Federer-backed On's shares plunge as Americas sportswear growth slows

Executives said the company would not "compromise" its full-price selling strategy for higher volumes even as bigger rivals turn to discounting to lure cash-strapped consumers.

"We are not sprinting for short-term volume. We are deliberately engineering for the multi-decade value of a premium brand," co-CEO David Allemann said on a post-earnings call.

The strategy helped direct-to-consumer sales — or sales made through its stores and website — grow about 34% in the quarter. Wholesale revenue growth, or sales made via other retailers, however, slowed sharply, rising 12.7% in the second quarter compared with 25.1% in the preceding quarter.

Still, On forecast full-year gross profit margin of at least 65%, up from its previous expectation of 64.5%, and widened its annual net sales forecast range to between 3.47 billion Swiss francs and 3.56 billion francs on a constant-currency basis, compared with its prior target of about 3.51 billion francs.

However, Jefferies analyst Randal Konik warned that margin gains may not be sustainable as growth moderates and inventory levels remain high, adding that those trends could result in downward estimate revisions.