On Holding co-CEOs are prioritizing their inventory in 2024

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Was On Holdings (ONON) able to maintain a steady pace in its last quarter or did it run out of gas before the finish line? Shares of the running shoe and athletic apparel brand are falling Tuesday after missing fourth-quarter estimates, reporting a loss of $0.06 per share.

On Co-CEOs Marc Mauer and Martin Hoffmann — who is also the company's CFO — discuss their company's consumer outlook as it expands its merchandise from running and into other sports, while also talking about the regions the brand is seeing the most growth amid inflationary pressures.

"We did a lot of work on inventory last year... We entered into the year with an elevated inventory position in the aftermath of the pandemic," Hoffmann explains to Yahoo Finance. "What we did is we kept our inventory position stable while growing basically our sales by 55%. So we entered '24 with a much stronger inventory position which will allow us to control the supply into the channels."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

[AUDIO LOGO]

SEANA SMITH: On Holdings reporting earnings and guidance this morning that fell short of the Street's expectations. We're seeing that reflected in the stock price here, off just about 14% in early trading action.

Joining us now for more, we want to bring on the co-CEOs of On, Marc Mauer and Martin Hoffmann, both joining us here from the floor of the New York Stock Exchange. Marc and Martin, it's great to see both of you. Marc, let me start with you just in terms of what does this report tell us about the consumer trends that you are seeing right now and some of the trends that we could see here for the next couple of quarters?

MARC MAUER: Yeah, so we're very happy with what we're seeing in terms of where brand demand is. We are very happy with the demand that is going into our wholesale partners, that is going into our own stores, but also in our D2C environment. And it really reconfirms the outlook that we already gave, which is doubling the revenues in the next three years.

And so we're very positive about that. And let's all remind ourselves that we are on a path to be the most premium global sportswear brand. And within that context, having demand above supply is very, very important to us. And this is where we are. This allows us to command superior margins. And so we're very happy with where consumer demand is and where we stand as a brand.

BRAD SMITH: Martin, that's a small but big differentiation, perhaps here, as we're thinking about running versus sportswear in totality. Where are some of the new avenues that On is really prioritizing entry into this year?