Hello, my name is Eli and I will be your operator for today. Welcome to the on-holding AG first quarter 2026 results call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star and then one on your telephone keypad. Thank you. I'd now like to hand the call over to Liv Redlinger, Head of Investor Relations. Please go ahead.

Good afternoon and good morning to our investor community. Thank you for joining on the first quarter earnings conference call and webcast. With me today on the call are Kasper Capetti, founder and co-CEO, Martin Hoffman, outgoing CEO and CFO, and Frank Flus, our new CFO as of May 1st. David Alleman, founder and co-CEO, will also join us for the Q&A session. Before we begin, I will briefly remind everyone that today's call will contain 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 annual report on Form 20S for the 2025 fiscal year filed with the SEC on 3rd March 2026 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 I4S accounting standards. Please refer to today's release for a reconciliation to the most comparable I4S measures. Lastly, we prevent certain metrics in US dollars during this call using the exchange rate as set forth in the H-10 statistical release of the Federal Reserve Board as of March 31st, 2026, solely for the convenience of our investors. We begin with Casper, followed by Martin and Frank leading through today's prepared remarks, after which we are very much looking forward to opening the call for a Q&A session. With that, I'm very happy to turn the call over to Casper.

Thank you and a very warm welcome everyone to our first quarter 2026 earnings call. It is a great pleasure to share more on an outstanding quarter. The year is off to an extremely strong start. Net sales exceeded 830 million Swiss francs, the first time we have crossed the 800 million mark, growing 26.4% at constant currency. At the same time, ONCE's discipline focused on premium execution delivered exceptionally strong gross profit and adjusted EBITDA margins a clear reaffirmation of our premium strategy demand is incredibly broad based our strategy is resonating across regions categories and channels reaching more fans than ever before you see it in our numbers strong constant currency double digit growth in the americas in emea and in apex and well over 50 percent constant currency growth in apparel globally as we continue our strategy of growing toe to head these are numbers we are extremely proud of and as our business becomes more global and more multi-dimensional our vision to be the most premium global sportswear brand is only becoming clearer and we are even more committed to continuing to chart our own course you see the products we create the innovation we bring to market and the communities we build the energy around the brand was clear everywhere this quarter whether it was the electric atmosphere when flavi koboli won his first hardcore atp 500 title or the palpable excitement at the tokyo squad race or the bus at the openings of our newest stores in zol shenzhen and london it was clear our vision and strategic execution is reaching far and wide for me nothing captured is better than light spring what began as one of the boldest idea we've ever had is today proving itself on the world's most competitive stages this spring yerman krippa won the paris marathon in a prototype of the next generation of clubboom strike and at the london marathon helen obiri posted her most recent personal best the second fastest time ever recorded in a female-only marathon and all importantly we're also making huge strides in building out the technology into a true commercial engine for on in february we increased our production capacity for light spray 30-fold when we opened our light spray factory in busan south korea the quarter also saw us bringing light spray closer to a much larger community of runners from los angeles to boston to london thousands of fans saw the robot in action watched the shoe move from filament to asphalt in just minutes and then felt the product for themselves. The Light Spray CloudMonster Hyper sold out quickly across many of our channels, with particularly strong demand in Asia-Pacific and in the U.S. In the opening week of our new Boston store, Light Spray represented close to 20% of footwear net sales. We are currently selling several hundred pairs a day in our D2C channels alone. for technology still at the starting line of its commercial journey this is an exceptional indicator of demand during the quarter light spray also played a significant role in one of our blockbuster franchises product launches the cloud monster 3. the top of the line light spray cloud monster hyper sprayed in buzan brings our revolutionary technology to a broader consumer base for the first time the entire franchise update resonated strongly with consumers and is outpacing its predecessor across all regions. At the same time, LightSpray is only one part of our innovation pipeline. Zorio, on SuperFoam for Everyday Runner, is another major step forward. Compared with industry-standard EVA, it weighs roughly half as much but provides 60% to 70% more energy return. Having achieved the combination of SuperFoams with the structural engineering cushioning of CloudTech represents a generational shift in running technology, not just for ON, but for the industry. Surreal will debut with Cloud Surface 3 this October and roll out at a rapid pace across the key everyday running franchises in 2027. We will present these products at the inaugural ON Global Run Summit in Paris, where we will host our top 100 global run accounts. All of this matters because consumers are choosing to spend where products are truly differentiated, exactly where we are built to win on innovates at the intersection of performance design and sustainability in that sweet spot we create an unmistakable high quality experience for our customers an experience that we then build on and protect through every channel and every touch point as we grow for the long term this is what we mean when we say that we aim to be the most premium brand in sports and we see this play out in the commercial results and in consumer perception data our q1 brand tracker showed a sharp increase in runner awareness especially in the us in q1 we grew nearly 30 percent with our run special accounts in europe at the same time we continue to win new customers in everyday running through our closer relationships with leading sports retailers in markets including the us japan and europe running is where we continue to prove the power of our innovation and our great product with authentic communities and it continues to open doors far beyond running creating deep engagement growing our relationship with the movement class as you heard from david last quarter this new ageless consumer sees health as their new elf and sportswear as identity not utility they want to buy into a brand that has strong cultural relevance, and truly sits at the intersection of performance and lifestyle. Accordingly, we continue to see exceptional momentum in the quarter in lifestyle. We are being extremely intentional here. Products like Cloud Tilt are designed for sneaker taste, with the comfort, design language, and premium feel that young consumers are looking for. The proof is in the numbers. In Q1, Cloud Tilt and Cloud Tilt Remix saw exceptional growth in all regions, with Cloud till becoming the number one style at footlocker europe by wide margin in march additionally partnerships with leaders in the sneaker space are helping us acquire new young consumers at attractive margin profiles while continuing to enhance our premium positioning the highly solved after recent cloud swift relaunch with kiss and a female-led head-to-toe silhouette launch with cendaya show how we are building credibility with new communities through design culture and premium product the broader impact is already visible in our data in q1 18 to 24 year olds significantly increased their share of our d2c customer base the largest increase we have seen since our data began and this trend has accelerated into early q2 our q1 brand tracker also showed strong progress in both performance and style cues we have engaged with and converted new communities successfully before. When we entered tennis, it was a new community for us. Today, it is one of our most engaged audiences, our highest growth apparel vertical, and continues to deliver outstanding results in footwear. Training is also bringing thousands of new customers to the brand every quarter. And in outdoor, the Cloud Soma trail running franchise has had a very strong debut giving us another platform for product-led expansion for us this is all part of the same ambition to build the most premium global sportswear brand with the breadth to resonate across communities genders categories and generations as our reach grows we are protecting and strengthening our brand in an increasingly promotional market we are even more committed to our full price strategy we are reaching new consumers but we're doing it with quality and discipline our results represent this strategy sustainable premium growth the kind that builds the brand for years and decades to come so when i look at q1 i see much more than a strong quarter i see a brand scaling with momentum a team executing with clarity and a strategy that gives us even greater conviction.

And we are charting our own course.

We are as ambitious as ever and we believe the next chapter on can be even better. On that note, I'm very pleased to confirm that we will host an Invest Today in Zurich on September 21 and 22, 2026. It has been three years since our last Invest Today in 2023 and we have made tremendous progress since then. We look forward to sharing with you all the things we have dreamed about in this next phase of our journey and how we will continue to deliver on our vision to become the most premium global sportswear brand in years to come. This brings me to a moment of gratitude. To you, Martin, I want to express our deep and heartfelt thank you for an incredible run together over the last 13 years. You have been one of our closest partners on this incredible journey. Together, we have built, challenged, debated, pushed, and celebrated a true team. You have left an indelible mark as a strong leader the last five years as CEO and CFO, who ensured we had the financial strength, praise, rigor, and clarity to make our dreams real. We are deeply grateful for your leadership, your friendship, and your commitment. We wish you the very best for all your future endeavors, and we are pleased you will continue to support us all as an advisor into next year. David and I are thrilled to continue to lead our incredibly talented global team at ONN in this next chapter, serving as co-SEOs. The two of us built ONN together with our co-founder Olivier from an idea into a business 16 years ago, setting the foundation for what you see today. We then led it through over a decade of hyperscaling and our IPO, after which we continued to work hands-on as executive chairman in partnership with our senior leadership team, shaping ONN premium vision and strategy product and channel innovation as well as defining and building our growth engines across the business it is in this spirit of continuity that david and i see it as an immense privilege to further help forge on's path in these new roles we're also very pleased to have scott mcguire stepping to an expanded role as president and ceo and to have welcomed our new CFO Frank Sluis at the beginning of this month. They both completed our broader leadership team of both long-serving executives and newer editions as we continue our growth at global scale. So we're not changing direction. We follow the same strategy, the same values, and the same conviction that have guided us over the past 16 years since we founded the business. Our strategic growth pillars premium positioning and innovation led approach remain the path forward as co-ceos david and i will ensure our strategic intent is fully aligned with decisive execution as we continue to grow in size with that i'm honored for one final time on this call to hand over to my great friend and partner martin for the financial review thank you so much casper and hello everyone.

Before I go into the financial review for the quarter, I want to take a moment to say how thankful I am for my time at ON and for everything we have built together. I'm often asked what is most underestimated about ON? My answer is always the same, the team and our culture. The dedication, ambition, and humility of the whole ON team is extraordinary, and for that, I will always be grateful. It is the reason we have been able to dream so big, move so fast, and keep raising the bar for what this brand and premium sportswear can become. I also want to thank David, Kasper, and Olivier for so many years of partnership, trust, and friendship. I'm deeply grateful for the shared belief and commitment that have shaped this journey. While the timing feels right for me to move on, I could not be more proud to do so at the moment when the company is stronger than ever. Close to five years after our IPO, seeing our mission and vision translate into such incredible global success is nothing short of a dream. Those who know me well know that I will not miss the opportunity to say this in numbers. First, we have achieved significant top-line growth. Since our IPO, we have more than quadrupled the business, from 725 million net sales in 2021 to more than 3 billion Swiss francs this past year. This 15 of the 19 quarterly results as a public company being record quarters. Second, our vision to be the most premium global sportswear brand has driven one of the highest cross-profit margins in the industry, far surpassing even our own high expectations. We are building a company that sits on the apex of our industry when it comes to being premium. At our investor day in 2023, we set out a plan to consistently exceed 60% cross-profit margin. With the outlook we are providing today, we now expect to deliver a cross-profit margin approaching 65 percent. We have achieved this by staying true to who we are, committed to delivering high-quality products rooted in performance and design at full price and with the best consumer experience. We have provided the consumer with a new level of premium performance products and they are trading up. During this time, our average selling price has increased from around 145 us dollar to over 170 us dollars in tandem with this our own digital and physical stores offer the best brand experience allowing us to grow our d2c share from 38 to 42 and further expand the realized cross-profit margin and third we have reinvested into the future growth of the brand while driving higher profitability and cash flows on as a growth company our priority is to consistently invest into new pillars for future durable growth into the expansion of our addressable market and into our brand while at the same time driving efficiencies economies of scale and ultimately profitability and cash flow in 2021 our adjusted the dbda margin was 13.3 percent in 2025 we achieved 18.8 percent and we expect a further increase in 2026 our strong cross profit margin and our operational leverage today allow us to invest into more growth opportunities simultaneously than ever before to summarize our mission and our strategy are clear in some segments of the premium sportswear market we have already proven to be amongst the top three brands but still have room to grow from a large base in other market segments we have just planted the seeds for massive growth in the near future and we can do all of this relying on strong financials and most importantly on an incredible team these core pillars of our growth strategy are directly reflected in our first quarter results net sales reached a record 831.9 million swiss francs well above 1 billion if converted to us dollar net sales grew a very strong 26.4 percent year on year at constant currency or 14.5 percent on a reported basis more important than the total is the strength of each building block within our growth engine we continue to deliver industry-leading performance in our established markets like north america and central europe in these markets we are seeing our toe-to-head strategy truly taking hold with apparel and sneakers acting as powerful new catalysts for growth Simultaneously, our newer geographic segments in Latin America and Asia Pacific, including China, are gaining significant share, with constant currency growth exceeding 50%. This ensures that every pillar of our business is contributing to a more balanced, resilient global footprint, one that is perfectly positioned to compound our success over the coming years. Growth was once again led by our direct-to-consumer channel. Net sales reached 322.3 million Swiss francs, growing 28.7% year-on-year at constant currency and 16.4% on a reported basis. What is most compelling is the brand momentum we see. Our digital and physical traffic is outstripping our revenue growth, meaning demand is ahead of our current conversion. a great sign of the potential we have for future quarters. This validates our investments to further broaden the conversation with newer communities, to grow the premium market, and ultimately to lay the foundation for long-term strong growth. Within Direct-to-Consumer, our own stores continue to elevate the physical brand experience for our fans in key cities around the world. This allows us to deepen our brand presence in existing markets as well as to accelerate our growth in markets with fewer potential wholesale partners. We now have a growing number of stores in their second and third years of operations, including Miami, Milan, and our first store in Tokyo, and we are thrilled to see continued meaningful same-store growth and improvement of key retail metrics across this group and this is an important signal as we continue to scale retail and we look forward to opening stores in new cities for us including stockholm and sydney in the coming months wholesale also delivered strong growth again outperforming our expectations and validating our multi-channel distribution strategy for the first time in our history quarterly net sales in the channel exceeded half a billion swiss francs reaching 509.6 million this corresponds to growth of 25.1 percent at constant currency and 13.3 percent on a reported basis we continue to see great momentum with our global key accounts including dick sporting goods footlocker and shady sports even with these major partners we're only present in around 50 percent of doors giving us a meaningful multi-year runway for further openings while preserving the controlled nature of our expansion and premium quality of our distribution looking across regions the americas reached 450.7 million swiss francs a new quarterly record at constant currency net sales grew a strong 17.1 percent reported growth was 3.1 percent reflecting significant foreign exchange headwinds we're pleased with the continued increase in awareness and our maintained commitment to premium execution and full price sales overall awareness crossed the 30 mark for the first time an important milestone our latest campaign with zendaya an outreach to younger and more lifestyle-oriented consumer has already generated over 20 million highly engaged views in the us alone together these prove our continued diversification of our customer base setting the brand up for long-term success the strength of our strategy is also clear in europe middle East and Africa. Net sales reached 207.1 million Swiss francs, growing 25.6 percent at constant currency and 22.8 percent on a reported basis. This marks the sixth consecutive quarter of more than 25 percent constant currency growth in the region. The performance was again broad-based, with more countries contributing to the growth. The UK, a market with a strong taste-making sneaker community as well as engaged runner base, showed strong momentum. Germany continued to sustain very healthy growth. The regional performance is even more impressive considering the current geopolitical situation in the Middle East. Further evidence of the broad-based success and resilience of the region. Asia-Pacific continued its rapid, controlled expansion. Net sales reached 174 million Swiss francs, growing 61.4% at constant currency and 44.4% on a reported basis. For the first time, the region exceeded 20% of our overall business. Growth remained balanced across sub-regions and channels. greater china grew well above the regional average in addition i would particularly like to highlight south korea where net sales more than tripled year over year we grow our markets with conviction after opening two mall-based stores in seoul in q4 last year we opened our first standalone location in hanam one of the cities sought after and affluent shopping districts for consumers in their 20s and 30s. The store is already driving strong results, performing significantly ahead of expectations. Across broader categories, it's inspiring to see how we further earn our place across more moments in our fans' lives, from toe to head. Net sales from shoes reached 763.7 million Swiss francs, increasing 24% at constant currency and 12.2% on a reported basis. We are very happy to see the majority of growth continue to come from our blockbuster franchises while adding meaningful volumes from newer franchises. The Cloud Zone, for example, which launched in early 2025, grew by over 350% in volume from a low base. performance running maintained excellent momentum with a strong contribution from the cloud monster franchise the positive feedback of cloud monster 3 and cloud monster hyper is evident in the financial performance and we look forward to both gaining further momentum in q2 and beyond outside of performance running the cloud tilt remix further elevated the already exceptional performance of the cloud tilt franchise strengthening our position in a lifestyle context apparel continues to be an increasingly important entry point into the brand net sales reached 55.3 million swiss francs growing 57.5 percent at constant currency and 45.1 percent on a reported basis the value of customers acquired through apparel continues to strengthen with successive improvements in cross-category purchase rates and time to repeat purchase growth was particularly strong in direct to consumer with apparel contributing more than 10 of our d2c cells for the first time proof that apparel is one great example for a new driver of growth turning to profitability As mentioned before, our premium market position not only allows us to drive continued strong top-line growth, but to drive strong profitability as well. In Q1, this means a record cross-profit and adjusted EBITDA margin. Despite significant investments into performance of our products, our ASB strengths combined with new levels of operational excellence allowed us to deliver a further step change in gross profit margin despite the increasing headwind from higher U.S. tariffs. In the first quarter, gross profit margin reached 64.2%, up from 59.9% in the prior year period, an increase of more than four percentage points. This increase isn't a one-time peak. It is driven by the fundamentals of the brand and our business model. And we consider this new level as our new baseline for the year, as you will hear later by Casper. Economies of scale and operational efficiency are also visible within SG&A. Distribution expenses declined by one percentage point year a year to 10% of net sales, mainly driven by the ongoing automation of our global warehouses. G&A reached 16% of net sales, the lowest level in two years. We saw meaningful scale gains, more than offsetting the materials for exchange advance from our Swiss franc heavy overhead cost space as has always been our philosophy we continue to reinvest efficiency gains selectively where we see the clearest long-term return this quarter that included incremental upper funnel brand building investments behind zendaya light spray innovation activations and media to reach other newer communities, helping us speak to new audience while strengthening our credibility as a pinnacle premium performance brand. This will remain our focus going forward. The result was an adjusted EBDA margin of 21%, up 450 basis points year on year, and the second highest adjusted EBDA margin in our history. while our highest margin in q3 25 was supported by some one-off effects this quarter is an exceptional reflection of the underlying strength of our premium strategy in action turning to the balance sheet capital expenditures were 23.6 million swiss francs representing 2.8 percent of net sales increasing from 1.7 percent recorded in prior year as we continue to invest in our stores and store expansion over the last years we have invested a lot of time and resources to shorten our development time and to further improve our planning efficiency both important backbones for our premium strategy driving the higher inventory turns and improved stock health we see today our cash position remains stable compared to year-end continuing to exceed 1 billion swiss francs now my final thanks are to you our investors and analyst community I am extremely grateful for the thoughtful conversations and perspectives you have shared with us over the years. The positive ones, but especially the challenging ones, have made us a better and stronger company. Thank you for your trust, your support, and your ongoing partnership. And with that, I'm very happy to formally introduce our new CFO, Frank, who will share some initial reflections. Frank is joining a company that is operating from a position of great strength. And I have total confidence in his ability to help David and Casper build upon this momentum and lead on into its next era of global scale. Thank you, Martin, and hello, everyone.

It is a real privilege to join on at such an exciting moment in the company's journey. Although this is only my second week officially in the role, I have already had the opportunity to spend a few weeks with teams across the business. I wanted to listen, learn, and get close to the company quickly to understand the culture, strategy, and the opportunities ahead. One moment that really stayed with me was the recent Global Summit. Seeing teams from around the world come together with such energy ambition, and belief made very clear what makes ON special and why I was so drawn to be part of it. This is a company with great culture, inspiring purpose, and clarity of vision. Having seen the product pipeline, I'm struck by the level of innovation and ambition in this company and look forward with great confidence to the future. Mark and the team have built an exceptional financial foundation. My focus is to build on that foundation to support ON's long-term growth, preserve the premium economics of the brand and help the company scale with the same agility and entrepreneurial energy that have made it so successful. I'm especially looking forward to being a close business partner to David, Casper, Olivier, Scott, and the wider leadership team as we capture the opportunity ahead with ambition, discipline, and a clear focus on long-term value creation.

I also look forward to engaging with all of you in the financial community and continuing the strong dialogue that Martin and her team have built with such care over many many years with that i will end it to casper for the outlook thank you frank we are so pleased to have you on board as we looked for the right next financial leader for on we were struck by your drive your passion for the brand your alignment with our values and your experience in global consumer companies operating at a far greater scale than we are today and of course running Subsidy Merit Sense also played a part. I know you will be a strong strategic partner to me, David, our board, and our entire leadership team. Q1 was a clear proof point of our premium strategy in action. High-quality growth, record first-quarter revenue and margins, and continued investment into the areas that will define our next chapter. product innovation brand awareness and relevance retail and our communities as we look ahead our confidence is extremely high in running feedback on surreal our upcoming superform innovation launching with cloud server 3 has been excellent with exceptional demand also for the new cloud runner max in all regions our partners are working with strong conviction In rather speciality in particular, order books are up over 25% year over year. Light Spray remains at the beginning of its commercial journey, but the early proof points with the Light Spray CloudMonster 3 Hyper give a strong conviction in its potential as a pinnacle innovation product for a broad consumer base. This month, we will also bring Light Spray into our ongoing collaboration with Lueve, a powerful expression of how our most advanced performance technology can live at the highest end of premium design. The recent Zendaya co-created apparel range launched alongside the cloud Nova Moon is driving very high engagement and strong sell-through. The response to the cloud to the remix and early feedback on upcoming launches later this year, including the Cloud Zone 99, give us even greater confidence that sneak communities will form an increasingly meaningful driver of reach, cultural relevance, and premium growth. In retail, we are scaling with discipline and increasing confidence. Our stores are true brand roads, bringing our product communities and premium positioning to life in a way no other channel can. Apparel and merchandising is elevating consumer experience and contributing to exceptional store kpis upcoming openings in san francisco stockholm and sao paulo are strong examples of how we are bringing the brand closer to important communities in highly selective premium locations the pace of innovation in apparel is also accelerating as part of our focus on building deeper relevance with her we launched and are expanding sense tech into our studio and training collections bringing in our feel nothing to feel everything experience to buttery soft smooth materials designed for movement and we will build on this again for fall winter with form tech a new fabric innovation that brings more sculpting and shaping into our tides lineup together these proof points give us confidence even against an unpredictable macroeconomic backdrop to reiterate our constant currency net sales growth guidance for the year of at least 23 percent. Within that, we continue to expect T2C, APEC, and Apparel to outperform. True to our Swiss roots, we value continuity and reliability. Part of that approach is that our guidance philosophy remains unchanged. we are not pursuing growth at any cost we are building premium high quality growth rooted in brand desirability product innovation channel discipline and the long-term value creation based on current spot rates this growth translates to reported net sales of 3.51 billion swiss francs On gross margin, we now expect a full year level of at least 64.5%, maturely ahead of 2025, despite the additional impact from tariffs. This is an exceptional level of profitability and one of the clearest proof points of the structural strength of our premium model and our excellence in operation. Importantly, this outlook assumes 20% incremental tariff rates from Vietnam and excludes any potential refunds the strength of this gross profit allows us to invest into our biggest long-term opportunities absorb external pressure and still expand profitability we now expect an adjusted EBITDA margin in the range of 19.5% to 20% meaningfully above our prior guidance with that we're ready to take your questions operator please open the line for q a thank you we are now opening the

floor for question and answer session if you'd like to ask a question please press star followed by one on your telephone keypad kindly limit your question to one question and one follow-up your first question comes from the line of aubrey tianelia of bnp pariba your line is now open Hey, thanks for taking the questions.

First, a thank you to Martin for all the help over the years. Question for Casper and David. Can you share more about the division of responsibilities between the two of you going forward? And I know you've both been active throughout the years through Ann's journey. Could you maybe share more about some of the initiatives you've worked on over the years in your prior roles? Thanks.

Thank you, Aubrey. Good to hear your voice. look this management transition is really in the spirit of continuity so we've worked very closely for 13 years now in the last year we spent a lot of time together with Martin and the senior leadership team on developing the strategy that we're going to share with you and the investor day and so nothing changes in how we approach the business and nothing changes in how we guide and nothing changes about the confidence that we have in the outlook just wanted to get that you know make that very clear on the call so when it comes to how we divide and conquer um there are basically two levels on the strategic levels we've been both driving some of the building blocks that we're now really seeing come to fruition be the retail expansion being apparel being light spray and there we will continue the division of labor that we have before when it comes to really operating together with the team frank our new cfo will report to the both of us and so will scott as president ceo so we'll be helping them executing the the strategy with their teams your next question comes from the line of rick patel of raymond james your line is now open uh thank you and congratulations martin on all your success

wishing you the best going forward here um i was hoping we can double click on the trends in the U.S. business. Just given the geopolitical development since the last call, how should we think about demand quarter to date, and how have your expectations for this market changed for the rest of this year versus three months ago?

Very happy to give you some color. I will say start with the overall picture, and then David will double down a bit on the D2C part of the Americas. Overall, we're extremely happy with what we're seeing in the U.S. We feel this is a very strong quarter for us. What's making us very optimistic is that for the first time in the U.S., awareness crossed the 30 percent threshold. It also shows that we still have a long way to go in terms of growth, but what we're really seeing and what we're particularly excited about is that we're not just repeating our running customers, but we're actually reaching new audiences. and this quarter we saw a real uptick in younger audiences and rescuing more female we spoke on the call to the Zendaya collection we saw to the success that we're seeing with Cloud Tilt and Cloud Tilt Remix and Foot Locker and JD and other channels like that so that we look at that as confirmation that we have growth pillars ahead there. There's also no change in how we are going to build the Americas, the business in the Americas so premium execution will always come first when we look at wholesale an area where i'm i've always been very hands-on involved even with our largest partners we still have a lot of room to expand we're only about half of the doors and we're further penetrating those stores and in the categories that we are which is now a lot more than just running we have a fantastic training business we're starting to You see real good traction with apparel. Tennis is interesting. And then, of course, the lifestyle side of that. And then maybe I want to hand over to you, David, because you've been very closely involved with the D2C part of the Americas.

So we continue to be on a global level, very, very excited about the D2C expansion. I mean, just the growth of 28.7% is even faster than our wholesale expansion. and we have been very consistent in saying that we want to increase D2C share by 100 to 200 basis points per year and that also remains our expectation for the full year 26. Currently we are at 38.7 percent in D2C share so it's really exciting where we are and then when it comes to So the individual channels, I think in e-commerce, we really see a very, very healthy growth. So that it's full price growth, that we have a very, very strong demand. We feel that in a very disciplined way. And so you see that, of course, also reflected in the margin profile that we communicated in the call. and the new consumers based on the whole energy that Casper mentioned around Zendaya and Sneaker that coming into that channel with high demand. Of course, also then in our retail channel, we see a lot of energy also behind apparel. The D2C channel as a whole crossed now over 10% when it comes to apparel share. So you really see how the multidimensionality of the brand is building out and how apparel becomes a new entry point for the brand. So a lot of these young consumers that are coming to our e-com, that are coming to our store, are actually apparel first consumers, which is amazing. And we're sure that they're going to expand to footwear as well. So it builds that out. So we're truly very excited about how this expands.

Maybe adding a few more points from my side, and obviously, Albrecht, Rick, thanks for your feedback. I think it's always important to understand that we manage the growth on a global level. And I think we have demonstrated in Q1 the quality of the growth that we have achieved that is driven by established and new markets, by established and new product categories, and then established and new communities. And we will see those newer market segments grow in size and drive a bigger share of the growth going forward. And at the same time, you heard it on the call. I mean, we bring our most exciting and innovative product pipeline to the market, and this is expected to drive strong growth in all parts of the world. And then, of course, we have a couple of areas where one is not present today, and we can dream about this. And so, of course, if we also look into the guidance, if we see an opportunity to drive more sales and more growth, then we will do this. but always if it's in line with our premium strategy and the premium delivery. And adding to the D2C insights from David. So what is embedded in our guidance is basically the same strong D2C growth rate that we have seen in the first quarter for the rest of the year. And I think this underlines the momentum and the continued demand that we expect for the brand.

Thank you very much.

Your next question comes from the line of Jay Sol of UBS. Your line is now open.

Great. Thank you so much. And, Martin, let me also add my thanks as well. Cass, my question is for you. You mentioned that the company is not about pursuing growth at any cost, and you've said that since even before the IPO. But with the management change, I think people are wondering if you're really truly still committed to being And the question is, what keeps the company able to resist the temptation to drive more sales growth by lowering prices or to do something that maybe would reduce brand equity and maybe impact the long-term, you know, long-term brand equity and the ability of the company to grow strong over the long term? Thank you.

Thank you, Jay, for giving me the opportunity to share our view on that. Hey, look, our dream is to build a company that's completely different from anything that exists. So And so from day one, we never dreamed of building the largest company, but we dreamed of building the most desirable, most beautiful, most sustainable, most performant, most innovative company. And with that also, and I think the results this quarter show that our ambition, also the most profitable. And so that will always come first. We are truly inspired by the platform that we have to continue building something that And hopefully when we look back in 10 years time, people say they have changed the game of what a sportswear brand can be. That's really what motivates us and not sheer size at any cost.

And if I can probably add to that, Jay, I think just if you see what we have built out as really future growth pillars for the brand from not just footwear, but now to apparel as well the global footprint how we're building performance and innovation but how we expand that to lifestyle as well the channel mix and how we're opening stores on a global level there are so many growth trajectories that we have that we definitely can do that in a very very premium way and you see that from product to stores to apparel and so we feel there's a defining decade actually ahead of

us and to build this very very premium brand got it thank you so much your next question comes from the line of jonathan kump of baird your line is now open yeah hi thank you um casper david i want to follow up are you willing to share a little bit more about your vision as you think forward to the 2030 roadmap you know i know it's come up on the call you've highlighted opportunity that you know really scale the brand with premium positioning here but any further thoughts as you think about um you know you know the roadmap that that you see out in the future here thank you

john look it's it's really about continuity so we have a business that works extremely well we have the growth drivers, we have the profitability drivers. We have over time always seeded new stuff and new potential growth drivers. Many of them you're very aware of, like apparel retail that we've spoken about. We see a very interesting emerging sneaker business.

We invite you all to come to Zurich in the last week of September to join us where we're going to present the new 2030 vision and plan and and you know we have a couple of surprises in in in stock for you that hopefully will convince you all that on is a growth story and a profitability story for the long run great certainly we'll look forward to that if I could ask one follow-up just specific to the quarter you know the marketing expense looked like a pretty significant investment this quarter you highlighted some of the reasons for that could you Could you share a broader outlook, how we should think about marketing and then if you think about efficiencies across the business, both from an expense standpoint, but also from a speed and innovation standpoint, what can you share on that front? Thanks again.

John Martin here. So I think this is an important part of the story and correlated to the growth. so in the end what what we have created is something like a loaded spring we shared this on the call so we have significantly increased our brand awareness and some of this awareness is still sitting outside of the premium market yet and we see this in the fact that the traffic that comes to our direct channels and also to our wholesale partners is much stronger than the net sales growth. And we have proven over and over again in the past that we can win those additional customers, that additional awareness into the premium segment and ultimately into our products by the innovation of our products, but also by the stories that we are telling. And this is why we feel this is the right moment to invest into the brand.

And our strong cross profit margin gives us all the reasons to invest into the brand and to to spin that that flywheel faster and therefore we expect that our marketing expenses for the full year will be rather somewhere between 13 and 13 and a half percent and that's backed in into the into the guidance that you that you have seen yeah then i'm happy to speak to efficiencies you know of course you know we're athletes so we reserve the right to get better every day and so um part of what you see in the in the gross profit margin is is that we're starting to unlock you know efficiency of scales um at the same time i think you asked how we're we're driving um speed um in the innovation now innovation design are actually two areas where we're starting to re-see the impact of ai where our teams have started to work with with very sophisticated tools that allow a smaller team to come up with more options we can test them virtually and ultimately drive better results either for for racing like we've seen um you know uh with with helen and in in london or to just benefit the the overall consumer like with this or surreal platform that we will be launching in the fall your next question comes from the line of anisha sherman of bernstein research your line

is now open.

Thank you so much. And let me add my best wishes to you, Martin. So looking at your 2026 guidance, it seems you're modeling a slight slowdown from Q1 into the second half. Can you give us an update on how you see the cadence of growth shaping through the year? And I know you have some pricing tailwinds in H1 that go away mid-year. Maybe you can remind us about what the other factors are shaping that cadence of growth. And then a quick follow-up on gross margin. You talked about the outperformance this quarter. There were some factors that you knew about, the FX tailwind lapping your freight accruals. What were the unanticipated? I mean, why did gross margin outperform even beyond your expectations this quarter? What was the surprise from? Thank you so much.

Thanks, Anisha. So as I shared before, what's embedded in our guidance is a continued very strong growth of our d2c channel similar to the strong growth rate that we have now seen in the in the first quarter so that implies a slower growth on on wholesale compared to that strong growth in d2c which basically ultimately leads to the continued share gain of our of our d2c business we have a lot of innovation coming early 27 and so we want to be cautious um that we start into that uh firework of innovation with a clean inventory levels in our wholesale partners and therefore um we put this into our

guidance but i said the the conviction on the d2c side supports the the the strong momentum that we are seeing yeah and let me walk you through the gross margin profile very happy to do so so um obviously on on on the top line uh the innovation that we have the premium strategy and the fuel full price discipline um ensures that you know we're selling we're selling issues at high prices and at full price um if you then go at the at the cost um we're really starting to see these measures that we've taken a year ago we start taking a year ago on the supply side take effect so that's about 250 basis points of effect right there um the uh you know the the full price i spoke about that's about 150 basis points the fx uh um tailwind is only about 100 basis points and then about 100 basis points from tariffs as well so that's that's how the gross margin delta shapes up what's important to remember as we have guided for the year we considered the the 64 and a half as our new baseline as we as we continue to unlock further efficiencies of scale and second we're not just gonna keep all the money to ourselves but we're already today reinvesting in making the product better giving it more detail making it more desirable so we can continue to drive the innovation and desirability of the product.

Very helpful. Thank you.

Our last question comes from the line of Cristina Fernandez of Telsea Advisory Group. Your line is now open.

Hi, thanks for taking my question. And I'll add my congratulations to Martin and best wishes in the future. I wanted to follow up on Anisha's questions about the guidance. You maintain your constant currency sales guidance for the year at 23% based on what you see today, either, you know, the order books for the fall, winter, or, I mean, is there anything, do you see upside to their guidance or are there things like, for example, you mentioned an increasing promotional landscape that's making you kind of cautious about the remainder of the year? Thanks.

Yeah, thank you. We feel that the 23 percent is the right aspiration for growth this year given the quality of the growth that we are seeing as i said if we see an opportunity to go faster we will go faster and we we can go faster we we of course need to consider we have a change in leadership we have a macroeconomic environment with a lot of moving pieces that's also embedded in here but as you heard there's a lot of exciting product coming we're in very early in the in the year but 23 is a very strong growth rate if it comes at the quality and the full price discipline and the strong margin profile that we are that we are currently delivering thank you that concludes our question and answer for today.

Thank you so much everyone for attending today's call. You may now disconnect. Goodbye.