ONON Q3 2025: Asia-Pacific Sales Jump 109%, Apparel Surpasses 1M Units, Margin Leverage Signals Premium Runway
ONON’s Q3 delivered a step-change in regional and product diversification, with Asia-Pacific sales up 109% and apparel units crossing 1 million for the first time, while margin expansion outpaced structural targets. The premium strategy’s discipline—full-price selling, selective distribution, and innovation-led brand heat—continues to deepen global relevance and operational leverage. With guidance raised across all metrics and double-digit growth visibility into 2026, ONON is cementing itself as a multidimensional leader in performance sportswear.
Summary
- Asia-Pacific Emerges as Growth Anchor: Triple-digit sales gains and new store openings are transforming APAC into a core engine.
- Apparel Crosses Critical Mass: Over 1 million units sold in Q3, accelerating category mix shift and margin profile.
- Margin Structure Recalibrated Higher: Premium positioning and operational discipline support a step-up in sustainable profitability.
Performance Analysis
ONON’s Q3 results underscore the compounding effect of premium brand strategy, operational discipline, and innovation-fueled demand. Net sales approached 800 million Swiss francs, with constant currency growth of 34.5%, but the real headline is the breadth of contribution—Americas, EMEA (Europe, Middle East, Africa), and especially Asia-Pacific (APAC) all delivered strong double- or triple-digit gains. APAC, now nearly 20% of sales, grew 109% at constant currency, reflecting both new store expansion and robust same-store sales, particularly in China, South Korea, and Japan.
Margin leverage was equally notable: Gross margin reached 65.7%, up 510 basis points year-over-year, with adjusted EBITDA margin at 22.6%. While part of this expansion was driven by one-off cost releases and FX/tariff timing, underlying profitability is now running well ahead of long-term targets. The D2C (Direct-to-Consumer, brand-owned retail and ecommerce) channel grew 37.5% at constant currency, driving higher lifetime value and validating the full-price, omnichannel approach. Apparel sales surged 100% at constant currency, surpassing 1 million units for the first time and now accounting for 8% of the business—a key inflection for category expansion and mix-driven margin upside.
- APAC Momentum: Regional diversification is accelerating, with APAC’s share of revenue approaching a fifth of the business and underpinned by both new doors and organic growth.
- Apparel Scaling: Apparel’s rapid growth is reshaping customer acquisition and retention, with D2C and flagship stores acting as critical showcases.
- Margin Step-Up: Margin expansion is not just cyclical—structural drivers like premium pricing, D2C mix, and operational efficiencies are now embedded in the run-rate.
Inventory remains lean and capital discipline high, with inventory volume outpacing value and cash conversion cycle improving. This positions ONON for a robust Q4 and underpins the confidence behind a full-year guidance raise.
Executive Commentary
"This quarter's performance is the direct result of our premium strategy in action, delivering incredibly strong growth and record profitability. Behind the results is a story of global momentum, how constant innovation, community building, and cultural relevance are coming together to elevate the on-brand as the benchmark for performance and design in premium sportswear."
Caspar Capetti, Executive Co-Chairman and Co-Founder
"Operating at this level with such broad-based strengths sets an incredible high standard, and it requires flawless execution. This is where our focus on operational excellence and technology is delivering profound results. We are transforming the way we work. We have structurally reduced lead times and enhanced how we plan and run the business with intelligent tools powering our integrated planning."
Martin Hoffmann, CEO and CFO
Strategic Positioning
1. Premium Brand Discipline
ONON’s refusal to chase growth via discounting or indiscriminate wholesale expansion is central to its brand equity. The company’s commitment to full-price selling—even in a highly promotional market—has preserved pricing power and consumer perception. U.S. price increases were absorbed without demand erosion, validating affluent customer resilience and the strength of the value proposition.
2. Regional Diversification and APAC Acceleration
Asia-Pacific’s transformation from frontier to growth engine is reshaping the company’s global balance. New flagship stores in Tokyo and Seoul, as well as record-breaking openings in Bangkok, are expanding brand reach and deepening local relevance. Management’s disciplined approach—careful store rollouts and a focus on brand-building over short-term volume—suggests APAC will remain a multi-year driver, not just a one-off boost.
3. Apparel as a Standalone Growth Engine
Apparel is no longer an add-on but a strategic pillar, with its own D2C-heavy model and superior margin profile. The category is attracting new, often younger, customers and driving bigger baskets and higher purchase frequency. Innovations like SenseTech and high-performance tennis and running apparel are resonating across both performance and lifestyle segments.
4. Operational Agility and Technology Leverage
Investment in AI-powered planning, supply chain agility, and distribution cost reduction is structurally improving the business. Lead times are down, inventory is lean, and the company is using operational savings to fund marketing and innovation without sacrificing profit. These efficiencies are expected to persist, providing a buffer against external shocks like tariffs and FX volatility.
5. Innovation Pipeline and Cultural Relevance
ONON’s product launches—CloudSurfer Max, Light Spray technology, and collaborations with cultural icons—are fueling both performance credibility and lifestyle demand. The “athlete-first” innovation cycle, proven on the world’s biggest stages, is driving brand heat and broadening addressable market, especially among Gen Z and teens.
Key Considerations
ONON’s Q3 marks a pivotal moment in the company’s evolution from a niche performance brand to a global, multi-category leader. The balance between disciplined growth, operational excellence, and relentless innovation is unlocking new addressable markets and margin structure.
Key Considerations:
- Margin Sustainability: Underlying gross margin is running well above long-term targets, even after adjusting for one-off cost releases and FX/tariff timing.
- Apparel Penetration: With apparel now at 8% of sales and growing triple digits, the path to double-digit share is increasingly credible.
- Regional Risk/Reward: APAC’s rapid growth provides diversification, but scaling must be balanced with brand control and local execution.
- Channel Mix Shift: D2C expansion is driving higher customer lifetime value and margin, but requires ongoing investment in retail and digital infrastructure.
- Innovation-Driven Demand: The product pipeline and cultural partnerships are keeping the brand relevant, especially with younger cohorts.
Risks
Key risks center on macro volatility in FX and tariffs, which have provided both tailwinds and headwinds this year. While management claims structural margin strength can absorb future tariff impacts, any reversal in consumer sentiment, especially in the U.S. or China, could test full-price discipline. Rapid APAC expansion also brings execution and localization risk, and apparel’s fast growth must be matched by supply chain and brand consistency.
Forward Outlook
For Q4, ONON guided to:
- Continued full-price selling discipline through the holiday season
- Further margin expansion, though with prudence on one-off benefits
For full-year 2025, management raised guidance:
- Constant currency net sales growth of 34% (previously 31%)
- Gross margin around 62.5% (up from 60.5%-61%)
- Adjusted EBITDA margin above 18% (up from 17-17.5%)
Management highlighted:
- Brand momentum and order book visibility support double-digit growth into 2026, with a three-year CAGR target raised to at least 30%.
- Margin structure is expected to remain above prior targets, even as tariffs impact 2026, due to operational and mix improvements.
Takeaways
ONON is executing a rare combination of premium brand discipline, operational leverage, and global category expansion.
- Premium-Driven Margin Expansion: The business model’s focus on full-price selling, selective distribution, and D2C mix is structurally resetting profitability.
- APAC and Apparel as Next Growth Curves: Both are scaling rapidly, providing diversification and new vectors for customer acquisition and retention.
- Innovation and Youth Relevance: Product launches, cultural partnerships, and a growing Gen Z presence are future-proofing demand and brand heat.
Conclusion
ONON’s Q3 demonstrates a multidimensional growth engine—premium pricing, regional breadth, and category expansion—delivering both top-line acceleration and margin reset. The strategic discipline underpinning growth gives the company room to invest and compound brand equity, positioning it for continued outperformance into 2026 and beyond.
Industry Read-Through
ONON’s results reinforce the premiumization and innovation trends shaping global sportswear. Triple-digit APAC growth and apparel scaling highlight the importance of regional diversification and category expansion for brands seeking resilience and new addressable markets. Disciplined channel management and full-price selling—rather than promotional volume chasing—are proving to be sustainable levers for margin and brand equity. Competitors in performance and lifestyle segments will need to match ONON’s operational agility, innovation cadence, and cultural relevance to capture similar upside and defend against share loss, especially among younger, affluent consumers.