On Holding beat Wall Street on the top and bottom lines Tuesday morning and raised its gross-margin guide for the full year to at least 64.5% — up from the prior 63% target — as CNBC's earnings recap captured. Revenue growth was driven by what the company specifically called out as "double-digit growth in Greater China." That's the line that should make every U.S. footwear merchant lean in, because it's the exact opposite of what's been happening at Nike.
Nike's Greater China business has now contracted for five consecutive quarters, most recently down 17% year over year, with the Swoosh losing meaningful share to domestic brands Anta and Li-Ning. Nike's most recent print also flagged a $1 billion tariff hit and offered what analysts described as a "bleak Q2 outlook." On just took that same market — same tariff environment, same nationalist consumer sentiment, same Anta/Li-Ning competition — and grew double digits. The asymmetry is the story.
It's also the second print in three quarters where On has materially outpaced Nike, as WWD noted in its earnings recap. The company posted 32% sales growth in Q2 of its fiscal year and is now compounding off a base that's no longer small. Revenue at On is on track to clear $3.5 billion this year. That's still less than a tenth of Nike's run rate, but the trajectory is what matters: On is taking share in premium running, in lifestyle adoption, and — critically — in geographies where Nike has historically been untouchable.
The Q1 print also lands two weeks after On formally lost its longtime CEO. Martin Hoffmann, who had been with the company for 12 years and served as CEO or co-CEO for more than five, exited the company on May 1 under what On called a "planned hiatus" to pursue philanthropic interests, as Retail Dive's coverage of the transition noted. Co-founders Caspar Coppetti and David Allemann stepped up as co-CEOs and board co-chairs. Hoffmann remains an advisor through March 2027 — and his Class B voting shares will convert at a 10-to-1 ratio at the May 28 AGM, per the company's investor announcement. A leadership reset of that magnitude usually shows up in operational softness for at least a quarter. On just posted the cleanest print of its public-company history through it.
The strategic context for U.S. retail buyers is worth flagging. The premium-running category has become the one consistent bright spot in the broader athletic footwear tape. Hoka (owned by Deckers), New Balance, and On have collectively pulled enough mid-to-high-income customers out of Nike's funnel that wholesale assortments at Foot Locker, Dick's, JD Sports, and the specialty running stores have been quietly rebuilt over the last 18 months. Retail Dive's earnings analysis of On's recent runs has consistently flagged that the brand's wholesale strength is now matching its DTC growth — a sign the category itself is expanding, not just shifting allocation.
The China line in today's print is the part U.S. retailers should sit with longest. There's a working assumption inside a lot of large American retail orgs that the Chinese consumer has structurally turned away from foreign brands. That's the line being repeated to explain Nike's struggle, Apple's iPhone softness in mainland China, and the Starbucks store-count rationalization. On's print pokes a hole in that thesis. The Chinese consumer didn't reject foreign brands. The Chinese consumer rejected one brand whose product cycle, pricing, and DTC strategy got out of sync with what local buyers wanted. Different brand. Different math. Same country.
There's a tariff dimension worth flagging as well. With the Trump-Xi summit confirmed for May 14-15 — the meeting Endcap covered yesterday — every U.S.-listed brand with material China exposure is being repriced on what the China-tariff floor will look like after Bessent's July expiration. On is a Swiss company with manufacturing largely in Vietnam and Indonesia. Its tariff exposure is real but structurally different from Nike's. That difference is now starting to show up in the print.
The bigger read: On has gone from "Roger Federer's sneaker side project" to a brand that is taking share from the largest sporting goods company in the world in Nike's most strategically important growth market. With co-founders back at the helm, a raised gross-margin guide, and a China business that just put up double digits, the next two quarters are going to test how much of that share-taking compounds versus how much was a one-time Nike air pocket. Today's print suggests it's the former.
Nike's earnings call on May 19 will tell us whether the Swoosh has anything to say back.