Earnings Call Transcript
On Holding AG (ONON)
Earnings Call Transcript - ONON Q1 2022
Operator, Operator
Good afternoon and good morning. Thank you for joining ON's earnings conference call for the first quarter of 2022. Joining me today are Caspar Coppetti, Executive Co-Chairman and Co-Founder; Martin Hoffmann, CFO and Co-CEO; and Marc Maurer, Co-CEO. Please note that the financial performance mentioned is in line with federal securities laws. The forward-looking statements we make today reflect our current expectations and beliefs, but these are subject to specific risks and uncertainties that could lead actual results to differ significantly. For a comprehensive discussion of these risks, please refer to our 20-F filed with the Securities and Exchange Commission on March 18. Additionally, this call will include certain non-IFRS financial measures such as adjusted EBITDA and adjusted EBITDA margin. While we believe these non-IFRS measures are useful for investors, they should not be viewed in isolation or as replacements for the financial information prepared in compliance with IFRS. You can find a reconciliation of the non-IFRS financial measures to the most comparable IFRS measures in today's release. Now, I will pass the call to Caspar, followed by Martin, for the prepared remarks.
Caspar Coppetti, Co-CEO
A warm welcome from my side as well. And thank you for joining our call today. We're happy to report that ON had an excellent start to the year, and that we were able to further build on the momentum from last year, with CHF 236 million of net sales, a growth of 68% versus Q1 2021. We have exceeded even our own high expectations. As anticipated, Q1 was still constrained by the supply shortages that have been affecting our industry, but our teams along the supply chain have done a phenomenal job navigating the challenges, helping us to reach yet another record quarter. Let's have a look at some of the key takeaways from this quarter. ON is winning market share at an accelerated pace, with a combination of very strong consumer demand for the ON brand and better-than-anticipated supply led to significant market share gains in our key markets. ON aims to be the number one brand on runners' feet and the accelerated pace of market share gains mean that we are making good progress towards this goal. ON's new products are resonating with customers. In spring 2022, ON has launched a number of key new running styles that are already seeing significant traction with consumers, both online and with our retail partners. In March, we introduced the Cloudmonster, which is ON's most cushioned model to date. Sales on our e-commerce platform during launch week were the second largest in history, only behind the launch of the Roger Centre Court. In April, the first consumers were able to buy the long anticipated Cloudrunner, which at US$140 offers mid-level cushioning and support and reaches a very wide audience of runners. The Zero Jacket underlines our ambition to expand our apparel business. As the name suggests, it weighs close to nothing and this is, to our knowledge, the lightest running jacket on the market today. With these and other products, such as the Cloudgo coming later this year, we expect to continue winning market share in all key markets. This quarter also saw ON's biggest launch in history, with the Cloud 5, ON's flagship product in the performance all-day category. This launch not only led to extremely strong e-commerce revenues thanks to many repeat customers, but because the Cloud 5 is made of more than 40% recycled content overall, which is an industry best, the environment also benefits. This confirms our belief that more sustainable products need to and can be applied at scale. ON sees continued strong growth across all continents and in both wholesale and B2C. One aspect that sets ON apart is that we have strong high growth multichannel businesses in the major markets of each continent. To illustrate this, I'd like to call out some examples. Our US business grew 87% versus Q1 2021. UK and Germany grew 54% and 49%, respectively, while China and Japan were up 178% and 148%. In all of these markets, we are far from majority or saturation, as many consumers are either just learning about ON or might have purchased their first piece. And those that have already purchased in 2021 are coming back to buy more, both in our own channels and with our trusted retail partners. ON is doubling down on performance technology. From the beginning, ON has been focused on delivering innovation that will drive performance for the world's best athletes. In that spirit, let us introduce you to ON's Lightning program, something that we have not spoken about publicly before. The Lightning program consists of around 20 engineers, sport scientists, material specialists, and coaches who focus on one mission only: how to make the fastest products possible and to work extremely closely with some of the most talented runners to unleash their full potential. In the past month, we have seen some very encouraging results coming from the Lightning program. In Istanbul, at the end of March, 10k world champion and On Athletics Club member Hellen Obiri toed the line for her first-ever half marathon race. On her feet was a prototype racing shoe that she had only received the day before. When she crossed the finish line, she won the race in the 10th fastest half marathon time on record, despite the conditions being far from optimal. Just two weeks later, the same prototypes helped Tadesse Abraham win the Zurich marathon with a new course record and also Swiss record. To put things into perspective, Abraham will turn 40 this summer. This goes to show that the ON labs are continuing to innovate at the highest level. And there's more to come. We are excited to announce that ON will introduce a new cushioning technology in spring 2023 called Cloudtec Phase. This evolution of ON's existing technology was generated completely by computers using advanced Finite Element Analysis simulation, a computerized method for predicting how a product reacts to real-world forces, which is pioneered in Formula One racing and by NASA, for example. We have been showing this technology to ON's retail partners over the last weeks as part of Spring 2023 sell-in, and the feedback is very encouraging. We are reaffirming ON's premium positioning through premium prices. In showcasing the spring 2023 collection, ON has also announced to our retail partners that we will adjust prices across all product ranges and geographies to reaffirm ON's premium positioning. This step builds on the selective price increases that we made in the US for 2022 Q1, which have not slowed down our strong growth in the States during this period. ON has always regarded pricing as a brand positioning tool. And we are using this opportunity to defend ON's premium positioning as other brands are also increasing prices. This puts ON in a strong position to not only absorb some of the effects of higher costs in the face of globally rising inflation, but to also reflect inflation in our own 2023 salary rounds as an important retention driver within our teams. ON is strengthening our board of directors. As a public company, we aim to constantly strengthen our team and level of professionalism. We are therefore proud that Dennis Durkin, formerly with Activision Blizzard and Microsoft, stands for election for our board of directors at the upcoming annual general meeting. If elected, Dennis will take the chair of the audit committee. Together with him and Alex Perez, ON will have a fully independent and highly experienced audit committee. If selected, the nomination and compensation committee will be further elevated with Amy Banse. We are currently also looking into opportunities to further strengthen and diversify our board over time. So, in closing, Q1 was an incredible start to the year for ON. Like a four-lap mile race, it is essential to get out of the starting block strong and with good momentum. Our teams really did that and more in Q1. We have added new products, brought on incredible team members and capabilities, and achieved new sales records. I'm really proud of the team's work, but we know we can run even faster. So, we remain fully focused on pursuing excellence and driving innovation in all parts of our business. I'll now pass the baton over to Martin to cover our financial highlights and our increased outlook for the year.
Martin Hoffmann, CFO and Co-CEO
Thank you, Caspar. Net sales for the first quarter reached CHF 235.7 million, representing a remarkable growth of 67.9% that exceeded our expectations. This success reflects not only financial achievement but also the strong global demand for the ON brand and the exceptional efforts of our entire team in overcoming challenges from the supply chain and factory closures last year. We managed to efficiently air-freight the right products to the right warehouses and effectively handle our order book. This performance showcases the flexibility and support we've received from our retail partners and direct-to-consumer customers, and we are extremely grateful and proud. Despite these impressive numbers, our supply shortages still constrained our ability to meet demand, and the gap between demand and supply for some products widened during the quarter due to positive feedback from our fans. Nonetheless, we managed to deliver more new products to our customers than expected, making Q1 2022 the strongest quarter in ON's history. In March, we achieved our highest monthly net sales and shipped over 1 million pairs of shoes in a single month for the first time. Both our hotel and direct-to-consumer channels experienced the same robust growth rate of 68%. We have permanently shifted the launch of our spring/summer footwear collection to Q1, contributing to wholesale growth after a slight dip in Q4 2021. When combining Q4 and Q1, our wholesale channel grew by 54.5% year-over-year. Our direct-to-consumer share in Q1 remained high at 35.4%, despite ongoing lockdowns, particularly in Germany, Austria, and Switzerland. In North America and China, direct-to-consumer continued to outpace wholesale. We also expanded our retail presence, notably with our new flagship store in Tokyo, which has attracted significant interest since its opening. Sales on opening weekend were comparable to a very strong day in our New York City store, despite typical challenges associated with new store openings. In addition, our Tokyo store achieved an apparel share of around 20%, similar to our performance in China, which is significantly above our overall apparel share and signals growth opportunities in apparel globally. Examining our net sales by region, we saw strong growth across the board. After a softer Q4, Europe rebounded with net sales growing by 31.3% to CHF 74.9 million. North America continued to outperform the group with a remarkable 86.5% increase in net sales to CHF 138.4 million. Asia Pacific more than doubled year-over-year with net sales of CHF 16.4 million, growing 125.9%. Both China and Japan showed strong growth, although recent COVID lockdowns in China caused stock losses, which we anticipate will create additional challenges in Q2. Significant growth of 219.2% in the rest of the world highlights our potential for expansion outside Europe, North America, and Asia-Pacific. Starting with fall/winter 2022, we will broaden our presence in Latin America to include most countries, with distribution through new partners in all but Brazil. In Q1, we launched several key products, including the Cloud, Cloudmonster, Cloudrunner, and Cloudvista. We also saw impressive growth in popular running styles like the Cloudflow and Cloudflyer, as well as in our all-day performance lines like the Cloudnova. Overall, net sales from shoes increased 69% to CHF 222.5 million, while apparel sales grew 44.9% to CHF 11.4 million. Compared to Q1 2021, we had fewer new product launches and concentrated our branding on new footwear offerings. Sales continued to expand in key accounts globally, and with more new products coming in Q2, we expect strong growth rates in apparel as we connect better with our loyal customer base. We plan to launch a second limited collection in partnership with Loewe later this year, following the success of the first drop. Accessories saw considerable growth, with over 120,000 socks and 20,000 caps sold in Q1, reflecting a year-over-year growth of 111.8%. In terms of gross profit for Q1, we reported CHF 122.1 million compared to CHF 80.8 million in the previous year. As anticipated, due to our strategic air freight decisions to secure product availability amid ongoing demand and factory challenges, our gross profit margin decreased from 57.6% to 51.8%. Without the implications of air freight costs, we would have approached our long-term gross profit margin guidance of 60%. We continued to invest across the business while maintaining profitability despite significant air freight expenses. Excluding share-based compensation, SG&A expenses as a percentage of net sales were 49.1%, compared to 47.2% last year. During Q1, we welcomed 185 new team members, further supporting our brand building and sports marketing efforts. Our presence as the official sports and footwear partner at the Penn Relays was a highlight for us. Our post-COVID travel has increased, allowing us to reconnect personally with our customers and partners. With China and Brazil now live in our new ERP system, we successfully standardized our global business processes on a robust IT platform, positioning ourselves for further innovation and enhanced customer engagement through our intelligent data strategies. Regarding share-based compensation, Q1 expenses dropped to CHF 3 million from CHF 25.5 million in the prior year, due to most of last year's grants vesting in Q4, while new awards are expected in Q4 2022. Despite the air freight investments and controlled SG&A expenses, we achieved a positive adjusted EBITDA of CHF 15.7 million for Q1, down slightly from CHF 19.9 million last year. The adjusted EBITDA margin decreased from 14.2% to 6.7%, but excluding air freight costs, we would have maintained a margin above last year's level. In our balance sheet, we reported capital expenditures of CHF 16.3 million, representing 6.9% of net sales, driven by investments in IT infrastructure and retail stores, including our new offices in Portland and Zurich. We ended the quarter with CHF 600.4 million in net cash, down from CHF 653.1 million at the end of 2021, primarily due to an increase in net working capital needed for our high-growth business. Looking ahead, we are energized by our recent global meeting where we unveiled our spring/summer 2023 products. This was the first time since November 2019 that our entire team came together in person, and the enthusiasm was palpable, which we believe will resonate with our retailers in the upcoming season. As Caspar noted, we are just getting started in 2022 and are eager for what lies ahead, including innovations in sustainability with the Cloudneo being shipped out as part of our Cyclon program soon. Many athletes will also be competing in ON gear this summer, alongside exciting new products like the Cloudgo and expanded apparel offerings as we pursue our goal of becoming the top brand for runners. While our global teams are returning to the office, our colleagues in China, especially in Shanghai, are currently facing challenges due to the COVID situation there. Even though local business has been significantly impacted, we anticipate that the overall effect on our financials will be limited due to China's relatively small contribution to net sales. The warehouse has been closed, preventing us from shipping to wholesale partners and our own stores, but we have been cleared to resume operations soon. Although four stores in Shanghai and one in Beijing are closed, most other locations have remained open, albeit affected by inventory shortages. Some of our new retail openings may also be delayed due to travel restrictions. Importantly, we have not seen any production impact, as our factories are located outside the affected areas. We believe that the strong Q1 results set us up well to achieve our growth goals for 2022. With successful new product launches, positive retail feedback, a robust supply chain, and the passion of our team, we are in a strong position today. In light of the current economic climate, macro uncertainties, and the situation in China, we feel confident in our ability to execute and have decided to raise our outlook for 2022. We now project net sales to reach at least CHF 1.04 billion, reflecting a 44% growth for the year and increasing our previous guidance by CHF 50 million. We are proud to be on the verge of crossing the CHF 1 billion sales milestone and are motivated to serve even more customers. Our internal ambitions remain even higher. As previously stated, we will continue using air freight in Q2 to balance inventory levels. We expect a gross margin impact in the first half of 2022 to be between 700 to 800 basis points, anticipating a more moderate margin impact in Q2 than in Q1. The anticipated growth in net sales will support further investments in the brand and team, enabling us to raise our full-year adjusted EBITDA target to CHF 137 million, alongside an adjusted EBITDA margin goal of 13.2%. Higher net sales are expected to drive greater overall profitability, positively affecting both our top and bottom lines. Our team has done remarkable work under challenging circumstances, delivering results that exceeded our expectations. I want to express my gratitude for the dedication and passion that everyone contributes toward our shared goals. It is truly inspiring to work with this team, and I look forward to welcoming everyone to our new ON offices in Zurich this June. In summary, Q1 was an excellent beginning for the year, and we are eager for the challenges and achievements that await us in 2022. We remain committed to innovation, disruption, top-tier execution, and building a remarkable team.
Jonathan Komp, Analyst
I want to start by following up on the point you made about accelerating market share. And I'm curious what you think are the main drivers when you look at the business and some of the improvements in brand awareness, the product innovation, the internal execution, or any other factors that you think are the biggest drivers of the market share trends you're seeing?
Caspar Coppetti, Co-CEO
We understand this market well. It's influenced by several factors. Firstly, we're gaining traction in key regions. In 2021, many consumers likely encountered ON for the first time, either through the IPO or through someone who owns a pair. They might be purchasing a second pair and sharing their experiences with friends. This indicates a grassroots movement in brand adoption. Additionally, ON now offers more products that compete with the top-selling styles from other brands. The combination of providing a relevant product and fostering brand interest is very powerful. Our increase in market share primarily comes from deeper engagement in our current channels and expanding our presence there.
Jonathan Komp, Analyst
When you look at the initiatives that you have in the pipeline, what gets you most excited about the ability to keep driving the performance you're seeing?
Caspar Coppetti, Co-CEO
We have introduced new products, including the Monster, Runner, and Vista, which are performing exceptionally well and attracting more consumers. We're also launching the Cloudgo and relaunching the Cloudflyer this summer. Additionally, we're adding a mid-top version and enhancements to the Nova, resulting in a strong product lineup. Sustainability is a crucial focus for us and our consumers, and we're increasing the use of recycled materials across all our products, which is resonating well with them. Moreover, we're expanding our distribution channels across various regions. Our Lightning initiative has also improved our performance, allowing consumers to discover our offerings more effectively. We are excited about the numerous elements coming together in terms of product, brand, and distribution, which sets a promising outlook for the next 6 to 12 months.
Jonathan Komp, Analyst
Just one last one for Martin. If I could follow up on the gross margin performance, it looks like you offset a fair amount of the freight pressure that you saw in the first quarter, maybe 200 basis points or more. I'm curious what drove some of the positive offsets to the freight? And then, when you think about the path back to the long-term target of 60% gross margin, how should we think about the timing to get there, especially given some of the comments Caspar made about pricing and using that as a strategic lever?
Martin Hoffmann, CFO and Co-CEO
I think we spent exactly what we were planning to spend on airfreight. But we were much more efficient, and this is really thanks to the team that has done this great job in converting the product that we flew directly into sales and really bringing the right products into the right warehouse at the right time. This has led to a higher net sales number than we had expected. Therefore, you see that, in the end, this relative impact from the airfreight is lower than what we had based on the lower revenue number. So, for the second quarter, we will still fly, but it will be a less absolute amount, and therefore, the impact will be lower. As of the third quarter, we will be able to come down to a normal air freight share that we have also seen in the past. It's very important that the impact that we have seen on gross margin is coming from airfreight. If we take this out, we would have been at about 60%, and in line with our long-term goal. The price increases that Caspar mentioned will position us to respond to potential increases we may see on the supply chain, on sourcing, and also in our costs, as well as our salary side, which, of course, is super important.
Cristina Fernández, Analyst
I wanted to follow up on the upside in the first quarter to sales and your comments about being able to deliver more products. So, is it fair to say that perhaps on the wholesale side or maybe on both channels, there was a little bit of a pull forward to the first quarter from the second quarter relative to your prior expectations?
Martin Hoffmann, CFO and Co-CEO
There's very little timing effects in here. But the majority of the upside really comes from the ability to work with our retail partners in order to ship the product that we had in the warehouse and then also plan very efficiently what products we are flying. We've also seen, especially with the Cloud where we launched the new Cloud 5, that we were able to continue selling a lot of the Cloud 3. We kept it at full price also on our website, which added to the Cloud 5 sales. Therefore, in total, we're able to convert more of the demand into actual sales.
Cristina Fernández, Analyst
As a follow-up, any change in consumer sentiment or anything you can point out by region, if you look at sort of demand in Europe versus the US based on the macro conditions to what you had seen on the last call.
Martin Hoffmann, CFO and Co-CEO
We don't really observe that also when we're looking into the preorders for spring/summer 2023 that we're writing right now. I think we're also playing in a category that is very resilient. It's about movement. That definitely helps us. Again, you're not in the incremental game of plus/minus a few percentages. We really feel that we can continue to gain market share. The brands that have the strongest demand are in the best position over the next two to three years, and that's what we're observing. I also want to point out that, for example, in a market like Japan, where we had a little bit slower growth rates over the last two years, we're seeing that with the store opening that we had with additional investments in the brand, now posting 148% growth, shows that this consumer sentiment is global and it's not bound to one specific market.
Michael Benetti, Analyst
Congratulations on a great quarter. I understand that you don't focus heavily on the first quarter, particularly because of the issues in Vietnam. I have a couple of questions. Regarding gross margin, I believe you mentioned it’s at 60% right now, not accounting for the freight challenges, which aligns with your long-term goal. Does this indicate that the underlying margins in your businesses are now equal to what you anticipated? It seems that there should still be some advantages related to channel mix moving forward. Or do you think it's worth reevaluating that long-term target as you manage the current freight situation?
Caspar Coppetti, Co-CEO
I feel that the 60% is still the right number to look at. I think we all need to learn how inflation will play into this. As mentioned, I think we take this very proactively by adjusting the prices, so we will be in a position to digest higher costs with all the negative margin impact, which I think is super important. Then I think we need to monitor the freight costs post-shipping and ocean and air freight and see where this goes. If there's a slowdown in economy, the rates may become better. Otherwise, they may stay where they are. We feel there are many uncertainties. So, the 60% is something that we have proven is realistic in a non-challenged environment. But I wouldn't go higher at the moment. If I could follow that, I guess, on the OpEx or SG&A plan for the year, maybe how that's changed since the last update. I think you said gross margin beat by about 800 basis points of air freight. You said in the prepared remarks that you reinvested some of the revenue upside in 1Q, but commented that the rest of the year maybe you would flow through more of the upside at a higher rate to EBITDA. If I got that right, can you speak to what you reinvested in 1Q and why not continue to plow back any upside through the year given strong long-term growth opportunities that we're seeing quarter to quarter here?
Martin Hoffmann, CFO and Co-CEO
What you see in the numbers is that we very cautiously managed our cost side in order to digest part of the additional airfreight to achieve a positive EBITDA, which was incredibly important for us. But at the same time, we continued investing into the business, so we didn't slow down on hiring. We were talking about travel, investing in IT, completing our ERP project, and strengthening our distribution network. If you look at the marketing line with 12%, this is certainly where we would see additional investments if we overachieve and then be able to achieve higher net sales than where we currently guide. In strategic fields of the business, especially on hiring the right talent, to maintain the growth and secure the growth in the future has not slowed down and penalized by the airfreight.
Jim Duffy, Analyst
Great quarter. Demand strength very evident in the numbers. Guys, the inventory is still super tight, however. Can you speak more about plans to scale capacity? Are there any notable bottlenecks to growth through the remainder of 2022? Are you seeing any impact of material or components supply resulting from the China lockdowns? And then also, could you speak about plans to scale capacity into 2023 to both ensure supply, but also manage risk?
Caspar Coppetti, Co-CEO
Let's start with basically the material situation. What we've done over the last years is that we are dual sourcing all major materials and we've localized it. So, we basically have one material supplier that is in China. We're not expecting – and that's not a huge one. So, we're not seeing a negative impact from that and we're quite confident on that. On the capacity side, over the last years, we've invested a lot in building capacity with our key partners. I was just in Vietnam where we opened a new factory that has the capability to produce certain million pairs a year and it's going to go live next spring. So, we're very confident about the capacity situation for apparel and footwear for the next years to come. As you know, we're working with some of the biggest partners, like Dean Shoes or Huali. The results that you're seeing now in Q1 also is a testament to how much they believe in ON and how they're prioritizing ON because they feel we can build something very big in the long term. To add to Martin's point, on the freight side, we're seeing that a lot of capacity has been built and is being built because demand was very strong. Now, with some recession potentially looming in the US, we'll see how that impacts the whole industry. So, I'm not worried with ON. We feel that ON is a very strong brand and again, we feel that we can gain a lot of market share and we're very confident that there is enough capacity available.
Jay Sole, Analyst
I want to ask about the 87% growth in North America. Obviously, tremendous growth. Can you maybe just talk to where you're seeing that growth come from? Is it new retail partners? Is it more doors with your existing partners, more shelf space with your existing retail partners, or talk a little bit about how you're seeing the DTC business develop in North America?
Caspar Coppetti, Co-CEO
Good news is coming from everywhere. So, let me give you a few examples. B2C grew very strong, over-proportionally in the US. It was a very strong quarter. I think what is especially important for us, it was a successful quarter at very high efficiency, so we didn't need to spend a lot of money to get that volume, which speaks to the brand strength. We had higher roll-offs than we had last year on the B2C side. When you look at retail, yes, we're increasing market share in existing channels. For example, in Fleet Feet, we had 8% market share by the end of last year, and now we're standing at 13%. This is existing door growth, but we also added doors. We spoke about Footlocker, we spoke about JD, and basically, we're at 94 JD doors now, we are 68 Footlocker doors. So, that's additional doors that we're adding and the product is resonating with consumers. The sell-through is very strong. So we really across the board, across all channels, very, very positive momentum.
Alexandra Straton, Analyst
This is Alex Straton on for Kimberly Greenberger. Thanks so much for taking the question. I just want to touch on inventory quickly. How do you guys feel about the current levels and the composition? Do you anticipate normalization still sometime in the back half? And then, just finally, how are you prioritizing distribution against some of the constraints that you still have?
Caspar Coppetti, Co-CEO
A couple of things on the inventory side. We feel very confident with – it's a big question of, do you have the right products at the right place, right, which was a key ingredient for our Q1. We were able to actually foresee the product that is really resonating with the consumer. We feel very confident about that. Especially in Europe now, we will have more product available for Q2, we have good availability in the US for Q2. Some additional airfreight will be needed but on a very different level than in Q1. What's a little bit unknown or where everyone still faces some difficulties is that there's lots of port contraction still happening, and there's a lot of inventory on sea that is not in the warehouses. It's hard to exactly maneuver the inventory to the minute, which makes it then hard to deliver the product exactly on time to the retailer. Sometimes you'll see shifts between months and potentially between quarters as containers are going in and out.
Marc Maurer, Co-CEO
Kimberly, to your question of how do we prioritize whom we ship, of course, we have a very strong B2C business. They're excellent at forecasting because they see, of course, what is selling through, and so we try to make that available. And then, it's really by the quality of the account. By that, we mean, which consumers do they serve? You want the right product to show up in the right channel. That's been a big focus. We're seeing less of it now, but there was definitely a time when retailers tried to hoard inventory. We were very strict about aligning what they can sell with what we ship to them.
Grace Smalley, Analyst
I think you referenced earlier that the category is sort of relatively more resilient in an inflationary environment. Are there any specifics about ON consumer demographics and price points that you think might make ON relatively more resilient to some of the other brands in the category? Or how do you think about that?
Caspar Coppetti, Co-CEO
In the 12 years of ON, we've seen a crisis or two in different markets. Generally speaking, the sporting goods category, and especially running that is not dependent on a lot of equipment and availability of gyms and so on, usually gains in those crises, as you've probably seen from earlier crises. We also have to acknowledge that ON is a premium brand within the category. We're maybe 10%, 15% over our competitors. We're not a luxury product, so we feel that even if consumer spending or disposable income would go down, we would still be in a good position because people would probably defer a car purchase or a vacation over deferring buying something like a running product. We're not overly concerned, but as Marc said earlier, we also see this as an opportunity because when people have to make more considerate choices, they consider which brands to buy. Typically, our history has shown that the ones that are most desirable will win most.
Marc Maurer, Co-CEO
Grace, maybe adding one point. We were speaking now a lot about the Cloudrun and the Cloudgo. So, two products that we are now bringing to market or have just launched that are at the lower end of our price points of US$140. They also give the more price-sensitive customer a choice to buy an ON product and experience the technology of the brand. So, probably the right product at the right time there.
John Stansel, Analyst
I was hoping to get a bit of an update on wholesale door expansion in 2022 versus the last call. How are you seeing that track? I know you mentioned JD and Footlocker expanding. And then, a little bit broader than that, as you think kind of longer term, how do you see wholesale door expansion changing by geography?
Caspar Coppetti, Co-CEO
We're trying to have a very consistent strategy over a long period of time. The answer is going to be very similar to three months ago. Again, we are opening doors in consumer segments where we feel we can gain additional share. So, this is the Footlocker and JD discussion. I can give you some numbers where we approximately feel we want to be by the end of the year. So, in Footlocker, we're talking about roughly 130 doors globally. In JD, we talk about roughly 150 doors globally. I spoke about the 68 to 94 where we are right now. This gives you a bit of a feeling for it. As such, we're opening with December and the first test doors. This is especially to JD and Footlocker, going into new consumer segments than within our more the run segment that we have been in in the past, it's definitely very much also a geographical gain. So, lots of countries like France, the UK, Italy, and we're on it. It's still at a very early stage. What we're seeing is that if we're able to bring apparel to life in the best possible way, which means we need to shop in-shop and we need to work with partners that understand how to sell apparel, it's doing really well. Really well means, for us, it has roughly a 20% to 30% share in that store as part of the ON range. That's definitely a focus for us.
Tom Nikic, Analyst
I just wanted to ask about the shape of the revenue growth for the rest of the year. I think you're just up 68%. The full-year guide would suggest you'd be in high 30s for the rest of the year. Is there anything constraining revenues in Q2 or how do we think about your Q2 growth versus the second half of the year?
Martin Hoffmann, CFO and Co-CEO
If you look at Q1, at the 68%, especially in wholesale, I mentioned on the call that if you combine Q4 and Q1 together, we had 54%. This eliminates the impact that we have seen from shifting our start of the spring/summer season from November basically to January. So, 68% in wholesale is not the like-for-like jump off base. In Q2, on top of what Marc mentioned, we expect that we are still seeing supply constraints on some products, but we are much better positioned than in the first quarter. But it's still there. We have the situation in China that we were mentioning, and we want to follow our philosophy of providing a prudent outlook. We stated that our aspiration is higher than that. At the same time, we also want to take into consideration the macroeconomic environment and the uncertainties there to protect our profitability. All of this together is put into the full-year guidance that we have given.
Operator, Operator
There are no further questions at this time. Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.