On Holding is Tuesday's IBD Stock Of The Day, as the Swiss shoemaker continues to hold up. ONON stock traded just above a buy point despite rival Deckers triggering a sector sell-off late last week.
The 11 stocks in the IBD-tracked Apparel-Shoes industry group have collectively fallen more than 25% in 2025. This includes nearly a 7% collective decline on Friday after Deckers beat views, but guided lower amid fears that product price hikes will spur "demand erosion" due to President Donald Trump's tariff policies.
However, Trump on Sunday said his tariff policy was aimed at promoting U.S. manufacturing of tanks and technology products, not sneakers and T-shirts. Speaking to reporters before boarding Air Force One in New Jersey, Trump said he agreed with Treasury Secretary Scott Bessent that the U.S. does not necessarily need a "booming textile industry."
ONON stock moved higher Tuesday. On Holding is a member of the IBD 50, and the shoe giant recently reported better-than-expected earnings and revenue.
In the May 13 earnings release, On said it continues to experience "strong demand across channels, regions and product categories." The shoemaker plans to build on its global brand momentum for the rest of the year.
The company also lifted its full-year net sales outlook to 28% growth to 2.86 billion Swiss francs ($3.4 billion) based on brand strength and order book visibility for the rest of 2025. On during its Q4 results expected 27% sales growth for the year.
However, the tariffs and trade shifts have cause higher levels of planning uncertainty. On Holding expects its gross profit margin to range from 60% to 60.5% vs. its Q4 outlook for 60.5%.
On Holding's History
Founded in 2010, the Swiss company started by focusing on an innovative shoe line and strategic marketing. It decided to expand globally at a slow rate, entering Germany in 2011, then the U.S. and Japan in 2013. The company moved into China and Brazil in 2018.
On Holding is the parent company behind the On running shoe brand and is challenging athletic footwear and apparel stalwarts like Nike, Adidas, and Hoka-parent Deckers, among others.
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On Holding has stressed marketing and high-profile partnerships since going public. Along with actor Zendaya and tennis legend Roger Federer, it has a marketing deal with British music artist FKA Twigs. On Holding also is tied to top-seeded Polish tennis star Iga Swiatek.
When it comes to manufacturing, On Holding relies primarily on Vietnam. The company also has manufacturing operations in Turkey, China, Slovenia and Portugal, according to regulatory filings.
ONON Stock Comes Back
ONON stock advanced 3.8% to 60.66 during Tuesday's stock market action. This comes after ONON stock fell as much as 5% at Friday's open but slashed losses in a bullish shakeout, closing down 0.7%. On Holding is forming a handle with a 60.42 buy point, according to MarketSurge chart analysis.
The move during Tuesday's stock market also broke a downtrend in the handle.
The stock is up 10% this year but is down 6% from its all-time high of 64.05 from Jan. 30. Meanwhile, the shares bottomed at 34.59 on April 4 but have moved 74% higher since then, regaining the 200-day and 50-day moving averages.
The current handle buy point of 60.42 is 6% below that record high of 64.05.
The Deckers Warning
Deckers tumbled about 20% on Friday following its Q4 report. The maker of Hoka sneakers and Ugg boots said it expects earnings per share of 62 to 67 cents in the June-ended fiscal first quarter. The company also forecast quarterly sales of $890 million to $910 million, roughly in line with the consensus estimate of $901.5 million.
Chief Financial Officer Steve Fasching said in a call with analysts that based on current tariffs, the company expects up to $150 million in additional costs of goods sold for the fiscal year, and a yet-undetermined impact on demand.
Average True Range Within Guidelines
ONON stock has a 21-day average true range of 3.89%. The ATR metric is available on IBD's MarketSurge charting tool that gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
The S&P 500 and Nasdaq are now in a power trend. Investors can buy stocks with ATRs up to 8%, though they should be wary of being too concentrated in high-octane names.
On shares have a 92 Composite Rating out of a best-possible 99. The stock also has a 92 Relative Strength Rating and an 87 EPS Rating.
Investors can also keep tabs on the IBD Leaderboard watchlist, the IBD 50 list of top growth stocks and IBD SwingTrader along with the IBD Sector Leaders list.
Please follow Kit Norton on X @KitNorton for more coverage.
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