On Holding is Thursday's IBD Stock Of The Day. The Roger Federer-backed parent company behind Swiss shoemaker On Running has battled back, trading right around a buy point after sinking on fourth-quarter earnings earlier this month. ONON stock advanced Thursday.
On March 12, On Running reported a quarterly loss of 6 cents per share, falling from earnings of 2 cents the year prior. The FactSet consensus expected 500% earnings growth to 12 cents per share. Revenue growth slowed for the fourth consecutive quarter, increasing about 28% to $509 million. However, sales came up short of estimates of $516.8 million.
The results marked On Running's first loss after two quarters of more than 200% growth. The company's Q4 gross profit margin improved to 60.4% from 58.5%.
On Running said it expects to achieve net sales growth rate of 30% to 2.25 billion Swiss francs ($2.57 billion) in 2024, driven by strong demand for the brand and its product pipeline. For the first quarter, On Running sees direct-to-consumer net sales growing 26% to 495 million Swiss francs ($564.8 million), which accounted for "the lapsing of a strong wholesale quarter in the first quarter of 2023."
On March 12, following earnings, shares of ONON sank nearly 9%, falling below its 200-day and 50-day moving averages. However, On Holding stock gained it nearly all back the following trading day and has now advanced around 17% since March 12.
On Holding Stock Performance
The shoe brand backed by tennis champion Roger Federer in mid-November reported its seventh consecutive quarter of record sales, although its torrid pace has slowed. The company is expected to report first-quarter earnings and revenue in May. Analysts project EPS falling 6% to 16 cents per share with sales totaling $549 million, up 17% compared to Q1 2023.
ONON shares gained around 1.8% to 35.38, hitting 35.94 intraday, in below-average-volume during Thursday's stock market action. On Holding stock has formed a cup-with-handle base with an official 35.58 buy point, according to the daily chart on MarketSurge.
ONON stock is up more than 1% in March, on pace for a second consecutive monthly gain. On Holding stock has advanced more than 32% in 2024 after surging in January. The Swiss athletic footwear and apparel maker went public at 24 per share in September 2021.
ONON has an 85 Composite Rating out of a best-possible 99. On Holding also has an 81 Relative Strength Rating and a 28 EPS Rating.
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