Today’s Change
Current Price
On Holding (ONON -20.29%), a premium performance running shoes and activewear brand, closed at $30.91, down 20.29%. The stock plunged after second-quarter sales missed estimates and management lowered its full-year growth outlook, as investors are watching wholesale sales and North America growth next.
Trading volume reached 42.2 million shares, coming in about 604% above its three-month average of 6.0 million shares. On Holding IPO’d in 2021 and has fallen 12% since going public.
How the markets moved today
The S&P 500 (^GSPC -0.32%) closed at 7,728, down 0.32%, while the Nasdaq Composite (^IXIC -0.60%) closed at 26,445, down 0.60%. Among specialty athletic footwear and sportswear apparel peers, Deckers Outdoor (DECK -3.69%) fell 3.69% to $93.84, while lululemon athletica (LULU -1.71%) slipped 1.71% to $125.61.
What this means for investors
On surprised investors somewhat with a strategic pivot. The initial reaction led to the stock’s worst trading day ever. On had previously set expectations to achieve a minimum sales growth of 23% for 2026. Management adjusted that to say it now expects sales growth in “the low-20% range.”
The current strategy prioritizes higher-margin, direct-to-consumer (DTC) sales, while deliberately restricting shipments to retailers. Management stated, “On is deliberately managing wholesale sell-in to protect full-price integrity in a promotional marketplace, ensuring a clean runway for On’s upcoming breakthrough innovations leading into 2027.”
On has become a popular, premium athletic footwear brand. While there is always competition and apparel consumer tastes can be difficult to predict, On’s valuation now looks enticing as it focuses on a more profitable business.
Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deckers Outdoor and On Holding. The Motley Fool recommends Lululemon Athletica Inc. The Motley Fool has a disclosure policy.
