On Holding's Football Entry with Mbappé and Henry Lifts Stock but Leaves Core Risks Unchanged

What happened

On Holding announced its entry into football (soccer) with global star Kylian Mbappé and legendary coach Thierry Henry as brand ambassadors, sending shares higher on September 18, 2026. The stock jump is a welcome reprieve after a rough year, but the shares remain well below their 2025 highs, reflecting persistent investor skepticism about the company's growth trajectory and margin sustainability. The move into football represents a strategic expansion beyond running and outdoor categories, potentially opening a large new addressable market and enhancing brand heat, but it also introduces new product development, marketing, and inventory risks. The news does not address the core concerns from the recent guidance reset and leadership transition, including elevated promotional intensity in wholesale channels and rising operating expenses from DTC expansion. While the football entry is a positive long-term optionality, it is too early to assess its impact on profitability, and the stock's reaction suggests the market views it as a modest positive rather than a game-changer.

Implication

Investors should treat the football announcement as a real but incremental growth option that may expand the company's total addressable market and brand relevance, particularly in Europe and global soccer markets. However, the core investment case still hinges on On's ability to deliver its FY26 guidance of at least 23% constant-currency sales growth, gross margin ≥63%, and adjusted EBITDA margin of 18.5%–19.0% amid a promotional wholesale backdrop. The football category will likely require significant upfront investment in product development, marketing, and distribution, which could pressure near-term margins and offset any revenue benefits. Until the company demonstrates that the new category can scale profitably without eroding its premium positioning, and until the leadership transition proves smooth, the risk-reward remains unattractive at current valuation multiples (P/E ~45x, EV/EBITDA ~18x). Maintain a WAIT stance and consider buying only on weakness toward the $32 attractive entry level or after evidence that the core running business is executing flawlessly; use sustained promotion increases or margin erosion as sell signals.

Thesis delta

The football entry adds a new potential growth avenue but does not alter the core investment risks that underpinned the WAIT rating: promotional intensity, margin sustainability, and leadership transition. The thesis remains centered on the company's ability to defend full-price selling while scaling DTC and absorbing opex increases, and the football venture introduces additional execution complexity. Accordingly, the rating, price targets, and catalysts are unchanged, with the football segment viewed as a long-term option rather than a near-term driver.