On Running's Market Cap Exceeds One-Tenth of Nike's Amid Tariff Challenges

The Swiss sneaker brand On Holding has significantly outpaced industry giant Nike in recent performance, now setting its sights on overcoming global tariff challenges. This competitive dynamic was highlighted by The Wall Street Journal, which noted, > "The Swiss sneaker brand On outran Nike. Now it’s betting it can beat tariffs, too." On's robust growth and strategic positioning have allowed it to capture considerable market share, while larger rivals grapple with evolving consumer preferences and economic pressures.

On Holding, founded in 2010 and publicly listed in 2021, has seen its stock surge nearly 65% year-to-date, with its market capitalization now exceeding one-tenth of Nike's. The brand's market share in athletic footwear rose from 8% to 12% from January to May, while Nike's dropped from 39% to 32% in the same period, according to YipitData. On's success is attributed to its direct-to-consumer model, continuous innovation like CloudTec and Light Spray technology, and a premium market strategy appealing to high-end consumers.

In contrast, Nike Inc. has faced a challenging year, with declining revenues and its stock price plummeting to a four-year low. Analysts suggest Nike's struggles stem from intensified competition, strategic missteps, and a perceived lack of innovation in performance running. The athletic-gear giant also anticipates significant financial impact from trade policies, forecasting tariffs to cost it around $1.5 billion in its fiscal year, an increase from prior estimates. This environment has created opportunities for more agile brands to gain ground.

The global sportswear industry, including On, remains exposed to the complexities of international trade tariffs. While specific tariff details for On were not fully disclosed, the company acknowledges its exposure, similar to its competitors. On is reportedly planning price increases this year, though unrelated to tariffs, as it navigates the economic landscape. Co-CEO Martin Hoffmann expressed confidence, stating that with a clear "North Star," the company has direction "in kinds of uncertainties like this."