looking ahead to 2024, On anticipated continued growth, projecting a net sales increase of at least 30% in constant currency, with full-year revenue expected to reach 2.25 billion Swiss Francs ($2.54 billion). The brand planned to expand its product lines, particularly in apparel for tennis and training, and refine its retail store concepts and multi-channel strategies.
Hoffmann concluded with a clear vision: “Our mission is very clear. We want to be the most premium global sportswear brand.” Given the brand’s current trajectory and strategic focus, On Running appeared well-positioned to achieve this ambitious goal.
