🧠 Takeaways:
On just posted $3.6B. The Swiss running brand Nike dismissed is lapping the whole category.
Build the Roger sub-brand into the next Air Jordan. Tennis is the starting line, not the destination.
Flood retail before Nike snaps out of it. ROIC targets or we walk.
Raise prices on the lifestyle line. We are not selling running shoes. We are selling luxury.
+ Community: Why I ditched OpenClaw and rebuilt my entire earnings workflow this week
LBAB Community: Why I ripped out OpenClaw and built everything in Claude this week
After 3 mos. of running OpenClaw as my personal assistant I decided to shutdown my Openclaw and move everything over to Claude.
What started out as incredible turned into painful over a matter of months.
The outputs started getting inconsistent. I would spend more time maintaining and updating it than actually using the outputs.
I’d end up having to rebuild most of the outputs or do the work myself. Which wasn’t worth it when I was racking up Claude API bills for thousands every month.
Claude hasn’t been the perfect answer. There’s not a lot more manual work I have to do to trigger the workflows and
Let’s Examine This Biz
Note: As always, none of what follows is legal, tax, investing, financial, or any other sort of advice. And I was never here.
On Holding (the Swiss running brand that conquered fashion week) is the real deal despite not being that durable of a shoe.
Revenue hit $3.6B growing 30% while Nike shrinks -10%, but the stock is -47% from peak.
Stock price: $33
Market Cap: ~$10.7B
L5 Performance: -15%
P/E Ratio: 44x
Today, we are buying the dip to turn the world's best-margined athletic brand into the LVMH of performance footwear.
Financial Summary
FY 2025 Financial Statements (YoY Comparison)
Rev: $3.6B (+30%) 💪
Gross Profit: $2.3B (+32%) 👍
OPEX: $1.8B (+27%) 😥
Net Income: $246M (-16%) 😬
EPS: $0.74 (-16%) 😟
FCF: $339M (-37%) 😟
TLDR Analysis: Best Margins. Worst FCF in the category
Best gross margin in athletic footwear -- 62.8%. Beats Lulu (59.2%), Deckers (57.9%), Nike (42.7%).
Operating margin went from 6.7% -> 9.1% -> 12.5% over 3 years. The leverage story is real, just slow.
At 44x P/E with FCF falling 37%, the market wants to see the conversion happen.
They’re heavily investing in the future, but torching a lot of their cash to build it.
Let’s TLDR This Biz
Founded:
2010. Olivier Bernhard (Ironman triathlete), David Allemann, Caspar Coppetti. Zurich.
Built the CloudTec sole out of a garden hose prototype. Most distinctive midsole in running.
Aha Moment:
Roger Federer became an investor and co-creator in 2019.
Not a paid endorsement. An equity stake. Changed the trajectory overnight.
Growth:
IPO'd Sept 2021 at $24. DTC expansion + APAC explosion.
39.6% of revenue is now direct. 65 retail stores. 70+ by end of FY2026.
APAC growing +107% constant currency. Nike is ceding Asia. On is taking it.
Model:
Premium footwear. $150-$250 price point. Never on sale.
Running performance + fashion crossover (Loewe 6-season collab, Zendaya campaign).
Manufacturing outsourced. Asset-light. Zero financial debt.
Collapse:
Stock -47% from ATH on Foreign Exchange (FX) headwinds and FCF compression.
The shoe finally has the brand to match it.
Let’s Fix This Biz
Here are the 3 ways we turn On into the LVMH of athletic footwear.
1) Build the Roger Federer version of Air Jordan
This is the most underutilized asset in Footwear/Apparel. The Jordan Brand did $6.6B in revenue in 2023.
Federer is 44, still at peak brand equity post-retirement. And let’s be honest he is the brand.
This currently looks like a collection under the On Brand with the Roger collection.
But this isn’t just a collection of On shoes that like Roger likes. Extend the Roger line beyond tennis: lifestyle sneakers, apparel, limited edition drops.
Go deeper where it’s already working. Build the playbook then extend it.
Sign 2-3 cultural icons who authentically wear On. Zendaya is already a big part of their marketing strategy.
Takeaway:
2) Flood Retail Before Nike Regains their Footing
Nike is in chaos. Revenue -10%. 14,000 layoffs. CEO turnover. There is a 2-year turnaround window that Nike will need to take to get their act together.
On has already been capitalizing on this but now it’s time to hit the gas. They’re heavily investing in their own Retail stores, but it’s wholesale that is building their brand and leading to exponential growth.
The key here is crowding Nike out before they can regain the shelf space they abandoned.
This won’t be easy or cheap, but necessary if On wants to turn this historic run into an enduring brand.
At their scale growing DTC (Online + In Store) is important for the brand, but not the leverage point for how they’re going to grow another 30% YoY this year.
Takeaway: When someone else will spend their OPEX on you. Let them.
3) More Luxury Collabs
Swiss. Federer. Running shoe as a lifestyle play allows On to command premium price points.
That’s how they’re charging $130 for a sweatshirt and $120 for women’s leggings.
Honestly the biggest area where they’re missing pricing power is on their shoes (Which are $150-180).
They need more luxury collabs to pull their pricing up for the products overall.
Launching a shoe that looks like most of their other shoes with Fashion Luxury house Loewe allows the to charge $750 for a pair of shoes that are VERY similar to their $150 pair.
This is the right playbook to raise prices across the board. In a different but similar model to the On Federer play.
Associate all of the core products with desired other luxury players. Instead of competing with Nike as the mass market brand. Become the Luxury Athletic brand.
The more high end fashion brands, celebrities and “it” collabs they can do justify charging more for all the products in their catalog.
Takeaway: People pay for desire of quality every day. Especially rich consumers.
Final Thought
On is positioned to dominate this category over the next decade because no one is playing in it. The mistake everyone is making comparing On to Nike, is On operates in another tax bracket.
On needs to run the same playbook that Nike did, but instead of inspiring any kid to start playing sports. On needs to inspire rich people to wear their shoes + clothing to feel more important.
They’re at this brilliant intersection of Nike + Crocs where they can take the collab + sponsorship playbook and build it only for the Top 1%.
If they’re smart you’ll see price points continue to increase while stock becomes more and more limited as On builds the LVMH model for athletic apparel.
That is if LVMH doesn’t acquire them first.
