On Holding (NYSE:ONON) shares fell Tuesday after the company reported fourth-quarter earnings, as disappointing revenue guidance overshadowed a headline beat amid a broader market sell-off.

The company reported adjusted earnings per share of 31 cents, topping the 18-cent analyst estimate.

Net sales for the three months ended Dec. 31, came in at $930.66 million, edging past the $915.20 million consensus forecast, according to Benzinga Pro.

Full-Year 2026 Revenue Guidance Disappoints

On Holding said it expects fiscal year 2026 net sales to exceed $4.304 billion. That figure trails the $4.590 billion analysts had penciled in.

Gross profit margin for 2026 is expected to reach at least 63%, while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin is targeted in the range of 18.5% to 19%.

Record Gross Margin in Q4

On Holding’s fourth-quarter gross profit margin hit 63.9%, which the company described as a new fourth-quarter record — up 180 basis points year-over-year.

The company attributed the improvement to structural operational efficiencies, strong full-price execution and favorable foreign exchange dynamics.

Adjusted EBITDA margin reached 17.6%, up 120 basis points year-over-year, as the company continued reinvesting into brand building, innovation, technology and retail expansion.

DTC and Wholesale Both Accelerate

Full-year net sales climbed 30% to 3,014.0 million Swiss Francs (~$3.85 billion to $3.9 billion). The direct-to-consumer channel grew 33.7% to 1,260.5 million Swiss Francs, while wholesale rose 27.5% to 1,753.4 million Swiss Francs.

In the fourth quarter alone, total net sales rose 22.6% to 743.8 million Swiss Francs, with DTC up 21.7% and wholesale up 23.4%.

Balance Sheet

Cash and cash equivalents as of Dec. 31 rose 10.3% year-over-year to 1,019.9 million Swiss Francs, up from 924.3 million Swiss Francs.

Net working capital expanded 14.3% to 570.3 million Swiss Francs from 498.9 million Swiss Francs.

Analyst Consensus & Recent Actions

The stock carries a Buy Rating with an average price target of $60.93. Recent analyst moves include:

• Needham: Buy (Maintains target to $52 as of March 3)
• Telsey Advisory Group: Outperform (Maintains target to $65 as of March 3)
• Telsey Advisory Group: Outperform (Maintains target to $65 as of Feb. 24)

ONON Price Action: On Holding shares were down 7.46% at $43.31 at the time of publication on Tuesday, according to Benzinga Pro data.

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