Adds shares and sales growth in paragraph 4, stock price in 9 and graphic, consumer comment in 10

By Helen Reid and Juveria Tabassum

May 12 (Reuters) - Sportswear brand On ONON.N 49G.BN raised its profit margin forecast on Tuesday after strong first-quarter sales, as the Swiss company continues to gain ground in the sneaker and running shoe market long dominated by Nike and Adidas.

With 29-year-old actor Zendaya as a brand ambassador, co-CEO Caspar Coppetti said On is targeting younger, female consumers, adding that a clothing range launched with Zendaya in April is performing well.

First-quarter sales grew 14.5% to 831.9 million Swiss francs ($1.07 billion), beating analysts' average forecast of 822.5 million francs, according to data compiled by LSEG.

Shares in On were up about 5% in premarket trading after the company said it now expects an operating profit margin of between 19.5% and 20% for 2026, up from 18.5% to 19% previously, and a gross profit margin of at least 64.5%. It maintained its target of at least 23% sales growth this year.

STRONG LAUNCHES BOOST MARGINS

Coppetti said profitability was helped by successful new sneaker launches, with the Cloudtilt - retailing between 170 euros and 190 euros - the best-selling shoe across Foot Locker Europe in March.

However, a strong Swiss franc hurt On's sales figures in the Americas, its largest market by revenue, with just 3.1% growth compared with a 32.7% rise a year ago. Asia-Pacific was the strongest region with 44.4% sales growth.

On has changed up its senior leadership, with co-founders David Allemann and Caspar Coppetti taking over as joint CEOs on May 1, replacing Martin Hoffmann. Frank Sluis - previously at supermarket group Ahold Delhaize - joined as chief financial officer at the same time.

"We're very happy to have found, with Frank Sluis, someone that comes from a just under $100 billion revenue company that can also help us unlock some of these economies of scale," Coppetti said.

The stock is near its lowest levels in two years, having fallen more than 20% since the start of this year as the energy price shock triggered by the Iran war dents consumer confidence in the U.S. and Europe.

Coppetti said he has so far seen no impact from the energy crisis on demand, adding that On customers are typically less sensitive to higher petrol prices.

($1 = 0.7797 Swiss francs)