On Expands Asia-Pacific Footwear Capacity Amid China Push

By Rebecca Stone

On’s sales rose 17.2% year on year to CHF 931.4 million ($1.1 billion at current exchange rates) for the period ended Sept. 30, while net income increased 36.9% to CHF 162.8 million.

On’s Asia-Pacific business grew 31.9% on a constant-currency basis in the third quarter. Reported growth reached 31.1%, lifting regional sales to CHF 189.9 million.

Those results anchor On’s expansion. Co-founder and co-CEO Caspar Coppetti called Asia-Pacific a “match made in heaven” for the company’s premium playbook on Tuesday’s third-quarter earnings call.

What does the China claim establish?

On has become the number two premium footwear brand in China, according to an unnamed third-party study cited by Coppetti. He did not identify the researcher or methodology.

The claim carries a separate risk. Last month, Kylian Mbappé, On’s newest ambassador and the face of its new football line, laughed at a meme placing his face on Mao Zedong’s body. He called Mao a dictator. The Real Madrid forward later apologized after significant backlash in China. On did not directly address the episode on the call.

Coppetti instead emphasized strong consumer demand and pricing discipline. He said On could grow faster, but management saw no need to accelerate. It would not lean into the heavily promotional 11/11 period or raise marketing dollars merely to fund more promotions. The strategy favors full-price selling.

How will On pace regional growth?

CFO Frank Sluis described a deliberate controlled pace that expands and elevates the region simultaneously. That approach requires On to appear more selectively and premium with partners. On expects Asia-Pacific growth closer to the mid-to-high 20s over the coming quarters. This remains forward guidance, not secured order volume.

In Japan, key partners ordered significantly more products through the quarter following strong sellout. Reorders ran well ahead of On’s plan. In Korea, every store beat expectations by at least 30%. On operates three stores there, with a fourth planned. The company gave no order values or store-opening date.

Nike is working to revitalize its business in the region, adding competitive pressure to On’s premium push. The call did not quantify order values or isolate the controversy’s effect on regional commitments.

What does the factory expansion change?

On plans a LightSpray factory in Vietnam in the short term. The company already operates LightSpray factories in Switzerland and South Korea. A fourth factory is set to open in Portugal.

“Once fully built, this will more than double our capacity,” Coppetti said.

He said the Vietnam plant will broaden the range of LightSpray products. On did not disclose capital cost, unit capacity, hiring, product allocation, certification timetable or exact opening dates. The company also gave no funding split. The announcement does not let buyers calculate unit costs or lead times.

How did channels and categories perform?

On’s period results favored direct selling, while apparel and accessories grew faster from smaller bases than shoes. Wholesale was larger in absolute terms, though direct-to-consumer posted the faster increase.

• Direct-to-consumer sales rose 25% to CHF 393.3 million.
• Wholesale sales rose 12.2% to CHF 538.2 million.
• Shoe sales rose 15.4% to CHF 843.7 million.
• Apparel sales rose 38.7% to CHF 69.5 million.
• Accessory sales rose 39.2% to CHF 18.1 million.

The next test is whether On can convert its China position and full-price posture into sustained mid-to-high-20s Asia-Pacific growth while absorbing the Mbappé controversy and bringing new LightSpray capacity online.