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On Holding's Bold 2029 Targets Spark Skepticism
24 Sep
Summary
- On Holding set ambitious 2029 sales growth and margin targets.
- Analysts question if On Holding's targets are mathematically achievable.
- Concerns raised about On Holding's inventory levels and marketing spend.
On Holding presented aggressive financial targets through 2029, aiming for high-teens constant-currency sales growth and an adjusted EBITDA margin exceeding 22%. The Swiss running shoe maker also authorized a new $1 billion share buyback program.
Despite the ambitious outlook, skepticism emerged from Wall Street. Analysts pointed to decelerating growth in the Americas segment and flagged that inventory levels were significantly outpacing sales growth. This raises questions about demand and the company's ability to meet its stated sales goals.
Further scrutiny focused on On Holding's website traffic sources, noting a substantial increase in paid traffic compared to organic growth. The company's marketing spend also climbed. Analysts suggested that inventory markdowns, rather than growth targets, might dictate future results.
