On Holding (ONON), the company behind the popular On running shoe brand reports Q1 results early Tuesday. ONON stock sprinted nearly 95% higher this year and has set the pace for the footwear industry’s impressive performance.
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The Swiss performance-shoe maker went public at 24 per share in September 2021 and is backed by tennis champion Roger Federer. The company is a rising star in the industry. Sales bolted 55% to more than $1 billion in 2022, boosted by the reinvention of its popular Cloudmonster, Cloudrunner and Cloudgo brand performance trainers.
“On’s rally is being driven by the brand’s strong momentum and product acceptance by consumers,” Cristina Fernandez, managing director and senior research analyst at Telsey Advisory Group, recently told IBD.
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The shift toward casual footwear during the coronavirus pandemic helped sales, but innovation and bringing a new product to the market have really fueled On’s success, according to Fernandez. “Consumers were ready for something different,” she said.
After rolling out new products over the past year, On has a bigger presence at its retail partners and is taking share from other players, Fernandez said.
Rivals Crocs and Skechers both topped quarterly estimates for their respective reports in late April but shares fell on weaker-than-expected outlooks for Q2.
On Earnings
On Holding averaged a massive 269.5% earnings growth over the past four quarters on an average 66% leap in sales.
Analysts polled by FactSet expect adjusted earnings to double year over year to 10 cents per share for the quarter. Sales are seen spiking 79.7% to $426 million.
ONON Stock
On Holding ranks second in the Apparel-Shoes & Related Manufacturing group according to the IBD Stock Checkup. It trails clog-making competitor Crocs (CROX) and leads Deckers Outdoor (DECK), which makes the increasingly popular HOKA brand, and Skechers (SKX).
On Holding has a perfect 99 Composite Rating, which combines various technical indicators into one easy-to-read score. The stock has a 97 RS Rating and its relative strength line is just shy of recent highs. Shares have an 80 EPS rating.
ONON stock bolted 94.9% so far this year. Shares are trading above the profit-taking zone for a cup-with-handle base after breaking out on March 24. Shares rose 1.8% to 33.45 Monday.
On Holding stock has been finding support near its 21-day moving average for several weeks.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison.
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