Sportswear brand On missed Wall Street estimates for second-quarter net sales, signaling pressure from a tougher consumer environment and higher costs from U.S. tariffs.

Financial Performance

On executives emphasized they were prioritizing profitability over sales volumes, mindful of the risk of discounting. The company posted net sales of 850.3 million Swiss francs ($1.05 billion) in the quarter ended June 30, missing analysts’ estimate of 878.16 million francs.

The company also raised its full-year gross profit margin outlook to at least 65%, from its previous expectation of 64.5%.

Market Performance

On, founded in 2010 and known for its sneakers’ distinctive hollow soles, has rapidly muscled into a sportswear market previously dominated by Nike and Adidas, eating into both brands’ market share.

Sales growth in On’s core Americas market, which accounts for more than half of its revenue, slowed to 13% for the quarter in currency-adjusted terms, down from a 17% increase in the March quarter.

On continued to post strong growth outside its core market, with Asia-Pacific sales rising 54.7% on a constant-currency basis.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.