ONON's Rapid DTC Expansion Tests Whether It Can Outgrow Wholesale

On Holding AG ONON aims to shift its business model toward higher-margin channels. The third-quarter 2025 results highlight an aggressive push to shift its sales mix toward the direct-to-consumer (DTC) channel versus its established wholesale network. While the wholesale channel remains the largest contributor to net sales at 60.4% in the quarter, its growth rate is lagging behind the accelerating DTC business.

Net sales through the DTC channel rose 27.6% on a reported basis and 37.5% on a constant-currency basis. This compares to the wholesale sales channel, which grew 23.3% on a reported basis and 32.5% in constant currency. This rapid DTC growth caused a slight but meaningful shift in the sales mix, with the DTC channel increasing to 39.6% of total net sales, up from 38.8% in the same period last year. Meanwhile, the wholesale channel’s share of net sales fell by 80 basis points year over year.

Management has pointed to the strengthening relationship between e-commerce and owned retail. These channels are becoming more interconnected as omnichannel customers deliver higher loyalty and greater lifetime value. The company’s retail network is expanding across key global cities such as Zurich, Tokyo and Palo Alto, which are major traffic drivers. ONON leverages its premium store design and digital experience to reinforce brand positioning. 

ONON is gradually relying more on its higher-margin direct channel. Although wholesale remains larger and is growing rapidly, the upcoming quarters will show whether ONON’s quick DTC expansion can achieve the significant change the company aims for.

Competitive Lens: Deckers and Wolverine on Channel Balance

Deckers Outdoor Corporation DECK and Wolverine World Wide, Inc. WWW are actively balancing their channel strategies. Deckers has a long-term objective to achieve an equal 50% split between its DTC and wholesale channels. However, Deckers’ recent performance unveiled a varied picture. UGG's growth in the second quarter of fiscal 2026 was largely driven by a 17.2% increase in wholesale, which partially offset a 10.4% decline in its DTC business. On the other hand, HOKA delivered a 12.8% increase in the wholesale channel and an 8% rise in the DTC operation.

Meanwhile, Wolverine is also prioritizing direct-to-consumer across its portfolio. For the Sweaty Betty brand, Wolverine is resetting its U.S. operations to focus on a premium online DTC model. The Saucony brand, another key asset for Wolverine, reported strong mid-teens growth in its e-commerce channel during the third quarter of 2025. Both Deckers and Wolverine are adjusting distribution to optimize their brand experience and capture consumer demand in a shifting marketplace.

What the Latest Metrics Say About ON Holding

ON Holding shares have rallied 22.6% in the past month compared with the industry’s rise of 11.6%.
 

From a valuation standpoint, ON Holding trades at a forward price-to-earnings ratio of 26.95, higher than the industry’s 17.20. ONON carries a Value Score of F.
 

The Zacks Consensus Estimate for ON Holding’s current financial-year sales implies year-over-year growth of 41.6%, while the same for earnings per share suggests a decline of 12.7%.
 

ON Holding currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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