On Holding AG (ONON): BCG Matrix [Dec-2025 Updated]

You're digging into On Holding AG's late 2025 portfolio, and what we see isn't a balanced mix; it's a company still running hard, heavily weighted toward high-potential Stars and exciting Question Marks. The core Premium Running Footwear line and the Direct-to-Consumer channel, which saw 37.5% constant currency growth in Q3, are your Stars, while the established Wholesale business provides the necessary cash flow, hitting CHF 479.6 million in sales as a Cash Cow. But the real story is the explosive, yet unproven, Apparel category, which shot up 100.2%-a clear Question Mark demanding heavy investment to see if it can become the next big thing. Let's map out exactly where On Holding AG is winning and where it needs to make tough calls next.

Background of On Holding AG (ONON)

You're looking at On Holding AG (ONON), the Swiss performance sportswear company that's really shaken up the market over the last few years. Founded back in 2010 and headquartered in Zurich, Switzerland, On Holding AG has built its reputation on engineering innovative athletic gear, primarily footwear, but also apparel and accessories, for running, training, and outdoor pursuits.

The core of their differentiation, as you know, is the proprietary CloudTec cushioning technology, which aims to deliver both high performance and comfort. They operate in over 55 countries, but the Americas still make up the largest piece of the pie, accounting for about 60.7% of revenue as of mid-2025, with EMEA at 25% and Asia-Pacific at 14.3%.

Let's look at the numbers from the latest reports, specifically the third quarter of 2025, which really shows their momentum. For Q3 2025, On Holding AG posted net sales of CHF 794.4 million, which was a solid 24.9% increase year-over-year. What's interesting is the product mix driving this: the apparel segment saw an exceptional jump of 86.9%, accessories soared by 145.3%, while footwear-their bread and butter-still grew by a healthy 21.1%.

Profitability metrics were also strong in that quarter. They hit a record gross profit margin of 65.7%, and the adjusted EBITDA margin reached 22.6%. This success is being fueled by a strong push toward direct-to-consumer (DTC) sales, which continues to outpace wholesale growth. Regionally, the Asia-Pacific segment is on fire, with sales nearly doubling in Q3 2025, showing their global expansion strategy is working.

Given this performance, management has raised its full-year 2025 guidance for the third straight quarter. They now project net sales growth of at least 34% on a constant currency basis, translating to reported net sales of about CHF 2.98 billion. Furthermore, they are targeting a gross profit margin near 62.5% and an adjusted EBITDA margin above 18% for the full year. Honestly, they're gaining ground in competitive areas, with reports suggesting they and Hoka are steadily taking share from giants like Nike and Adidas in the U.S. running shoe market.

On Holding AG (ONON) - BCG Matrix: Stars

You're analyzing the portfolio of On Holding AG as of 2025, and the 'Stars' quadrant is where the real action is-these are the segments demanding investment because they are dominating high-growth areas. These units have the market leadership position in markets that are still expanding rapidly, so they consume cash to maintain that lead but are set up to be the future Cash Cows if the market growth moderates.

The business units or products with the best market share and generating the most cash are considered Stars. Monopolies and first-to-market products are frequently termed Stars too. However, because of their high growth rate, Stars consume large amounts of cash. This generally results in the same amount of money coming in that is going out. Stars can eventually become Cash Cows if they sustain their success until a time when a high-growth market slows down. A key tenet of a Boston Consulting Group (BCG) strategy for growth is to invest in Stars.

The performance of On Holding AG in the third quarter of 2025 definitely places several key areas into this high-growth, high-share category. The overall company net sales growth on a constant currency basis for Q3 2025 was a blistering 34.5%, reaching reported net sales of CHF 794.4 million. This top-line momentum is the backdrop for these Star performers.

Core Premium Running Footwear line is the implied leader here, driving the overall high volume and premium positioning that supports a record Q3 2025 Gross Profit Margin of 65.7%. This margin strength, combined with high growth, suggests strong pricing power in the core niche.

The growth engines fueling this Star status are clearly visible across channels and regions:

• The Direct-to-Consumer (DTC) Channel is a major Star contributor.
• The EMEA Region shows robust, sustained demand.
• New performance shoe franchises are capturing market attention.

The Direct-to-Consumer (DTC) Channel saw net sales increase by 37.5% on a constant currency basis in Q3 2025, hitting CHF 314.7 million. This channel is growing faster than the Wholesale channel, which grew 32.5% constant currency, indicating a strategic focus on capturing higher-margin direct sales.

The EMEA Region (Europe, Middle East, and Africa), On Holding AG's home turf, is performing exceptionally well, showing strong constant currency growth of 33.0% in Q3 2025. This resulted in Q3 2025 net sales of CHF 213.3 million for the region.

New performance shoe franchises like the Cloudsurfer 2 and Cloud 6 are cited as key growth contributors for 2025, reinforcing the footwear category's Star status. The success of these new models, alongside strong apparel momentum (Apparel net sales grew 100.2% constant currency in Q3 2025), shows the brand is successfully expanding its high-growth portfolio beyond just its established running shoe base.

Here is a snapshot of the key financial metrics supporting the Star categorization for these high-growth segments as of Q3 2025:

The growth in the Asia-Pacific (APAC) region, with a constant currency increase of 109.2% to CHF 144.9 million in Q3 2025, also indicates a massive high-growth market that On Holding AG is currently leading in. This explosive growth in APAC suggests it is another significant Star, or at least a very strong Question Mark rapidly moving into the Star quadrant.

On Holding AG (ONON) - BCG Matrix: Cash Cows

You're looking at the bedrock of On Holding AG's financial stability, the units that generate more cash than they consume, which is exactly what a Cash Cow should be doing. These are the established businesses operating in mature segments where market share is already high, meaning the heavy lifting for market penetration is done.

The Wholesale Channel fits this profile well, as it consistently delivers volume, even as the company pushes its higher-margin Direct-to-Consumer (DTC) efforts. For the third quarter of 2025, this channel generated net sales of CHF 479.6 million. That represented a reported increase of 23.3% year-over-year, or 32.5% at constant currency. This channel provides the necessary scale and predictable revenue stream.

Consider the Americas Region. It stands as the largest single market for On Holding AG, posting Q3 2025 net sales of CHF 436.2 million. While this is a massive revenue base, its constant currency growth rate was reported at 21.0% for the quarter. This growth rate, while strong, is lower than the overall company constant currency growth of 34.5% in Q3 2025, suggesting the market is maturing relative to faster-growing areas like Asia Pacific, which saw 109.2% constant currency growth. This lower growth, coupled with high market share, is the classic Cash Cow signal for this region.

The underlying technology platform is key to the high margins these segments produce. The CloudTec technology platform, being foundational and established, is essentially fully amortized, meaning its cost base is minimal relative to the revenue it supports. This efficiency is reflected in the overall profitability On Holding AG achieved in Q3 2025, with a reported gross profit margin of 65.7%. The full-year 2025 guidance for the gross profit margin was raised to around 62.5%.

Established running shoe models, which are high-volume mainstays, are the physical manifestation of this Cash Cow status. They benefit from the brand's established credibility, requiring less aggressive promotional spending compared to brand-new launches. This allows the company to focus its high-level marketing spend on building the next generation of Stars or Question Marks, while these established products simply generate cash flow to support the entire portfolio. Here's a quick comparison of the two main channels in Q3 2025:

The company's overall adjusted EBITDA margin for Q3 2025 hit 22.6%, with an absolute Adjusted EBITDA of CHF 179.9 million. This strong cash generation is what you expect from units that have achieved market leadership, like the core footwear business.

You should view the Cash Cow segment as the engine funding the future. The cash flow generated here supports critical corporate functions:

• Funding research and development for new innovations.
• Servicing corporate debt obligations.
• Paying dividends to shareholders.
• Fueling investment into high-growth Question Marks.

The strategy here is to maintain market share and extract maximum cash flow, which On Holding AG is clearly doing by maintaining premium pricing and focusing on structural efficiencies, like those derived from the established technology base. Finance: draft 13-week cash view by Friday.

On Holding AG (ONON) - BCG Matrix: Dogs

DOGS are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

Dogs are in low growth markets and have low market share. Dogs should be avoided and minimized. Expensive turn-around plans usually do not help.

The current financial data for On Holding AG shows robust growth across core categories, making the identification of true 'Dogs' reliant on non-reported, non-core segments. For instance, in the second quarter of 2025, net sales for Accessories grew by 143.2% on a constant currency basis, and Apparel grew by 75.5%. Footwear, the dominant category, still grew by 36.0% constant currency. This high growth across the board suggests that any product lines categorized as Dogs are those that are intentionally being allowed to decline or have minimal strategic focus.

The strategic focus on premium execution and high-growth areas, such as the Direct-to-Consumer channel reaching 41.1% of sales in Q2 2025, inherently pushes older or non-core items into the Dog quadrant by starving them of investment and marketing support.

The implied Dogs category encompasses products that do not benefit from the current momentum:

• Older, non-core non-performance lifestyle models that lack the current brand heat and are not part of the core running focus.
• Any legacy footwear models that are being phased out, as the company is focused on a rapid, premium product cycle.
• Small, non-strategic accessory lines that do not benefit from the high-growth apparel or footwear momentum.
• Low-volume, non-flagship third-party retail accounts that do not align with the premium brand experience.

To illustrate the contrast, here is a look at the high-growth segments that are clearly not Dogs, based on Q2 2025 constant currency growth rates:

The company's overall FY 2025 net sales guidance was raised to at least CHF 2.91 billion, supported by strong margins like the Q3 2025 gross profit margin of 65.7%. This financial strength in core areas provides the capital to manage or divest the low-return Dog segments without impacting overall profitability targets, such as the raised full-year adjusted EBITDA margin guidance of 17.0% - 17.5%.

The focus on premium positioning means that any product line failing to command premium pricing or high velocity is a candidate for elimination. For example, the premium focus drove the gross profit margin up to 61.5% in Q2 2025. Products that cannot support this margin structure are candidates for minimization.

The decision to divestiture is often the clearest path for these units. For example, the company is focused on driving growth through its nine distinct footwear franchises, each contributing over 5% to the top line in Q2 2025. Any model outside this core group is likely a Dog.

On Holding AG (ONON) - BCG Matrix: Question Marks

You're looking at the areas of On Holding AG's business that are burning cash now but hold the promise of becoming future Stars. These are the high-growth, low-market-share bets that demand heavy investment to capture more of their expanding markets. Honestly, these segments are where the next big revenue drivers must be forged, or they risk fading into Dogs.

The Apparel Category is a prime example of a Question Mark. In the third quarter of 2025, this segment saw explosive growth of 100.2% on a constant currency basis. Still, this high-growth area represented a relatively small slice of the total pie, accounting for about 6.3% of the quarter's net sales, which totaled CHF 794.4 million. To put a number on that growth, Apparel net sales reached CHF 50.1 million in Q3 2025, showing the market is adopting the product, but the share is not yet dominant. The strategy here must be to pour resources in to quickly scale market penetration.

Geographically, the Asia-Pacific (APAC) Region fits this profile perfectly. It is off a smaller base compared to other regions, but it delivered extraordinary growth for the fourth consecutive quarter, achieving 109.2% in constant currency for Q3 2025. APAC reported net sales of CHF 144.9 million for the quarter. This rapid expansion signals massive market opportunity, but the low relative market share means On Holding AG must invest heavily in distribution and brand building there to solidify its position against established players. If this investment falters, the high growth rate could stall, turning this region into a Dog.

The Accessories Category also shows Question Mark characteristics. While the Q3 2025 data shows Accessories net sales growing by 160.8% on a constant currency basis to CHF 13.0 million, the prompt highlights rapid growth up to 99.2% in Q1 2025, confirming it remains a very small revenue base relative to shoes. These high-growth add-ons require cash to push adoption, but they have the potential to become significant, high-margin contributors if they can quickly gain share in their respective sub-markets. Here's the quick math: the investment needed to scale accessories from CHF 13.0 million in Q3 sales to a Star-level revenue stream is substantial.

Finally, New, unproven product categories or collaborations are classic Question Marks because their future success is entirely dependent on current investment decisions. The initial launch of the Zendaya footwear line, such as the 'Cloudzone Moon' sneaker, falls squarely here. This is a multi-year partnership requiring heavy upfront marketing and inventory commitment to see if the cultural relevance translates into sustained, high-volume sales that can challenge the core footwear business. The company needs to decide whether to invest heavily to make this a Star or divest if adoption lags.

You can see the high-growth/low-share dynamic clearly when you map the key Question Mark areas:

The core challenge for On Holding AG's management is resource allocation across these high-potential, high-cost areas. You have to commit capital to win share quickly in APAC and Apparel, or these opportunities will pass. The decision point is whether the potential return justifies the cash drain required to move them up the market share axis.

• Apparel: 100.2% CC growth in Q3 2025.
• APAC: 109.2% CC growth in Q3 2025.
• Accessories: CHF 13.0 million in Q3 sales.
• Zendaya Collaboration: Multi-year partnership with initial footwear drop in AW25.

Finance: draft 13-week cash view by Friday.