10:16 AM EDT, 03/12/2024 (MT Newswires) -- On Holding ( ONON ) shares listed on the New York Stock Exchange tumbled Tuesday as the Swiss sports shoe maker swung to a surprise fourth-quarter loss and offered a downbeat sales outlook for the current three-month period.

The company posted an adjusted loss of 0.05 francs ($0.06) per class A share for the December quarter, compared with earnings of 0.02 francs the year before. The consensus among analysts on Capital IQ was for normalized EPS of 0.13 francs. Sales jumped 22% to 447.1 million francs but trailed the Street's view of 453.2 million francs. Shares of On Holding ( ONON ) dropped 16% during the trading session.

"For the first time since going public in 2021, (On) didn't crush top-line expectations in (the fourth quarter)," Wedbush Securities analysts Tom Nikic and Matt Quigley wrote in a Tuesday client note. "Given that investors have become acclimated to huge revenue beats from this company, this is likely to be viewed as a major disappointment."

Shoe revenue climbed 20% to 425.7 million francs, while apparel and accessories recorded gains of about 60% each. Net sales in the Americas climbed 19% to 300.6 million francs but slowed from growth in the 60% range in the previous quarter, according to Nikic and Quigley. Sales in Europe, the Middle East, and Africa advanced 23%, while Asia-Pacific surged 58% to 34 million francs.

Sales in the direct-to-consumer channel rose 38% to 206.6 million francs, while wholesale grew 11% to 240.5 million francs, according to the company. Gross margin expanded by 190 basis points to 60.4%, coming in "slightly above" management's long-term aim of 60%, the Wedbush analysts said.

For the ongoing quarter, On expects revenue of about 495 million francs, while the Street is looking for 517.9 million francs. The sports shoe maker expects an increased direct-to-consumer share and is seeking to achieve sales growth of 26% on a constant currency basis.

"We enter 2024 with a lot of tailwind and opportunities in all parts of the business," Co-Chief Executive Martin Hoffmann said in a statement. "The demand for the On brand remains very strong."

On anticipates full-year 2024 sales of at least 2.25 billion francs, compared with the 1.79 billion francs it recorded in 2023. Foreign exchange headwinds are estimated to be "more pronounced" in the first half, according to the company.

Price: 28.43, Change: -5.19, Percent Change: -15.45