On Holding Stock Crumbles: A Deep Dive into Q4 2023 Financial Results
Why On Stock Crumbled Today
The market is reacting negatively to record results from the shoe stock. Shares of shoe company On Holding (NYSE: ONON) crumbled on Tuesday after the company reported financial results for the fourth quarter of 2023. The company's numbers were in line with management's guidance but missed Wall Street's expectations. That's why On stock was down 14% as of 11 a.m. ET.
A record year for On
On's management provided guidance for sales, gross profit margin, and margin for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Back in the third quarter, management said investors could expect full-year net sales growth of 46%, a gross margin above 59%, and an adjusted EBITDA margin of 15% at least. The company's financial results met guidance on all three counts.
Is Wall Street missing the big picture?
I can't help but believe that Wall Street is overlooking some important nuance here. In 2023, On grew as expected. But this is a Swiss company and the U.S. dollar is weaker relative to the franc. Therefore, the company's results when converting into dollars fell short. But this is a currency issue, not a business issue.
- On surpassed $2 billion in revenue in 2023 when converted to dollars.
- Management expecting sales to double over the next three years.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.