On Holding Reports a Surprise Loss and Weak Outlook on Currency Fluctuations
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Key Takeaways
On Holding AG posted a surprise loss and revenue came in below expectations as the Switzerland-based athletic shoe and sportswear maker was hurt by unfavorable exchange rates.
The company also predicted current-quarter and full-year sales that were below estimates.
On Holding said it was hurt by the soaring Swiss franc, which jumped about 10% in 2023.
On Holding’s shares slid 9% in late Tuesday trading.
On Holding AG’s (
ONON
) shares plunged nearly 15% at one point Tuesday after the athletic shoe and sportswear company reported a surprise loss and gave disappointing guidance as a result of being affected by unfavorable exchange rates.
The Switzerland-based maker of eponymous running shoes used by athletes such as tennis great Roger Federer reported it swung to a fourth-quarter adjusted per-share loss of CHF0.05 (6 cents), while analysts had anticipated a profit. Revenue was up 22% to CHF447.1 million ($509.5 million), also short of forecasts.
Those listening to the company’s
earnings call with analysts
said that management pointed to “considerable” currency impacts for the weaker-than-expected results. The company operates in
Swiss francs
, and they skyrocketed about 10% in value against the U.S. dollar in 2023.
That punished revenue because a large percentage of On Holding’s sales are in the U.S.
In the current quarter, On Holding said it expects sales of CHF495.0 million ($564.1 million), and for the full year, at least CHF2.25 billion ($2.56 billion). Both forecasts were below estimates.
Shares of On Holding were down 9% at $30.53 as at 3:50 p.m. ET Tuesday but remain about 30% higher over the past year.
