Good day. My name is Dennis, and I will be your conference operator. I would like to welcome everyone to the On Holding AG First Quarter 2024 Results Conference Call. I would now like to turn the conference over to Jrit Peter, Head of Investor Relations. Please go ahead.

Good afternoon, good morning, and thank you for joining the 2024 first quarter earnings conference call and webcast. With me today on the call are Executive Co-Chairman and Co-Founder Caspar Coppetti; CFO and Co-CEO, Martin Hoffman; and Co-CEO, Marc Maurer. Before we begin, I would briefly remind everyone that today's call contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our 20-F filed with the SEC on March 12 for a detailed discussion of such risks and uncertainties. We will further reference certain non-IFRS financial measures such as adjusted EBITDA and adjusted EBITDA margin. These measures are not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Please refer to today's release for a reconciliation to the most comparable IFRS measures. We will begin with Casper followed by Martin leading through today's prepared remarks, after which we are looking forward to opening the call for a Q&A session. With that, I'm very happy to turn over the call to Caspar.

Thank you for joining us today. Martin, Marc, and I are in great spirits as we had a fantastic start to 2024, with net sales of CHF 508 million in the first quarter, for the first time surpassing the CHF 0.5 billion mark in a single quarter. We have continued to grow substantially, just shy of 30% on a constant currency basis and have made great progress in every region, channel, and category. What makes us especially proud is that we are achieving this growth at an ever-increasing profitability. Our gross profit margin of close to 60% in the first quarter underscores the power of our strategy to be the most premium global sports brand. Allow me to shine some light on the progress that On has made in our core strategic areas. At On, everything starts with running. The Lightning strategy of winning on the race course with next-level innovation and gaining market share with everyday runners continues to deliver for the On brand. Three weeks ago, Helena won the marathon in Boston for the second time, becoming the first woman in two decades to go back to back. She was running in On head to toe, including groundbreaking new footwear technology, which On will reveal in Paris this summer. We would like to congratulate Helena and also thank our innovation team for the incredible work developing the fastest raced products. The rain element of this strategy means converting the credibility of our innovations and athlete successes into market share gains, with everyday runners enjoying their local running routes. In our new global run count, we are seeing very positive results across all regions with market shares of more than 10% in cities such as Tokyo and Berlin and across key cities in the U.S., from Boston down to Nashville and from San Francisco down to L.A. The market share gains are driven by the success and rapid adoption of our latest high-performance running franchises, Cloudmonster, Cloud Server, and Cotrone. We are also seeing a very positive effect from the local run clubs that we are organizing from our own stores, particularly in key cities like Tokyo, Berlin, and Los Angeles. This brings me to an update on our own retail expansion, which is progressing well and delivering outstanding results. In Q1, we opened stores in Berlin and Portland, Oregon, which brings us to over 50 stores globally, 34 of which are owned and operated by On. Stores in Paris, Janedis, Milan, and Austin, Texas, will open in the coming months. On the wholesale side of the business, we continue our disciplined strategy of being very intentional in choosing the right partners and adequate door footprint with a clear focus on performance and young consumers. On our road to becoming the number one running brand, we continue to win market share in run specialty stores. Wilde Sporting Goods provides us access to high school and college athletes, who On resonates with particularly strongly. In Q1, we went live with Zalando in our EMEA markets, an important digital marketplace in the region that connects the On brand with additional younger consumers. Lastly, we have also made strong progress on our apparel initiatives through resizing our entire collection to fit more customers in a consistent way. We have significantly increased our addressable market. Just a week ago, we introduced FKA Twigs as a new creative partner and the face of our upcoming training collection that will be launched in August. Over the past weeks, we have also rolled out our first apparel collection in tennis, and fans can now wear the same look as seen on Bengalon and Digoiatec. Particularly, apparel showed extremely strong demand in our D2C e-com and our retail channels, with apparel contributing around 25% of purchases at, for example, our Paris Santamera store. You can tell that after such a strong start, we are very optimistic for the remainder of the year with many more highlights to come, not least being the Olympics in Paris. Before I hand over to Martin for the financials, I would like to point your attention to next week's Annual Shareholders Meeting. We are very excited that Laura Miles stands for election as an addition to our Board of Directors. As President of Electronic Arts, entertainment and technology, we feel that Laura can bring a lot of expertise, creativity, and technology insights to our Board. We look forward to receiving your support on our election and the remaining motions proposed by the Board. Over to you, Martin.

Thank you, Caspar, and hello, everyone. You summarized it very nicely. We continue to rapidly and successfully execute our vision and goals that we communicated during our Investor Day last October. At the same time, the passion, innovation, and entrepreneurial spirit in our team continue to create products, results, and impact that drive excitement far beyond the pure execution of the plan. You already mentioned Helena, but other members of our growing athlete team are bringing home more wins and medals almost on a weekly basis. From a new mile record at a panellist to Abrahams' impressive victory and Swiss record at the Barcelona Marathon, Legate and Bencheldon's respective tournament wins on clay in Madrid and Houston were notable as well. Another example was our global meeting, where we brought our teams together a few weeks ago to present our new products for Spring 2025. Our team created a runway show that would have easily turned heads at any major fashion event and ignited an unimaginable level of energy for our future apparel business. This will certainly be felt by our wholesale partners when we share it with them in the coming weeks. The energy in the different teams shows the power of bringing together a diverse set of people, each with an individual mission behind the coming call to display the ultimate embodiment of teamwork. Our team, we are really grateful for all your great work. With that, let me move on to providing a more in-depth review of our Q1 results. We had an exceptional Q1, which was ahead of our expectations. Caspar mentioned it, but it's worth repeating. For the first time in history, we exceeded CHF 500 million in net sales in a single quarter, a milestone. Net sales for the quarter reached CHF 508.2 million, growing 20.9% year-over-year. As expected and discussed on our call in March, this includes considerable FX translation impact from the conversion to our reported currency, Swiss francs. On a constant currency basis, we grew by 29.2% in the first quarter of 2024. This growth is supported by the strong consumer demand that we have seen across all our channels and geographies. The majority of growth has come from the strength of our direct-to-consumer channel, resulting in a significant increase of our DTC mix by almost 500 basis points from 32.6% in Q1 '23 to 37.5% in Q1 '24. Net sales grew by 39% versus the prior year period, contributing CHF 190.5 million to our top line. Currency-neutral growth was even higher at 48.7%. We continue to successfully optimize and expand our digital ecosystem. Caspar already mentioned the expansion of our digital marketplace at Zalando. In Q1, we also launched our first commercial app, which is now available globally and allows for the most intimate customer relationship across our digital outlets. The app serves as a key pillar in our digital strategy to further enhance the customer experience, offer more personalized offerings, and ultimately drive loyalty and deeper customer value. With that, we are also investing in our membership program. We have tripled the number of members in each of the past two years, but still have huge potential to increase the share and value of our customers that connect more closely with us through this channel. As our growing own retail network becomes a more important part of our D2C ecosystem, we have a strong focus on a seamless omnichannel experience across all customer touchpoints, consistently meeting the customer in whichever environment they prefer. Wholesale also grew by 12.2% year-over-year, reaching CHF 317.7 million in the first quarter. On a constant currency basis, wholesale growth was 19.8%. As previously discussed on our last call, this slightly more modest Q1 growth rate in the wholesale channel was expected and intentional, partly due to the closure of non-strategic doors which allows us to focus on the premium position of the brand. In Q1 last year, our wholesale revenues were helped by the initial selling into large new key account partners, which are now driving strong controlled sell-out growth. The same overall dynamics discussed above are visible when considering our net sales performance by region. Starting in EMEA, which grew by 6.1% to reach CHF 126.2 million in Q1. On a constant currency basis, growth was 10.4%. While the store closures led to a temporary reduction of our wholesale sales in the DACH region, direct-to-consumer growth in those markets has accelerated, and we continue to see strong growth in all other EMEA markets. The strength of our DTC business in EMEA continues to be exceptionally strong and validates our strategic priorities in the region. This is evident from the very strong start we had in our new retail store in Berlin but also significant traction and growth in some of our still nascent markets such as France, Spain, and Italy, largely driven by our D2C channel. Our Americas business also started off strongly in Q1 and demand for the brand remains high. Compared to a prior year period that was elevated as a result of the initial sell-in into some of our key accounts, net sales in the region grew by 22% year-over-year to CHF 29.6 million, with underlying constant currency growth at 30.4%. While we had significant FX translation impacts in Q1, we expect the translation impact to be less pronounced during the remainder of 2024, if the current U.S. dollar to Swiss franc spot rate persists. Caspar mentioned the run account success in the U.S., and we are pleased to continue to observe increased brand awareness in our core communities, converting to high-quality demand and exceptional sell-through strengths in our strategic focus areas. While the vast majority of our Americas business is from the United States, we continue to gain momentum in Latin America, with sales in Brazil, for example, doubling compared to Q1 2023. We also see incredible momentum in the Asia Pacific region, which, for the first time in our history, made up more than 10% of our overall business. Growth of 68.6% compared to the prior year period led to net sales of CHF 52.4 million in Q1. On a constant currency basis, growth was an amazing 90.7% year-over-year. With unprecedented demand levels across the region, it is difficult to highlight just one area of success, but if I had to pick one, it would be the acceleration we are seeing in Japan. If you have been to Tokyo recently and visited our store, you would know what we are talking about. The store alone has more than doubled its net sales year-over-year, a true testament to the brand heat in the region and the success of our own retail execution. Turning to our performance by product category, net sales from shoes grew by 21% to CHF 484.7 million in the first quarter. As already alluded to, we are very happy that our performance running vertical has contributed the majority of the year-over-year growth. The launch of the Cloudmonster 2 has continued the incredible performance of this highly successful franchise. With upcoming launches of the Cloudrunner 2 later this week and the Cloud Server next in late summer, we have a strong pipeline of innovation to come in our running lineup to continue winning market share. In our performance all-day category, the Cloud Tilt has exceeded our expectations and demand is significantly higher than supply. Net rest growth in apparel was 16.7% year-over-year, resulting in CHF 19.7 million for the first quarter. The underlying demand was significantly stronger, exemplified by our DTC channels where apparel grew at a much faster rate than shoes, albeit off a much smaller base. Also, as announced, we have updated the sizing on the majority of our collection to consistently meet and deliver the right fit for our global customers. In the interest of providing consistent sizing offers in-store, we decided to take back some items from some of our wholesale channel partners, resulting in a one-time correction to our reported net sales figure. With the high DTC demand and confidence in our new apparel product lineup, we expect growth rates to continue to accelerate significantly from here for the remainder of the year. While driving strong sales growth, we are also able to significantly increase our gross profit margin. The higher net sales mix from the strong margin DTC business compared to the prior year, as well as the progress we made in managing our inventory more tightly, allowed us to reach a very strong gross profit margin of 59.7%, up from 58.3% in Q1 '23. Looking down the P&L, SG&A expenses, excluding share-based compensation, were 48.8% of net sales in Q1 this year, increasing slightly from 47% in the prior year period. The increase is primarily the result of higher marketing expenses as a percentage of net sales. While we had relatively low investment levels in brand building in Q1 '23, we increased our investments in upper funnel brand-building campaigns and partnerships in the most recent quarters. We feel this strategic focus is very important to support the next growth phase and the long-term health and success of the On brand. You can expect to see even larger activations as we approach the Olympics and other significant brand moments this summer. Resulting adjusted EBITDA margin for Q1 was 15.2%, up from 14.5% in the first quarter of 2023. This number came in ahead of our expectations and puts us in a very good position heading into the remaining nine months of the year. As anticipated and communicated at our full-year results in mid-March, the reversal of the U.S. dollar to Swiss franc FX rate from its low point at the end of December means that our U.S. dollar balance sheet assets were revalued at a significantly higher rate at the end of March. The result is a sizable unrealized FX gain in Q1 that supports a very strong and record quarterly net income of CHF 91.4 million, which brings me to our balance sheet. Capital expenditures were CHF 9.2 million in Q1 '24 or 1.8% of net sales, slightly down in absolute terms from the CHF 9.7 million in the prior year period. As previously mentioned, this will begin to increase again in the coming quarters due to higher expenses related to our continued retail store rollout. On the inventory side, we continue to actively manage our inventory and decouple our inventory growth from our top line expansion, which drives efficiency in our working capital. Our inventory position has remained broadly stable versus the year-end and stood at CHF 65.3 million at the end of Q1. Finally, as a result of our strong operating cash flow of CHF 81 million, we have further increased our cash position from CHF 494.6 million at the end of 2023 to CHF 584.6 million at the end of Q1 '24. With that, I would like to look ahead towards the remainder of the year. We are all extremely excited for the Summer Olympics that are less than two months away, taking place close to home in Paris, and the games themselves offer a great opportunity for us to build our credibility in and beyond the running world. As mentioned, we are planning to open a second store in Paris, this time on Champs LLC. During the Olympics, our two stores will serve as hubs for the running community to connect and move. Many of our athletes have already qualified or been nominated by their respective countries, and we expect over two dozen On athletes to hit the starting lines across track, triathlon, tennis, and, of course, the marathon. We are ready to support them with our fastest, most innovative, and most sustainable performance products yet. Until we get there, we will tell the inspiring stories of our athletes on their journeys toward what is for many the biggest moment in their careers. For Dominic Global, a review from South Sudan, it is the heartwarming story of a multiyear fight towards the ultimate goal of representing Switzerland in Paris this summer and the legal battle to make it possible, which is still ongoing. Outside of running, we will also continue to focus on further building On's brand awareness to allow us to reach new highs. To do this, we know we must scale existing and new audiences globally with large brand moments, which includes collaborating and partnering with meaningful individuals in the broader sports and fashion space. One example is our recently announced collaboration with FKA Twigs, and in a few weeks, we will announce a first big global partnership with an individual that will further build our credibility and awareness with our target communities. With everything else we have planned for the next few months, we are fairly certain the world will be talking about On more than ever before. Regarding our business and financial outlook, we are optimistic and excited about our momentum and pipeline and what lies ahead for the rest of the year. At the same time, we remain prudent in the way we plan for the future, always taking into account the dynamic macroeconomic and consumer environment. The continued high demand for the On brand across the globe and the strong order book for the second half of the year, however, gives us confidence to reiterate our full-year constant currency net sales growth rate expectation of at least 30%. Considering the FX movements over the past weeks since our full-year reporting, this implies an increase to our reported net sales expectation from CHF 2.25 billion to at least CHF 2.29 billion at current spot rates. As you have also seen in today's release, we are retaining our gross profit margin guidance for 2024 at around 60% and continue to expect an adjusted EBITDA margin for the full year in the range of 16% to 16.5%. We are ready to bring our fire to Paris and beyond. It will be an exciting summer. We wish all of you a great time and look forward to welcoming you back in mid-August for our half-year results. With that, Caspar, Marc, and I would like to open up the session to your questions.

Your first question is from Jay Sole with UBS.

Great. So a lot of great information in the prepared remarks. Could you talk a little bit more about Asia growth? Martin, you mentioned Japan, a lot of momentum in Japan. But what about China and some of the other regions in Asia? Can you just talk about how the brand is building momentum in those other regions?

Yes. Welcome, also from my side. Thank you for the question, Jay. We're very proud that for the first time, we surpassed the 10% mark. We also stated that we want to bring China alone to over 10% over the next years, and we feel we're well on track. China is going according to plan. We actually just launched a new live streaming studio, taking more and more share from our D2C sales as well. So, we're really aligned with the market there and continue to elevate the brand within the digital environment. We will have roughly 30 own doors, a little bit more by the end of the year. So we're also continuing that expansion well; demand is great. We're in talks with some key small partners to bring larger flagship stores in China to life, which will be an important milestone for us. We're very happy with what we're seeing in China. Japan is extraordinary, well ahead of our expectations, and we see a lot of tourism going into Japan as well. That generates benefits from the currency as we see demand grow, but not only is our own store is doing really well, but also our wholesale doors and DTC is ahead of plan. We're also seeing strong performance in Australia, making Asia Pacific a super positive picture for us.

Terrific. And if I can ask one more. You mentioned the Cloud Tilt has exceeded expectations. Can you just talk about how the product assortment and the sales within the price assortment continues to diversify beyond the cloud and Cloud Tilt into other styles? Can you maybe give us an update on where that stands right now?

Yes, happy to jump in here. Look, diversification has been a significant game for us for a long time, and we're actually very happy that we are able to diversify our offerings across categories. Within categories, we're not dependent on a few styles; quite the opposite, we're now focusing more on building franchises. I think if you want to be a little self-critical, we probably have too many product brands, and consumers cannot remember all of them. That's why we have, for example, in running, pushed on the franchise to strengthen the running franchise and the server franchise. On the lifestyle side, you mentioned the tilt, and we are definitely being blown away by the response. We had an early indication of how good it could be with our live collaboration that focused on that. If we had more product, we would undoubtedly be able to sell more of the tilt. With that, on the lifestyle side, we now have a really balanced portfolio, and obviously, Cloudnova and also Roger franchises stand out to be mentioned.

In the interest of taking as many questions as we can today, please limit yourselves to one question.

Thanks, everyone. I want to ask about some of the new channels of distribution, Dick's, Foot Locker, JD Sports, etc. I know you mentioned Dick's briefly in the prepared remarks, but how is the brand performing in those new channels of distribution? Can you just give us an update on the door counts for those retailers?

Yes. To take the discussion to a higher level, I want to provide everyone with an overview of how our business is changing. With those key accounts coming on board, they are playing an increasingly important role in our overall sales. We're very happy that we are able to sell the products we want in those stores. For example, at DSG, one product is resonating really well. This is reflected in the runners' count we mentioned. We're catering and learning to cater more to these bigger doors, where we're performing really well. At the same time, we want to continue to be great partners with the field accounts and on specialty. We're investing a lot in warehousing capabilities to fulfill reorders, which is essential for those businesses so that we can have the product in the channel when the consumer wants it. Overall, the numbers are very positive, and demand is extremely strong. Currently, we have 220 doors with CSG, and by the end of the year, we'll be at 285. We will add those additional 65 doors as part of the Fall-Winter 2024 collection.

Your next question is from Cristina Fernandez with Telsey Advisory Group.

I wanted to see if you can talk about how the order books have been trending in the past couple of months since we last spoke, particularly in the back half. Last call, I believe you mentioned that given where the order book trended, there could be upside to the outlook for the year. Is that still the case? Any color there would be helpful.

Thanks, Cristina. Let me take it from a higher level and then return to your specific question. As mentioned in the prepared remarks, we had a great start to the year, and especially our D2C channels have seen really strong growth globally. At the same time, we were fully in a position to fulfill that demand from a warehouse perspective. Our Q1 results strongly confirm the pillars of growth that we outlined at Investor Day last year. From winning in running to the performance of our own retail stores to apparel. Looking towards the next few months, we expect significant trend moments, and we are super excited about this. In June, July, and August around the Olympics is where we will all focus, as this is where we will allocate our marketing budget. It's less about Q2, Q3; it's about summer being our goal to elevate the brand to a new level. If we look at how we started the second quarter, it began positively, and demand for the brand remains high, as Mark shared. Across all our different channels and especially some key styles that Caspar mentioned earlier, the demand is very strong, partially even higher than expected. If we factor in the transition we are doing on the warehouse side, this puts us in a somewhat challenging position to have the right products at the right customer when they want them. This is a focus for us in the weeks to come. Regarding our order book for the second half of the year, growth is beyond our guidance growth, and we expect strong demand to continue and be there. This backs our guidance and confirms a robust outlook for the year.

Your next question is from Ari Tianello with BNP Paribas.

I wanted to touch on the Americas region and the strength you saw there in Q1. Is there any more color you can provide on how Americas performed regarding the channels? And then is there any change to what you're seeing or just how you're thinking about the Americas compared to a quarter for the rest of the year?

I think it is crucial to highlight what Marc said initially. We are seeing a change in how our business in the U.S. is built, factoring in the share of key accounts and field accounts, as well as the contribution of key accounts in the online business. The demand for the brand across all channels remains high, which is essential to leverage our channels and serve customers effectively while simultaneously driving higher margins alongside durable growth. We're confident in what we see in the U.S., especially with the big brand moments planned in the upcoming months, which will further enhance our brand awareness.

Your next question is from an unknown analyst.

Can you first talk about what the cadence of sales was within the quarter? And then any color on trends you saw in April?

Yes, I think we already elaborated on that in the last commentary regarding how we're looking at the next months. I really want to reiterate how crucial summer is for us. We're focusing on bringing new partnerships to life around the Olympics. We're not running our business on a month-by-month basis but rather on a long-term horizon. Our focus is on summer being a crucial part where we aim to elevate the brand. For Q1, our reporting indicates that we had a good January, a great February, and a great March. This resulted in the overall strong result without skewness toward any specific month or trends.

Your next question is from John Kernan with TD Cowen.

Congrats on all the momentum. I wanted to talk about the gross margin outlook, specifically regarding your gross margin, which is up about 800 basis points from Q1 2022. How should we think about the gross margin outlook for the remainder of the year? And how is the flow of COGS as we get into the back half of the year?

Thanks for the question, John. Our business has consistently operated on target margins for quite some time. However, in the past, we faced external effects that impacted our ability to report that full margin. Q1 further confirms that message. The upside from last year is driven by the strong DTC performance and the higher mix from the D2C channels. We've also managed our inventory successfully over the past 12 to 14 months; thus, we have less impact from debt side which also affected our Q1 numbers last year. Our guidance for the full year is to be around 60%, and our long-term goal is to be 60% plus. We're showing quarter-over-quarter that we are operating the business on those levels. We have a very high share of full-price sales, which significantly contributes to the strong margins across all channels as well as our new retail channel. This proves the brand's premium position.

Your next question is from Michael Binetti with Evercore.

Congrats on a great quarter. Thanks for all the detail on the strategy and the build-out and the long-term outlook. I wanted to ask you, I guess, just one small question on the P&L. Is there any way you can help us size the one-time pullback of apparel you mentioned in the management comments and the accounting for that? Was that contra revenue in the quarter? I'm just curious how to think about that. And then could you speak to some of the things that we saw intra-quarter? There was some more volatility than we're used to in some of the near-term metrics around the distribution center and some questions about how the new distribution center is operating? Are there still duplicative costs running in parallel as you continue to ramp that facility? And is there anything you'd call the normal cost to expedite deliveries early in the year, or have you even seen instances where you've left demand unmet in the quarter?

Thanks for your questions, Michael. Let me take the first one on apparel. As you all know, apparel is a huge opportunity for us, and we've made great progress. One thing that has been holding us back a bit was that our sizing wasn't fully consistent with what other brands were doing in the market. So, what we've done now in the first half of the year, and you'll see a little more of that in the second half, is we've readjusted the sizing and the fit to ensure we capture more body types and allow more consumers to engage with the On brand, also from the apparel side. This adjustment has already been well-received. We've helped our retail partners exchange poorly fitting products with more appropriate ones, and it's paying off with significant success in our own channels as seen in lower return rates. We're seeing some stores delivering 25% of sales coming from apparel. We're very happy about the progress we're making there.

Thank you, Caspar. I believe we shared a number in the last quarter, but our pre-books for apparel for the second half of the year are up more than 100%. This also gives us a lot of confidence in the future product that's coming and how our retail partners are responding. Regarding the warehouse side, the significant change we are undergoing is the automation of the Atlanta warehouse, which is an ongoing project. We're pleased we were able to transition into the new warehouse; thus, the double cost of having two facilities is ramping down. We're now running a huge business out of one warehouse while automating that same facility. This poses significant challenges to the team, which they are mastering very well. Otherwise, we wouldn't have exceeded our Q1 expectations. We also have a fantastic partner on the U.S. West Coast, balancing some of the order book with LAX. I think this is an ongoing progress that's occurring. On the gross margin, Martin mentioned we’re happy and that there are not many extraordinary impacts. What might happen is that the product demand you see is very strong. That means that we may need to use some air freight, but nothing too significant is expected in that regard. Outside the U.S., the warehouses are running very smoothly, and we are satisfied with our current state.

Your next question is from Ashley Owens with KeyBanc Capital Markets.

So, with new products and an overall heavier release cadence in Q1, you touched on some of the bigger wholesale partners. But can you just talk about any progress you're seeing within run specialty? Also, to focus back on Tilt for a second, I believe there are three colorways in men and women. Just any plans to capitalize on the better-than-expected performance there?

Yes, we're happy with the performance of the Tilt, and we've used those three colorways to upgrade previous versions. We appreciate that our launch product in the past always began with a selection of colors and then expanded options as the product gained momentum to manage our stock levels. So we're definitely working on extending the options. On run specialty and field accounts, I think it's essential to emphasize that reorders and fill-ins are crucial, which differs from how key accounts are managed. We are working to expand our capabilities to fulfill those advance orders promptly because demand is present. The Cloudmonster, in particular, has performed exceptionally well, and we as a brand are gaining share in run specialty overall. As Casper mentioned, other brands are also investing in the channel, which we see as positive. We believe the channel is essential for us and aim to maintain its momentum with continued innovation.

Your next question is from Jonathan Komp with Baird.

Just two questions. Martin, can you provide any more color on your planning as you finish Q2 and then into the second half, given that you are assuming some revenue acceleration from Q1? Also, could you, Caspar, speak to the first time you're engaging non-sports brand ambassadors? Can you provide more color on the strategy there? Any thoughts on how you see that developing over time? Additionally, are there any changes in the nature of those relationships, like with Roger and others?

Thanks, John. As mentioned, our focus is on the months around the Olympics, where we allocate the strongest part of our marketing budget. This is when we will drive performance in our e-com business the hardest. While we are keeping a bit back on spending to optimize for that moment we expect out of the great things we are about to speak about. The order book with our wholesale partners is strong, and we have excellent product launches still to come, both for the second half of the year and for the rest of this quarter. This will be delivered as planned, contributing to the acceleration we discussed. We noted the impacts that hindered us from exhibiting a more robust growth rate in Q1 to a stronger base last year, so we hold confidence that the 30% growth guidance is appropriate given current demand. Regarding your second question, we feel that the rules of engagement have changed between brands and celebrities. With our long-term partnership with Roger, consumers seek more depth than just marketing. We are looking for partnerships that offer collaborative opportunities. We don’t feel stuck in the sports arena. Collaborations with individuals like FKA Twigs, who has cultural influence, are of great value. We will certainly explore more of these partnerships going forward.

To address your third question, our partnership with Roger is extremely long-term, and we are thrilled with how it's developing. The Roger franchise has grown over 45% this quarter. This shows that the partnership is working from a product perspective. Roger is very committed to the brand and how we can use tennis to influence the all-day appearance of On. You will see many of the athletes we are launching together with Roger are at the early stages of their careers, indicating our long-term commitment to the partnership.

Your next question is from Anna Andreeva with Needham.

Congrats on a nice quarter, and thanks for all the color so far. I wanted to follow up on wholesale. I saw that it came in above expectations even with the door closures during the quarter. What was the sales impact from those closures? Did that come in line with plan? Are you seeing any sales transfer elsewhere from that? And just remind us how we should think about that impact in the second quarter?

Yes. The overall impact for the full year from the door closures in EMEA is roughly 10%, as also stated in the last earnings call, heavier in Q1 and Q3 since those are generally the larger selling months. Thus, it was heavier in Q1 than anticipated, affecting about 10% of our wholesale volumes. It's essential to clarify that the 10% refers to the wholesale volume in EMEA, not overall. It will influence Q2 slightly below 10% and will be more pronounced in Q4. We can confirm this has aligned with expectations. Importantly, we continue to build On as a performance brand in the channels serving performance consumers. We're successfully driving younger consumers into the brand. For instance, we launched the partnership with Sports Direct in Europe to connect with that demographic, and we were the number one running brand when launching in the London Oxford Street store of Sports Direct. We also initiated collaboration with Zalando, seeing strong growth in our own channel benefitting from some sales that are not available in specific partnerships.

Your next question is from Janine Stichter with BTIG.

I want to ask about the store format. I believe you opened a larger store for that earlier this year in Portland. I want to know what learnings emerged from that, and if there's anything that you're incorporating into your future openings?

Thank you, and we are very excited about the Portland store launch, which was a relocation from a smaller store that we had into a 315 square meter front-of-house store. This is not the largest format we have; for example, London is bigger, and our Paris store will be larger too, roughly 500 square meters. We're evaluating three different store types: flagship stores such as Milano, which will open, and New York Flatiron. We have medium-sized formats, like the stores in Paris, Austin, and Miami, and the smaller formats relevant mainly in China. We're seeing that larger formats work well for On, especially in high street locations where we can also attract tourists. This is one reason that Japan is proving very successful. Additionally, to effectively showcase apparel offerings, we need larger stores as collections are growing. This shift is something we're already seeing working in Portland, and we are very pleased with the opening and the trend within On retail.

Your next question is from Joseph Civello with Truist Securities.

Just wanted to follow up on the earlier questions regarding the Americas business trends in Q2. Is there any more color you could provide on the D2C side specifically? Are you witnessing any impacts on your D2C business as your wholesale segmentation continues to evolve?

Yes, to reiterate what we've discussed, what's essential is that demand for the brand remains high in this geography. This allows us to utilize our channels effectively and ensure they serve our customers best while driving higher margins overall. The decisions we've made over the past two years to expand into key accounts have significantly elevated the brand in this region, allowing us to reach the right customers and sell the right products. Ultimately, this provides mutual benefits for both channels; our retail and e-commerce support our wholesale channel and vice versa. We're confident in this multichannel business model.

Your last question is from Dylan Carden with William Blair.

I'm curious if there's any thought about the need to hedge currency and if you could remind us about fluctuations in the U.S. dollar to Swiss franc, and how that flows through to gross margin, especially given that your cost of goods is predominantly denominated in dollars. Then, just in the interest of setting expectations adequately, any way to quantify or explain the big bang you mentioned regarding the Olympics and its lift that's embedded in guidance?

The big bang is only a big bang if we don't talk about it beforehand. The hedging is something we will consider; we still have some room to optimize the way we handle our different currency flows and improve the impact and transparency on our financial results. This is why we now include constant currency data in our filings to ease understanding. The most crucial impact is seen on our net sales growth due to the high share of U.S. dollar business that we have. The gross profit and EBITDA are more naturally hedged; for example, on a gross profit level, the FX impact in the quarter was only 0.1%, which is very marginal, with a similar picture for EBITDA. However, we can optimize our hedging policy regarding balance sheet impacts in the future.

Your final question is from an unknown analyst.

Congratulations on a great start to the quarter. I have a question regarding inventory. It's extremely clean and lean, which is great to see. But how reliable and stable is the global supply chain? How confident are you in its capacity for the back half of the year, and potentially any impact from the big bang? Could you elaborate on the evolution and diversification of your supply chain as you expand into other categories like apparel?

Thank you. Taking the big bang question first, I just received videos of our product leaving manufacturing for the upcoming launches. Our supply chain is prepared for the big bang, but we plan our supply chain based on the marketing activations and guidance we provide. Currently, there are no disruptions in the supply chain, with only minor delays due to detours some ships are experiencing. Other than that, the supply chain is very stable, and we are happy with where our factory output stands. We are confident we'll have enough products to satisfy the demand underpinning our guidance. There are ongoing efforts to capture demand for specific products and colors as we see higher-than-expected demand in certain areas. We aim to establish a supply chain with reliable factory partners that can bring items to market on time as our apparel category grows over 10%. We are excited to talk more about our innovations as the Olympics approach.

Thank you all for joining the On Holding AG First Quarter 2024 Results Conference Call. You may now disconnect.