On Holding holds prices as wholesale growth slows to 4.8%

Direct-to-consumer sales jumped 26% in second quarter

On Holding AG is keeping its prices firm even after the Swiss premium sportswear company recorded its weakest retail sales since going public in 2021, a stretch that has already forced the company to soften its overall sales outlook.

Chief Financial Officer Frank Sluis told the WSJ CFO Journal that the company’s cutting-edge design is “the antidote to promotions,” framing the no-discount policy as the company’s deliberate response to industry pricing pressure. He pointed to a 26% jump in direct-to-consumer sales as evidence that consumers are willing to buy On Holding products without a discount.

The second-quarter results capture the trade-off. Total revenue climbed 13.5% to 850.3 million Swiss francs, roughly $1.04 billion, the WSJ reported. The growth was driven by the 26% direct-to-consumer surge, while wholesale channel growth decelerated to 4.8% as the company intentionally limited shipments to retailers in what the WSJ described as a more promotional environment.

The wholesale slowdown marked a sharp departure from years of double-digit expansion. On Holding’s weakest retail sales since going public in 2021 have already forced the company to soften its overall sales outlook, according to the WSJ.

On Holding points to its manufacturing approach as a reason the pricing stance is sustainable. The company uses robotic arms to manufacture sneakers in minutes, and has worked to make its shoes lighter and more cushioned. Such innovations are the reason the Swiss company believes it can hold its prices firm while competitors flood shoppers with discounts, the WSJ reported.

The brand has cultivated a roster of fashionable consumers, athletes and celebrities, including Swiss tennis champion Roger Federer, who has partnered with the brand as an investor.

The WSJ’s morning newsletter, which featured the On Holding profile, also included a separate piece on the U.S. debt picture from reporters Richard Rubin and Justin Lahart. Their piece asked whether the country could grow its way out of the coming fiscal crunch, laying out two scenarios: one requiring higher taxes and lower spending — choices lawmakers have avoided for decades, according to the WSJ — and another that depends on economic growth outpacing additional debt.

“With 3% growth, we grow our way out of this,” Treasury Secretary Scott Bessent said at Southern Methodist University last week, arguing that the economy was on that path before the Iran war disrupted energy flows. “We’ll get to the other side of this Iran conflict, and the underlying economy is very, very strong, and I think reaccelerating.”

The newsletter’s economic calendar flagged several releases and central-bank decisions due in the week ahead: G20 energy ministers meeting in Houston to discuss energy security and the critical-minerals supply chain; the Census Bureau’s retail and food-service sales report for August and residential housing statistics; the National Association of Home Builders’ Housing Market Index for September; the National Association of Realtors’ Pending Home Sales Index for August; and monetary-policy decisions from the Federal Open Market Committee and the Bank of Japan. The BoJ was widely expected to lift its key short-term interest rate to 1.25% from 1%.

The newsletter also carried a correction from its prior Friday edition: a piece about Macy’s had incorrectly stated that the retailer sold real fur. The newsletter also included a quiz item asking readers to identify the amount Carlyle Group co-founder David Rubenstein spent to acquire the Baltimore Orioles, according to his new book, “Inside the Owner’s Box.”

Among other items in the newsletter: fallout from a viral AI warning issued by Anthropic researcher Jacob Coxon after he left the company, which prompted defenses of the administration’s minimal-regulation approach from President Trump and White House AI adviser David Sacks; calls from Trump for Ukraine to ease up on strikes on Russian refineries; and a separate report of a Russian drone attack on a train near the Polish border.