ONON - Earnings call transcript Q1 2022

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Florian Maag

Good afternoon. Good morning. And thank you for joining ON's 2022 Q1 earnings Conference Call and Webcast. With me today on the call are Executive Co-Chairman and Co-Founder, Caspar Coppetti; CFO and Co-CEO, Martin Hoffmann; and Co-CEO, Marc Maurer. [Technical Difficulty] financial performance within the meaning of the federal securities laws. our and reflect only. statements forward-looking current beliefs expectations These risks subject that differ And are certain materially. and to such statements results to uncertainties actual could cause Please materially of statements the Securities that could any with March refer forward-looking results made for expressed risks XX-F to or actual Commission in differ XX discussion Exchange those on the detailed a cause to our from today. and filed implied EBITDA measures and this that will contain such call as financial adjusted EBITDA Please further note adjusted certain also margin. non-IFRS

a While non-IFRS useful the information measures the information presented measures for be by accordance as Caspar, financial non-IFRS for intended Please information accordance this Martin, turn financial or prepared considered I in not in believes to the of today's reconciliation a most with IFRS. measures company call prepared refer these to the will substitute With that, the followed for in with will isolation, investors, provide the release financial is for, comparable first to presentation IFRS. of over to remarks.

Caspar Coppetti

you welcome thank as CHF into ON XX% last XXX an year, to sales, growth able QX start from net side we a our with further happy that joining of report versus were well. and my momentum had excellent today. And on build that the the warm to year, call A We're for from million of XXXX.

even We high have exceeded our expectations. own

us chain supply done to helping by record teams still the was have our navigating along QX anticipated, As job another yet the a but have that our supply quarter. been constrained shortages reach affecting phenomenal the challenges, industry,

running mean and the a from accelerated In with ON pace, share pace key goal. supply some seeing ON brand new consumers, retail model cushioned led significant Roger our were has aims date. of long with introduced resonating making have ON behind good our partners. share winning Zero of significant progress share of demand The ON already the strong towards quarter. on XXXX, launch styles during apparel and market support our most to of Let's this number that the consumer online this with anticipated the runners on the the ON's very gains second audience at wide a able US$XXX business. of the customers. that brand one ambition in to the mid-level to underlines offers spring Jacket Sales is are history, we in an and consumers number market Centre with March, ON's feet for a which both look are platform the Cloudrunner, gains only In Court. which and largest launched traction new runners. key markets. to key be buy at better-than-anticipated are week products the our market at of In takeaways accelerated combination were and is first our launch April, very ecommerce a Cloudmonster, we reaches expand to cushioning

to the suggests, to close knowledge, jacket As is, lightest the name and it market this the weighs nothing on running today. our

all year, other share Cloudgo this market the later these to key as continue we With expect winning such and coming in products, markets.

benefits. than of is all-day also like strong to flagship environment One be category. ON's of this, To in because customers, ON revenues quarter led call aspect all continents thanks Cloud that wholesale across I'd products the apart to strong in and the both made and continent. many we overall, sustainable which repeat sees applied content extremely continued have launch need BXC. growth Cloud markets launch can illustrate recycled This major ON product multichannel in best, more This is more ON's the to businesses X, in growth at only that some is strong saw but the each X with ecommerce not confirms history, out and scale. belief an XX% that also biggest to high sets This our performance industry examples. the

specialists focus Lightning past we sport have products at the full seen the make from of on the Our and channels technology. have From to own best on not or coming in unleash and purchased from US Istanbul, race partners. introduce grew let she line marathon potential. encouraging markets, world's work to first has of world The about some possible a from of race. In she ON's around that down far consists being drive and she mission March, while piece. some XXk was buy of month, business marathon beginning, half toed XXX%. the very only, been ON retail XXth in UK spoken who XX% those before. ON had trusted fastest XX our On up Lightning program, material just before. are will coming something delivering many on is and back and In about the closely athletes. XX%, to that doubling versus majority extremely feet finish both grew the innovation end only the spirit, the member for despite results racing ever either And us are that the scientists, we purchased runners their XX% the shoe consumers XXXX. that conditions coaches talented and to respectively, their as one have with the In and QX In performance our first far saturation, optimal. to might program all China fastest Lightning and have performance are the Obiri line, champion program. you most more, were the learning engineers, nor time with for won Hellen how prototype half XXXX Japan ON that these received in Germany XXX% record, Club her her When already On we crossed had Athletics on publicly day focused

helped weeks two show same things marathon win the highest summer. new And also more goes course put the ON perspective, XX To there's later, to to come. a prototypes record Tadesse This the and Abraham Just are this with Zurich at into innovate will Swiss the record. that Abraham turn labs continuing level. to

Phase. real reacts will forces, world computers computerized existing how predicting simulation, to new method Formula are pioneered completely for in of that spring using a ON technology Element by cushioning ON's a is We excited racing Cloudtec technology and evolution Analysis called was XXXX for which by announce generated Finite in advanced This One example. to a NASA, product introduce

as showing We is part partners Spring this and ON's the the feedback last of over retail have encouraging. been weeks XXXX very sell-in technology to

in We This ON the to our ON prices. this are across this positioning. collection, are some also a to increases And reaffirming directors. adjust that but have This tool. that for strong States has had defend reaffirm the ON the regarded partners builds position strong only not positioning in premium of slowed price retail US effects our reflect product spring premium ON's positioning of other XXXX all prices to XXXX period. strengthening costs not in announced rounds our higher during retention within also in premium to is we ON's brands pricing positioning premium as has made always to ON's globally inflation ON down opportunity of we face geographies growth own puts of as ranges board XXXX important our on through the the rising teams. In driver salary selective in an showcasing using we also prices. inflation, the will our brand and step absorb a increasing as QX, are which

As company, of and constantly we our strengthen a aim public team level professionalism. to

and that of independent the and with our We with will meeting. Durkin, directors selected, upcoming are elevated If compensation of have will at with proud highly audit Banse. as Amy chair further Dennis Blizzard therefore experienced committee as stands take election Microsoft, formerly the ON audit be for Alex general Dennis well committee. will Perez, board annual If him for nomination the And committee. the elected, fully with and Activision

into and over our We diversify time. board looking opportunities strengthen are to further also currently

a the did starting of So, in start the for Like and to ON. out race, year strong incredible that mile lap QX. it get good was four an teams closing, block more momentum. QX really in to important our with always is And and

sales of new even products, on capabilities achieved new work, proud the know but really team can run added we records. and have We faster. I'm members incredible we and brought team's

increased to outlook So, parts and pass of the we focused cover driving our year. the our highlights all on and innovation remain our business. now I'll excellence financial over pursuing Martin to fully baton for in

Martin Hoffmann

Caspar. you, Thank

and the grateful partners the experienced proud. chain our CHF or globally. the right the the As stand growth XX.X% the the direct-to-consumer more you and ability financial All so airfreight for But quarter success have closures we fulfill strong order They whole with the net the by and master manage the and numbers, to makes than from mentioned, well supply much team, these operations for And and factory retail see product happiness our an first for to stand book. and ability net of extremely Even above to delivery the demand supply right our still year. sales brand impact efficiently continued they understanding shortage we customers. from to great challenging just million our last They plan. ON to into sales that for us warehouse strong numbers represent exceptional effort sales of stand for from demand. to our our limited XXX.X were had together flexibility

and to our for the shipped strongest demand time, we more to a more than products than of quarter time, X strong of generated of some sales. we has of the of DTC, in highest at XXXX pairs products, growth our were and customers first single shoes At QX XX%. month. a supply history Both gap channels, grew the provide hotels net rate feedback the anticipated. In fans. monthly during And the the able widened as in ever our strong ON. result new same from our For our quarter been even of the million between the we same March,

our slightly of QX, by earnings been the up of QX wholesale launch and into shifted and spring of effect versus QX the year. we QX, lower permanently drives the catch same what summer our QX timeframe previous in discussed XXXX. Combining the part the in grew which from wholesale a QX our channel As growth versus collection footwear have wholesale growth had XX.X% call,

to high in In outgrow wholesale. in QX and downs remained lock seen QX in especially North XX.X%, share continued DTC Switzerland. China, at America XXXX, and continued Austria we had Our DTC despite Germany,

retail about We own have our are Tokyo high we meter street store flagship first located the [indiscernible] concept. store. advanced additionally expanded reflect extremely our square proud footprint, store and of our store on most is XXX and The

We have days a in reached X. level high a of seen new the a New in store. first our the the day despite the very store the grand Saturday since weekend York usual Sales opening in store good on logistical on open challenges April of opening very interest City level on

assortment world significantly addition, apparel in ON in well which with like overall the opportunity China the around apparel have merchandising. for the product corporate share much rest of Tokyo bodes In have and share, reached April seen above we the apparel in is what in an our XX%, we and of stores, our

to Looking geography, group sales a CHF million. to exceptionally returned and net quarter saw softer also CHF XXX.X all by net increasing sales another XX.X growth strong North QX, split we growth After at by to across outgrow regions. our Europe net strong XX.X% million. grew we to continued XX.X% and have with the America seen sales

our net a and there than we'll lockdowns latest headwind QX, full-year Pacific QX repeated grew we China later to growth part rate Both COVID as which XXX.X%. more in with very million, grew more of CHF outlook. Asia stock strongly. expect China The caused discuss sales of and year-over-year, Japan XX.X in in doubling losses

rest the runway countries additional the APAC. and of us Finally, of in outside of lot America confidence XXX.X% world growth in a gives Europe, in North

our expand including are announce America and we in most Argentina, to proud countries, We that Peru, with Latin Bolivia. Uruguay, will to starting fall/winter XXXX, Chile, Colombia, presence

our products continue Brazil, be the other distributors. new to in region will we in by sell served directly While markets all

including As seen the Caspar has key Cloud, Cloudrunner, and of mentioned, products, Cloudmonster, firework already a QX new Cloudvista. new

sales as of QX franchises, and to rate key to performance expect XXXX, Compared grow apparel more we in messages the continues on base. million. our XX.X% apparel with success drop. addition, in focused Overall, to from later we super all-day like initial sales running saw Cloudstratos, large continue XXX.X also first million see in XX.X shoes launches new partnership fewer continued grew coming on than strongly most The caps like CHF the With growth, collection compared sold of doubled our in with new XX.X and the footwear with strong sales product planning than loyal sales the strong drop to regions. more In that Cloudflyer Loewe XXXX Cloudflow, brand million but million. grew growth period. across customer of also accessories CHF We're second better or was we XXX.X Gross attach Cloudnova. blockbusters a more with the the in our net CHF rate profit of previous-year our net limited with new most year, the the following more year-over-year, Net product in for our to socks XX,XXX we had CHF products. growth all than QX, QX, to to XXX,XXX a we quarter in accounts we'd to in XXX.X%. XX% Based the

profit air we expected, continued margin the close and XX.X% the the to freight to and our we reached in of have year, availability additional closures long-term a margin demand as meet profit XXXX. XX.X% decreased strong factory strategic other pressures airfreight ensure inflationary a last from despite would gross guidance XX%. gross product use key result As of QX that to decision year-over-year our Vietnam of in to spite exposure, the Without in managed, to

despite delivering We in profitability freight still continued parts costs. all air to the invest while of significant business

doing highlight Travel period. SG&A post-COVID official business footwear compensation, same QX Relays, strong customers on system, to we catch new globally XX.X% as marketing. Penn XX.X% China A runs first in up on two longest to IT and building compared of share-based previous-year road now ON's connect platform. have the In multi-channel the was percentage With had we partners. the disrupt partner our team to capabilities further their and building back XXXX our the day XXX the the presence into as using and future, backbone. personal ON intelligent this relationships by will in meeting. in business and taken live is on expenses XXXX the and largest innovate build legendary more world's QX with sports ERP at last stronger and track sports and and allow people we're way the increased Excluding our as data us markets to to with net running our Brazil, continued our every a investing process at sales in brand the and were customers

fact CHF QX of Moving the the that net But air on XX.X investments the margin million result This in XX.X from controlled, well maintained as XX of reduction expense, X EBITDA to the three was share-based million for compensation, air a while numbers. cost, in CHF last to expenses freight, are to the first would QX granted had margin fell a for above from prior-year freight period. in SG&A have adjusted we down higher, majority the seen QX the XX.X% the share-based a million EBITDA the million Despite months, CHF be from awards XXXX adjusted X.X%. to but of as only slightly prior-year this The vested our year's year, of previously decreased CHF positive period. strengthened XX.X slightly we awards of majority granted the last year. the in in of expected share-based vast

million well sheet, be support our from million cash, course, capital of X.X% expenditure of slight the balance infrastructure, business this being, Moving CHF CHF The capital infrastructure, office Zurich. the Portland offices in a and driver continues which million XX.X net for We the with in ended growth CHF CHF main our quarter net by in our working was the reduction million [Technical new as of at XX.X to our increase XXX.X our to retail sales, IT our continued XXX.X to Difficulty]. driven investments by XXXX. high as especially and net stores, quarter of end

of and team the be passion first in was the moment The ahead. everyone since our still global had in Now, amount our experience the physically. look whole selling showed when from that was where new November last products energized super came We're contagious, spring/summer back will our we Especially let's what in upcoming we retailers season. XXXX will together to meeting team. week the Europe, this for full XXXX

being As from Caspar over. far mentioned, XXXX is

We of months. program on will This ON what the It includes the in with are ahead our of coming includes the Cyclon of on go additional items us. gear and upcoming be to Cloudneo many the out groundbreaking and runner's brand our of is subscribers the includes sustainability shipments incredibly products, in one that Cloudgo, to weeks. feet number new excited innovations this of first the athletes compete our big more even as an on stages expansion quest such the range exciting running on as bodies. throughout apparel to And summer

the the the our Shanghai, suffering around our are teams are especially in in their offices, APAC our COVID office from returning in situation China, in colleagues country. While to world

bottom strongly we expect is China, of some Although but relatively line. want our we a provide Despite to impact, our due on local impacted, significant impact small and details. the not do net business small a to share sales top additional

and to March ecom not own stores were to able retail our partners, wholesale customers. closed been XX has we warehouse ship our products Our and since

expect had and soon. authorities our resume local ago, operations we warehouse However, as of whitelisted two to days operations,

been all negatively store impacted are four refills. inventory in one stores open, mostly from locations closed, have in but and missing Beijing other While our Shanghai

to also proud, openings delayed locations our strong situation of we outside our not as sales the Despite in retail good We we and We X.XX a by to not retail travel. from have reach global an of The billion, the experienced regions. CHF China, strength supply our million uncertainties are certainly of to but affected the groundbreaking a in new position the customers. aspirations in are the a sales economy, than all now us net full-year increasing especially businesses To our until QX expect that, for team team of confident success us in caused well own execute XX% start increase least more extremely passion XX also feedback product are hurdle reflecting on ability of this CHF brand again of macro position CHF is apparel, expect are hungry today. makes a for and once put prior today, growth. chain, be inability serve launches, more of to production impact even new as The billion at XXXX. our our the but our our some strong our of Important factories, any outlook are we to last, receiving outlook. results to the the reach in This achieve versus XXXX. growth least, to our X as channels, for of

to allow year our compared full margin to that. additional announced in investments sales, expect the we to anticipate gross also million, in and in an goal airfreight strong our inventory range half year XXXX XXX points, increasing net CHF of XXX drive QX. the higher demand absolute try to into We QX growth-focused as XX.X%. internal the one EBITDA we And we Our a able in basis QX meaning using further in margin sales team, the to to in to will higher basis levels XXX still from If more to these be remains investments but increasing are additional meet balance adjusted are for seeing. impact net The of the adjusted freight while calls, modest we target brand margin impact our achieve expect higher profitability. EBITDA points the previous ambition to will we continue as air than we

and our across both the the So, stronger we are top bottom benefiting momentum from seeing are business. line

these we say daily dream. expectations. an our inspiration into is As the new mentioned And of in and that our passion delivered times to with in welcome and as to in the team. a in has It work to offices all would our like June I own done thank you this phenomenal our call all has goes pursuit the year. results will We this beginning, during joint can't for work our hard Zurich such challenging the above team wait new work ONlets

focused the excited and With would year. So, Or in world innovation your a say, XXXX. we the begin support race I for team. about in on as was on. class to now summary, to QX And to We Q&A like we again open of remaining and up in that, laps us Caspar, your the ongoing execution our Marc, XXXX. incredible dream an questions. start remain to Operator, Florian ready are are building great you ahead session. disruption in and Thank we and the session laser

Operator

Instructions]. [Operator

Jonathan First question from the Baird. line Komp is from of

Jonathan Komp

following at drivers I'm the when other that or business think market and start trends made you are want think main the of brand you some innovation, share are the drivers product you of the market the internal the I any biggest improvements accelerating share. by on awareness, seeing? in And look curious execution the point the what about factors up you're you to

Caspar Coppetti

know well. this You space very

factors. combination think it's I of a

First the of major in all, we're just gaining geographies. traction

ON. of [Technical in very for their or probably consumers has lives ON friend heard IPO that a the in time a XXXX, first So, through Difficulty] through the of have pair

and a friends. getting to talking their they're So, second are either pair

of brands. with grassroots-driven from styles options more the ON now other some is time, brand. At the there this very same of compete a that available the from So, are uptake best-selling

brand a And extremely then so, this combination and interested having of that is having you're powerful. product a relevant

more and gaining there. comes gain channels existing So, from market penetrating our this share share market mostly

Jonathan Komp

the First all, for in pipeline, about to Monster, they're that the which have most super we at said we the have We seeing? driving before, and the you're look well. you super, and you what gets keep excited it you resonating Vista, products. launched the initiatives just of performance Runner ability When new

consumers more discover will So, those products.

This about that. we're excited very of Cloudflyer. we're we're relaunching On summer, Cloudgo. that, the the top So, launching

the additions on [indiscernible] roster the have the with mid the coming on top, We additions Nova there.

So, feel perspective. very strong And of from a important I sustainability just we to it consumers, it's lineup us the important and our see so that topic to product and is resonates.

So, we increasing spoke we about the spoke channels. share, all of are Cloudneo, but consumers. recycled adding And material about the that we we're how with have also and resonates our then, products and

[indiscernible] So, discovering consumers were we're spoke are And expanding more more. we're elevate in our that many initiative. expanding that how performance geographies. And we with to doors, the and about Lightning able doors we

months. many So and we to aspects really for next XX and excites the together X coming have really feel And us from so that's we brand product distribution perspective. what

Jonathan Komp

as to get you about lever? target a timing Caspar the comments freight? to the we using strategic like think path some that offset given up think If quarter, I'm the one gross last the follow what fair points of one drove positive for about the you the basis first to pressure And amount you XX% it could maybe back offsets freight XXX I looks how some saw made margin, of the in curious the the about pricing that there, Martin. gross especially Just of then, should a and performance, on margin when or more. long-term of

Martin Hoffmann

into has the that, a into were bringing therefore, the think the airfreight we is this see that relative job you number. higher number the really spend time. end, airfreight. is thanks had this done we the were had net And great exactly products planning I right converting this efficient revenue in directly And than the more that expected. what much we we But impact from we than on has at spent right really this right we the lower in and to on and product what sales based the warehouse what to flew sales lower led to team

we quarter, it to amount. So, that, will able normal to impact we then, will the come seen in for second be share will of we airfreight but therefore, be quarter, as the expect also absolute down that And And will third less be we the have fly, lower. past. a still

think seen on we if out, it's we so then, very really been impact So, long-term we have gross airfreight. our that price goal. is from the would coming Caspar and in And take with about important that margin I line And that increases salary the they this increases at be we course mentioned, XXXX supply the XX%, to in to react in direct in put our on but also the position cost then see us will sourcing, potential that also on on also may which on the side, chain, super able and of is have important.

on So, gross margin. this is the the situation

Operator

Cristina of question Fernández is the Telsey. line from from Next

Cristina Fernández

follow to to and your able upside about quarter the being I wanted deliver in on comments products. the up sales to first more

bit relative both to there the quarter quarter perhaps fair or first expectations? the second to it maybe your of forward channels, say little was that wholesale prior to is from on So, side on the pull a a

Martin Hoffmann

demand efficiently And little order work in to the X. we of kept X and with we're selling where the the lot from retail also full in of website, seen, effects product we very very the are our total, we at also to able the majority upside the what on Cloud continue here. sales. had And plan in that to of the a timing There's the therefore, to it the But also that X in price new Cloud we especially more We've really to we really Cloud warehouse ability products ship launched on which able flying. were our convert actual partners Cloud sales. then comes added to in the

Cristina Fernández

in by of to on sentiment Europe based region, if out call. on seen what had you change look you you the demand US any or macro follow-up, at point sort last can conditions consumer a As the anything in versus the

Martin Hoffmann

for preorders spring, that We also into XXXX writing don't now. really summer right when we're that observe looking the we're

And that's you're strongest few feel feel playing resilient. think best that rates over market had that movement. plus/minus want incremental that, of what It's percentages. investments with really the to the category two we And we're have had also again, example, about store the here, definitely over of And the also I we in with two game position We seeing that a the in think, demand growth are a years, market in lot like And helps is last we're very the we I I point that brand. brands that And in to us. Japan, additional that in for little a observing. gain next not share. a three the to we where continue a years. can slower opening out bit we're

XXX% it's growth, market. and sentiment posting think consumer bound I that is this not shows to specific Now global one

Operator

is line Michael from question the Benetti Credit from of Suisse. Next

Michael Binetti

guys gross kind relook the still cetera? Congrats with be think work from in the you A parity as be on for where them? margins there's et headwinds. right channel you think on opportunity the mix do time right Vietnam at the to a at nice guess, imply on you really the saw long-term now seems, should businesses [indiscernible]. said goal. that through of a don't situation now? issues know the an at focus freight you long-term I there XX% It margin, you'd couple longer underlying term, you excluding freight since Does target some was And advantages, I that are that And I quarter. Or first us. quarter long now,

Caspar Coppetti

number the to at. that is XX% I feel look right the still

to I will play inflation think learn this. all into we how need

very this think I we the proactively As by prices. take adjusting mentioned,

we'll a with may is think the where goes. I we are. where digest to be margin rates all in air freight shipping important. negative the and ocean post I become monitor If which need stay slowdown in impact, think higher to position better. they they there's the may freight So, economy, cost and super costs Then see and this the Otherwise,

feel there uncertainties. are we So, many

moment. we I proven is that higher something go So, in is environment. the But that the a XX% wouldn't realistic non-challenged at have this

Caspar Coppetti

that, on since that's or the follow could last the guess, the year, I plan how changed SG&A maybe I update. OpEx If for

XXX said airfreight by gross EBITDA up you been basis margin you have basis think would said margin air about points same points. the And freight. the of that beat I about XXX

the said think prepared – in rest more of some I the of you of but a XQ, flow year higher remarks, commented seems through in like upside at revenue it upside you the reinvested So, you you that the would you the maybe the given I If EBITDA. strong XQ quarter continue can in why got we're to reinvested back speak through not any long-term and opportunities to to that you growth here? right, quarter plow rate to seeing upside year what in that

Martin Hoffmann

a side I order order strengthening think our our for project, ERP you in us. achieve to so in is what We see down time, was digest continued into travel, network. to that airfreight hiring. But part slow cautiously numbers we completing investing cost the the important didn't managed at in positive we which the our also EBITDA, talking distribution very in IT, of additional business, same on investing the were about super

especially maintain certainly currently we in this to at and net look the guide where growth has via, growth the be not if investments than the as marketing future [Technical Difficulty] we secure in the see additional down XX%, the strategic business where with right talent, of we overachieve would then sales fields you able on hiring I by higher the to airfreight. the said, slowed penalized is to and If and achieve line

Operator

the is Duffy from line question Jim of Next from Stifel.

Jim Duffy

tight, resulting Great also, any is seeing about or to supply, speak any remainder super capacity? the manage also material components you the supply of of evident you the there impact Are from to quarter. more you plans but about growth through very Can notable then scale still bottlenecks ensure And scale lockdowns? plans inventory numbers. China Guys, to XXXX Demand in however. strength could capacity risk? Are into XXXX? speak both the to

Caspar Coppetti

material Let's start with basically situation. the

dual are done materials last we've major we we've localized is basically all sourcing and it. over what So, the years

have supplier is So, that one we in basically material China.

not a and we're huge expecting – so, And not that's one.

seeing we're quite on that from a not impact negative we're So, and confident that.

produce side, opened where factory building we new million in our certain years, just live spring. partners. capacity a go key in pairs over I next the year the capacity invested a to that going Vietnam capability a to last was it's the has we've lot with On and

confident footwear very about we're to for situation the come. capacity apparel years for and next So the

freight in As because long you then, with to strong. was lot what they're big we'll know, see how or like Shoes something impacts feel recession very US, the so in also a Dean how of prioritizing is very, on to some think industry. add looming in can I that we're partners, definitely term. has biggest built capacity the and seeing results point, working with we And in whole that because much to is and QX of some they Huali. now, being kind the testament ON And ON a seeing we're potentially demand they And that built you're very build been of how the believe side, now the Martin's is the

a So, that is and, strong a share We very that gain we're available. market with can and confident again, very that brand lot there we I'm enough worried feel we very, ON. of not feel capacity is ON

Operator

Next Jay of line from question Sole the from UBS. is

Jay Sole

growth about Can I XX% the tremendous America. Obviously, America? maybe you're doors it North want with bit existing it more to develop with growth. maybe shelf a retail in seeing space partners? about in the new little you your growth how Is ask that from? talk North and where you're come retail business partners, more your DTC just talk Is to existing seeing partners,

Caspar Coppetti

is news coming everywhere. from Good

a examples. So, few let me you give

us, strong, very for need strength. to a US. the was was efficiency, at a volume, quarter lot so to it strong is very brand think get didn't to high quarter. proportionally So, I grew very It in especially grew very, over spend that speaks which the we important And successful what money BXC of

BXC retail, channels. market had So, we're increasing so, last roll-offs side. had when on share in we then, existing we higher the And at look yes, year than you basically

had give me at market by last let So, and you XX%. We an X% example of share the year, we're from Fleet end standing now Feet.

So, now, we about – XX this JD, also in are JD but we're we spoke doors. spoke added We basically, XX existing is doors Footlocker Footlocker, growth, we and door about at doors.

consumers. doors So, the and very we're is with the The that sell-through adding that's additional strong. is product very, resonating

positive really the across channels, we very board, all momentum. So across very,

Operator

from Next line question Stanley. is the of Kimberly Morgan Greenberger from

Alexandra Straton

question. This current for feel Thanks quickly. the levels is How Alex Greenberger. about Kimberly to for do and touch the so guys on I on inventory want half? much sometime you just finally, how against of you you Straton some are in the still that back distribution still just anticipate composition? then, constraints And have? taking Do the normalization of kind prioritizing you the

Caspar Coppetti

the couple inventory of things on A side.

of, I right feel a right, with a the think it's very was which for right confident the do key at question we big products have place, our ingredient – QX. you

able consumer. were is the about that product confident to feel that. the actually we So, with really, really foresee And we resonating very

QX, confident, we US availability have place. have the right the right we now So, we we available product have the at especially for good well, will that for more feel Europe We QX. feel in as on product

where a of a lots out, contraction of what's some a faces an in different unknown little additional is level port there's difficulties bit is that happening, everyone So, warehouses. airfreight sea needed, really Then as not on on Martin pointed still but will some than lot there's be in – or very inventory QX. still already the

minute, hard as the to And see to that's between the maneuver deliver product makes some the inventory which where kind quarters So, in exactly hard going it's sometimes the to also you'll out. and between on retailer. of a shifts months exactly you and it are bit potentially containers then time to

Marc Maurer

available. at question we BXC it's forecasting then, that, have we which product strong through, see, the mean, because make And business. they how by And right to try they show channel. of the you and course, whom really of prioritize consumers what Kimberly, a to course, serve? right of by in do selling to we very is we So do the quality so of your that ship, the account. want we up They're excellent

we that's was were the But with about inventory. to And been so, when Also, retailers to very a can aligning focus. hoard definitely of we're it. strict we bit there a a what little them. less big And what seeing ship sell really tried they time

Operator

Next Smalley of the question Morgan. is Grace from J.P. from line

Grace Smalley

relatively there Or consumer resilient of some and might think environment. more that the in is in brands referenced price category sort earlier think specifics Are ON demographics of I you to ON do you relatively any more the of an you category? points inflationary resilient sort the that? that about think about how make other

Caspar Coppetti

– so within seen or earlier dependent on, is gaining Generally maybe of and usually competitors. as probably lot ON, even crisis. speaking, a we different that category, our years the premium Especially, crisis In ON markets. on in goods XX crisis, XX% sporting those We're availability not running over seen in a the XX%, equipment the gyms of we've brand you've have and a is also especially is of two and from to category.

So, not luxury product. a we're

spending purchase buying a over good a people probably consumer like in if we car feel So, position or be that, we deferring defer product. or income because a a something still even disposable vacation would would go down, would running

people as when that also win has that this because are shown overly Marc ones as not have But we're buy? do which to more choices, they said concerned. an history considerate make So, most will brands want see most. opportunity the that we Typically, desirable earlier to our

Marc Maurer

and adding now Grace, speaking point. about one lot maybe were Cloudrun We the the Cloudgo. a

two we our price lower points the now the that or market just of at US$XXX. of that products bringing So, are to launched are have end

experience brand. technology sensitive to choice So, the the basically customer of an buy product price also more ON give the a they and

right So, right there. at time probably the the product

Operator

Next question John Berenberg Stansel Capital from is the of from Markets. line

John Stansel

the you broader to know you than you JD get a of bit wholesale of an term, are changing XXXX and how in as by track? versus think longer mentioned wholesale call. that I How little Footlocker that, a bit hoping then, was expansion door do expanding? on seeing I see last expansion door geography? update kind And you

Caspar Coppetti

We're trying of to very consistent strategy period a a have over long time.

A, doors, are going opening three feel Again, is segments in I gain similar we share. we think ago. additional where consumer answer very months the can be So, we to to

where we by be this discussion. give you the the to I end the So, year. approximately Footlocker is and feel JD we of can want numbers some

JD, roughly we talk are globally. talking we we're globally. XXX now. about Footlocker, XX XXX I in the doors XX So, about about right to In where doors roughly spoke

bit a it. you gives this feeling of So, for

we're the such, test with As doors. December first and opening

very run is this consumer So, it's also in the been kind segment that a of definitely especially new to the segments than Footlocker, into and more JD gain. we much going have our past, within – in geographical

us, well. at And we like a what in us. a I to very means lots kind we're ON really, spoke how bring sell range. way, to – to on shop of which UK, something as able doing then, to countries roughly want the shop part and we're it store to understand LatAm, still to is that's definitely It's here XX% if So, focus we like need to really we're highlight apparel, started apparel means, we're think we possible getting of life And best for just basically. about very, And has Italy, of we it. to a like XX% in the really, in France, really is, seeing that for work XX% need partners with that it's share sometimes well that

Cardoway just there, we Sport can two the expansion, really and So one when selling how we to out one at we apparel. that we in opened Chek. want add beautiful the XX% shop with shops, really, is look good at And achieved Basically, are of Germany [ph] share. doors with door highlight in gate,

just existing to So, a more even share that's through better get focus of ON's to the stores an with be big higher execution. going in product

Operator

Tom Wedbush Securities. from line of the from is question Next Nikic

Tom Nikic

rest the we the anything year? the rest I in the I like there growth second of wanted of Is be about you're would for XXs your to the for of growth year. suggest the how the, revenue half guess the versus you'd do full-year of constraining of year? high just ask revenues shape about QX QX or up just kind think And the I like I XX%. the guide think think

Martin Hoffmann

XX%. especially if it our the at on summer spring the QX, you call, mentioned Because season that start of January. at QX seen the I this to impact XX%, look eliminating and in you combine shifting If we wholesale, November basically QX the together, from is have and from then

products, wholesale in Then the base. mentioned off expect constraints QX, are some there. it's than not like-for-like positioned is in But So, of we on top jump Marc much that we still in first is still on what better XX% supply seeing the quarter.

and macroeconomic to want consideration also of all also then and have our is situation take the our the China same into said, the there, protect hey, environment And we we that higher want to uncertainties time, given. aspiration mentioning, outlook. philosophy in this we have guidance providing year a full is follow profitability. we We then were that to than of into our And together put that. prudent At the the

Operator

this disconnect time. Thank joining questions for and no concluded have day. the your you gentlemen, may and are Goodbye at further pleasant a you conference telephone. and now Ladies There is

On Holding (ONON) 17 May 222022 Q1 Earnings call transcript