November 12: On Holding reported record third-quarter sales and its highest gross margin as the Swiss sportswear brand builds a football business around Kylian Mbappé.
Sales rose 17.2% to $1.1 billion in the three months to September 30. Net income rose 36.9% to $197.98 million, and gross profit rose 29.5% to $822 million. Gross margin reached 72.6%, up from 65.7% the previous year.
Football is now central to On’s growth plans. In September, the company signed Mbappé as the face of its new football category, with Thierry Henry as director. For a brand best known for premium running shoes and lifestyle shoes, landing one of the most marketable players in the world was a statement of intent. It puts On in direct competition with Nike, Adidas and Puma to capture the attention of the next generation of players and fans.
The timing was not perfect. Mbappé’s comment last month about a Mao Zedong meme prompted two Chinese sponsors to drop him and briefly pulled LaLiga from Chinese state television. China is an important growth market for premium sportswear, and how On handles this partnership will be closely watched.
There are other challenges. On Monday confirmed that tennis player Ben Shelton will leave the company early next year, New Balance reports. Shelton has been one of On’s most visible athletes in the United States.
But the company remains confident. It cited strong momentum across what it calls its three growth engines, performance running, lifestyle and apparel, and plans to launch the Golf next year.
Football is the biggest bet. Boots are a busy and expensive category, dominated by long-established brands with deep relationships with clubs and players. Building credibility will take time, product and more than one star. But with Mbappé and Henry, On has two of the most recognized figures in the history of French football leading the way.