Sportswear brand On sees possible boost from lower US tariff rate

By Helen Reid and Neil J Kanatt

March 3 (Reuters) – On Holding sees lower U.S. tariff rates after the Supreme Court struck down the government’s emergency levies as a possible boost for the fast-growing Swiss sportswear brand, CEO Martin Hoffmann said on Tuesday, and reported strong quarterly results.

The company expects its annual gross margin to rise to at least 63%, up from 62.8% in 2025, with the outlook not yet reflecting any benefit from lower tariffs.

The United States, On’s biggest market, began collecting a temporary 10% blanket tariff on imports last week, with plans to lift it to 15%. Even at that level, the rate would be well below the additional 20% duty imposed last year on countries such as Vietnam and Indonesia, where On sources much of its production.

“If we see 15% becoming the new reality, this would be an additional upside to the guidance that we gave,” Hoffmann told Reuters.

Hoffman added On has also filed for tariff refunds and would reinvest any proceeds in the business rather than pass them on to consumers.

Shares fell nearly 9% in premarket trading after On forecast at least 23% annual sales growth on a constant‑currency basis, moderating from 30% in 2025 but still ahead of larger rivals Nike and Adidas.

“For a company that has struggled to combat a deceleration narrative, (the forecast) sets management back a step,” William Blair analysts wrote in a note. Meanwhile, Guggenheim’s Simeon Siegel sees the sales forecast as conservative.

Fourth‑quarter sales rose 22.6% to 743.8 million Swiss francs, beating analysts’ expectations of 724.3 million, helped by limited discounting during the holiday season. Adjusted core earnings rose 31.8% to 131 million francs.

On’s focus on affluent shoppers has helped it weather the spending slowdown among lower-income consumers in an increasingly polarized U.S. economy.

“The strong product pipeline that we have, the innovation that we bring to the market, and that premium position is really building momentum globally, and is resonating with the customer globally,” Hoffmann said, adding the brand plans 10 to 15 store openings this year.

($1 = 0.7832 Swiss francs)

(Reporting by Neil J Kanatt in Bengaluru and Helen Reid in Paris; Editing by Shilpi Majumdar and Krishna Chandra Eluri)