On Holding, the Swiss sportswear brand known for premium running shoes priced at $150 and above, said a reduction in U.S. tariff rates could provide an additional tailwind to its growth outlook as it reported strong quarterly results. Management reiterated its high-growth trajectory for 2026 while flagging ongoing tariff uncertainty and continued polarization in consumer spending.
The company is forecasting at least 23% sales growth in 2026 on a constant-currency basis, a deceleration from the roughly 30% growth rate reported for 2025 but still noticeably faster than larger competitors. Despite the upbeat top-line outlook and margin expansion plans, On's shares fell about 11% in premarket trading amid broader market weakness.
Executives expect an annual profit margin of at least 63%, up from 62.8% in 2025. That margin target does not yet include the potential benefit of a lower U.S. tariff rate. The U.S. - On's largest market - began collecting a temporary 10% blanket tariff on imports last week, with plans to increase it to 15%. Those levels would remain below the extra 20% duty introduced last year on goods from key sourcing countries such as Vietnam and Indonesia.
"If we see 15% becoming the new reality, this would be an additional upside to the guidance that we gave," the company's chief executive said.
The company has joined other firms in filing for tariff refunds and said any recovered funds would be reinvested in the business rather than returned to consumers. On's management highlighted disciplined pricing and limited holiday discounting as contributors to the quarter's performance.
For the fourth quarter, On reported sales of 743.8 million Swiss francs, a 22.6% increase year over year. That figure translated to approximately $949.69 million, using the exchange rate disclosed by the company. Analyst estimates averaged 724.3 million francs in the data cited by the company.
Adjusted earnings before interest, taxes, depreciation and amortization rose 31.8% to 131 million francs for the quarter. The company pointed to a focused strategy aimed at affluent shoppers as a driver of resilience, noting that brands with a lower-income customer base have faced greater pressure as those consumers cut discretionary spending amid a polarized economy, particularly in the U.S.
Management described the combination of a robust product pipeline, ongoing innovation and the brand's premium positioning as building global momentum. The company plans to expand its retail footprint with 10 to 15 new store openings this year.
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This quarter's results emphasize pricing power and controlled promotional activity as near-term strengths, while tariff developments and consumer spending patterns remain important variables for On's profit and growth trajectory.