On Holding AG ( ONON ) shares are trading lower after it reported fourth-quarter FY23 earnings.

The company reported fourth-quarter FY23 sales growth of 21.9% year-on-year to CHF 447.1 million ($504.23 million), missing the analyst consensus estimate of $510.19 million.

Adjusted diluted EPS for Class A shares decreased to CHF (0.05) ($(0.06)) from CHF 0.02 in the prior year, missing the consensus estimate of $0.11.

Net sales through the direct-to-consumer (DTC) sales channel increased 38.2% to CHF 206.6 million. Net sales through wholesale sales channel increased 10.7% to CHF 240.5 million.

Gross profit for the quarter gained 25.9% to CHF 270.2 million with a margin of 60.4% versus 58.5% a year ago.

Adjusted EBITDA grew 16.3% to CHF 71.9 million with a margin of 16.1%. The company held CHF 494.6 million in cash and equivalents as of Dec. 31, 2023.

Outlook: On expects an increased DTC share and to achieve a constant currency net sales growth rate of 26% for the first quarter of 2024. At current spot rates, this implies expected reported net sales in the first quarter of CHF 495 million.

At current spot rates and reflecting the considerable recent Swiss Franc strength, the company expects reported net sales of at least CHF 2.25 billion in 2024. 

Price Action: ONON shares are trading lower by 14.4% at $28.78 in premarket on the last check Tuesday.