Yahoo Finance On Holding stock jumps after the Swiss running shoe company reports earnings beat
Yahoo Finance Live anchors discuss first-quarter earnings for On Holding.
Video transcript
- Let's lock in on On Holding. This is a little bit of a different story compared to Walmart-- sales up 68% year over year in the first quarter, seeing shares rocking here in the pre-market, close to 15%. Really good quarter for this company, and really the complete opposite of what we heard compared to Under Armor two weeks ago.
- Yeah, exactly-- a gross profit margin of 52% for this most recent quarter, transitory headwinds that they said from higher airfreight. And that particularly it sounds like is still going to be part of the equation as well, especially given the supply chain crunch that we're seeing across industries, but especially for some of the footwear manufacturers, apparel manufacturers. But specifically in footwear, as they rely on-- as you were bringing up earlier today, Julie-- Vietnam for much of that production as well. And so airfreight going to continue to be one of those headwinds that they have to navigate to right now.
- Yeah, exactly. I mean, I don't know. I honestly don't have that much to say about this-- about the quarter-- because it was pretty straight forward that people want to buy the shoes. They're willing to pay a pretty penny for the shoes. They've managed to get the supply of the shoes from Vietnam to your point, and that's pretty much the size of it.
- Well, both of you mentioned in our meeting a new Soho store, which I think is indicative--
- It's not that new, though. I didn't realize that.
- Relatively speaking-- relatively speaking. But there are a lot of things going on with this company. Go around that store-- you go onto the website, and there's been like a, I'll say, growth explosion at On really over the past six months-- more new styles, they pushed into trail runners, more apparel in this site. Now they're teasing new technology coming out in the spring of 2023. It's a little bit different company than when they went public last year.
- Yeah, they're really going heavy on the different-- on multichannel, right? They talk about REI as well.
- See them in Nordstrom.
- They've gotten more trail runners into REI. So you know, they've definitely expanded that.
- And it's a company that's leaned into its environmentally-sustainable goals and leveraged that messaging to also go out to the consumers. That's increasingly important. Consumers want to hear about the purchases that they're making actually going towards some type of sustainability, especially in the footwear category. We've seen this with Nike's Move to Zero as well that's kind of prompted the space hippie and the entire Move to Zero and this broader ESG goal that we've seen from On Running as well.
Industry leading 44% of recycled content in some of their products, which is the all new Cloud 5, I believe, that you were mentioning a moment ago-- and so that is consistent messaging that we're seeing from the broader apparel and footwear space right now.
- And a real different story compared to Allbirds last week. I believe it was last week that reported earnings-- the stock was really slammed here. Right now looks to be an on market, and of course, Nike. I mean, it's Nike's market. Everybody else is just--
- Yeah, I mean On might be growing fast, but there's still--
- Yeah, I mean Nike's still a behemoth.
- Yeah, Nike dwarfs it to be sure.
