Press star 1 again. I will now hand the conference over to Liv Radlinger, head of investor relations. Liv, please go ahead.

Good afternoon and good morning to our investor community. Thank you for joining ONZ third quarter earnings conference call and webcast. With me today on the call are Caspar Coppetti, founder and co-CEO, and Frank Sluis, CFO. David Allemann, founder and co-CEO, will 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 20F 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 IFRS accounting standards. Please refer to today's release for a reconciliation to the most comparable IFRS measures. We will begin with Caspar, followed by Frank, leading through today's prepared remarks, after which we are looking forward to opening the call for the Q&A session. With that, I am very happy to turn the call over to Caspar.

Thank you, and a very warm welcome to everyone from Zurich. Seven weeks ago, we were thrilled to host so many of you here with us for our second Invest Today. You walked through our lab, our makerspace, and our phone competence center. You watched a light spray opera come together in minutes, saw the design-led vision that will take our apparel business to the next level, and got a first look behind the curtain at our plans for new sports. No slide deck and no earnings call can ever bring ON's culture of innovation to life quite like being here. We're grateful to those of you who made the trip. On that stage, we made a clear commitment for the next three years. to redefine what a sportswear brand can be by running the On Premium Playbook. We aim to grow faster than our industry and grow earnings even faster than sales with the goal of making On the high-quality earnings compounder in our industry. Today, we report the first quarter of that plan and we are thrilled with the progress that we are making. Net sales in the quarter grew close to 18% at constant currency to a record 931 million Swiss francs, ahead of the latest expectation we provided you in September. And the first time we have crossed 900 million Swiss francs in a single quarter. That is more than four times the size of the quarter in which we went public five years ago. At the same time, our underlying gross margin and adjusted EBITDA margin reached the highest levels in our history. That is the on-premium playbook doing exactly what it was built to do. Gross and margin together. And not or. We deliver these results in what remains a highly promotional environment by staying true to who we are. That means leading with innovation, design, and resonant storytelling, giving our fans a unique offering that they do not find elsewhere. In a high discount environment, there will always be some consumer choices based on price. It has never been our strategy to go for these. And in such an environment, we are just as committed to premium as our highest principle. We are incredibly proud of what we have delivered this quarter, with our new technologies and styles selling strongly at full price. This strategy is what allows us to reach record profitability while investing meaningfully in the three years ahead. in the technology they will run on at the scale of our 2029 ambitions and behind football and golf ahead of their launches next year. Much of that investment lands in the second half of this year, and it is exactly what sets us up to deliver 2027 and beyond. Now, let me show you how the On Premium Playbook came to life in Q3 through the three strategic growth engines we set out in Zurich. Performance led by Run, Lifestyle led by Sneaker, and Aperol, led by her. In performance, we lead with run. And in this quarter, the biggest innovation cycle in our history got off to a flying start, proving once again that running remains our origin and our core. In Zurich, Scott told you about a day he and I spent in a run specialist store in the US, watching runners pick up our shoes and put them down again. We brought what we saw home, put every function around it, and built the shoe in record time. The first masterpiece of our new sensation-based franchise architecture, introducing on spray-through surreal superfoam combined with a new CloudTech geometry. That shoe is the CloudSurfer 3, and in October, it launched with select RON specialty partners. The early signals are exceptional. In its first week, the CloudSurfer 3 sold through at more than four times the rate the CloudSurfer 2 did in its launch week. It is already the number one model with several of our key run specialty partners, and we are pleased to see their team so invigorated by it, introducing it to their fans with fittings, group runs, and in-store events. This momentum is fully echoed by key run influencers and industry media who have praised the shoe as a premium leap forward for everyday runners. But this is only the first shoe with our surreal super form. By the end of 2027, almost all our performance running franchises will run on one of our new super critical forms. On's pinnacle product, the CloudBoom Strike 2, keeps showing the world what our innovation technology can do. Demand for the Lyspray version was six times greater than what we could produce, selling out in our US online store on launch day. Our athletes have carried it through the autumn season. A double victory in the Frankfurt Marathon was followed by a milestone in the New York City Marathon. The first time on, athletes reached the podium in both the men's and the women's race at the World Marathon Major. And in the Cloud Monster franchise, the Laced and Lyspray Hyper, the most advanced expressions, keep taking a larger share. Runners can feel the difference the technology makes for them, and they're choosing the very best of it. These successes and the generational updates coming to our core franchises through 2027 give us strong confidence in our ability to make meaningful share in teaming running, a market that continues to grow faster than the industry around it. In lifestyle, we lead with sneaker. This quarter, the Cloud Tilt was again one of the fastest growing sneaker franchises in the whole industry. And every new expression is bringing in new fans. The CloudTilt Arc launched in September and beat our plan in all three regions in its first days. In Asia Pacific, by more than four times. In Europe, the CloudTilt is fast becoming a Gen Z staple, taking significant share with this important consumer. but the story is much bigger than one franchise. The Cloud, which also featured in our football edits, continues to show strong momentum, a true Evergreen product and icon franchise. By seamlessly connecting this classic silhouette with our high-profile entry into football, we are driving significant cross-category brand heat and introducing our performance heritage to a whole new generation of lifestyle consumers. In October, two new silhouettes joined the lineup. the Cloud Nova Moon Mary Jane, created with Zendaya and already trading well above retail on resale platforms, and the sleek, lower-profile Cloud Muse, which has beaten our forecast since launch. Next year comes the Cloud Swift 5, our first sneaker designed from street coats up. The Cloud Tilt was just the start. In apparel, we lead with her. Apparel grew 38% at constant currency and we are on track with our goal to triple net sales over the next 10 years while extending our share of wallet with existing customers. Winning with her is a long game and this quarter showed exactly how we will win it. Product designed for her in environments built around her. On the training floor, we launched new train tights in Formtek, a fabric developed to sculpt and shape, and backed them with our women's training campaign, and women's share of our train collection rose meaningfully. Then in October came our latest collection with Cindea, a bold design statement in python prints, and the most visible para moment in our history, a reach of two and a half billion, close to 90% positive sentiment and top styles selling out across markets within days. Retail continues to be the engine that drives our apparel ambition. In our new generation fleet, apparel share is already at least 50% higher than in our existing stores. And apparel productivity is growing faster than footwear across the whole estate. A strong value here as we look to more than double our store apparel productivity over the three-year horizon. Her product, her moments, her store. It is early, but it is working. Beyond our three strategic growth engines, we showed you in Zurich how we are building for the decades to come with new sports. We're only weeks into their journey, but the early signals from football have been remarkable. Our announcement post became the most seen story in ON's history. And in the days that followed, e-commerce sales of our campaign products more than tripled in France, and more than doubled in Germany and Spain. That is the Hebel before we have launched a single boot. Golf follows in the first half of next year and we will build both sports deliberately. We are thrilled with everything we have seen so far and even more excited about what lies ahead. The all-fremont playbook, everywhere. That conviction ran through every channel and every region this quarter. In the Americas, the work we did with our wholesale partners over the summer, enhanced storytelling, more tech rep education, more shopping shops, paid off. Sellout strongly improved from the second quarter. Our partner's inventory is healthy and the CloudSurfer 3 has landed successfully into exactly the market we wanted. In Asia Pacific, we're building a brand that not only lasts, but is loved. That means expanding deliberately and elevating as we go. Upgrading select locations, opening in some of the most in-demand premium mall locations, and adding incredible new stores in the region's greatest cities. It means the same discipline in every channel and every market. And it means engaging our fans even more directly. through more than 1,020 events a year. Japan shows how powerful that combination can be. In one of the world's most premium and culturally influential markets, demand for ON continues to outpace supply. When our latest drop with Kith landed in September, it sold out almost immediately. The very next morning, we took it to the streets of Shibuya with a community run that reached well over a million people organically. Every decision we make is the ON premium playbook in action. Market leading growth at remarkably strong margins. That margin funds investment into the SuperFoam, the robots, the stores, and the athletes that create the next wave of demand. enabling us to keep growing at pace from a bigger base. The margin funds the innovation, the innovation earns the margin, and the loop turns again. As we said at the investor day, simple in principle, demanding in practice. Powerful because it compounds. Seven weeks into the plan, it is already compounding. Frank, please take us through the numbers.

Thank you, Caspar, and good afternoon. Good morning, everyone. This is the first quarter of the plan we set out at Outinvest today and embodies the on-premium playbook that we showed you there, growth and margin together. Net sales of 931.4 million Swiss francs, a new record. A gross margin of 66.9%, excluding tariff refunds, the highest in our history. and cash of 1.34 billion Swiss francs, up more than 300 million since the start of the year. I am very pleased to walk you through the results in more detail. Net sales grew 17.8% at constant currency and 17.2% reported. And every region, every channel and every category contributed meaningfully. Wholesale grew 13.2% at constant currency and 12.2% reported to 538.2 million Swiss francs. And this is where much of the work we did with our partners over the summer showed up. Sellout stepped up from the second quarter, including a strong back to school campaign led by our new exciting launches. In addition, several key accounts in the Americas took holiday deliveries in the final week of September that had been planned for October. business that would otherwise have landed in the fourth quarter. Through all of it, we kept selling disciplined, exactly as we said we would, and our partners are heading into the holiday season with healthy inventory levels. They can also see what is coming. The spring 27 order book has built well, and our partners are backing our innovation pipeline with real conviction. Direct-to-consumer grew 24.8% at constant currency and 25.0% reported to 393.3 million Swiss franc, almost twice the rate of wholesale, and another exceptional quarter. Our DTC share reached 42.2%, up 2.6 percentage points year over year. You know we always set an extremely high bar for ourselves, and this quarter we landed slightly below it. Throughout our markets, we held full price discipline, despite online traffic being a little softer in a promotional environment. And a few new stores, Munich and Miami among them, now open in the fourth quarter rather than the third. With this in mind, we are very pleased with how our strategy is driving strong, high quality growth. The share of our online customers under 24 almost doubled year on year, with strong increases among both men and women. In a quarter, when the market around us was promotional, the youngest, most culturally influential consumers came to ON, while our full price share and resulting gross margin remained market leading. And that is the next generation of fans arriving on our terms. In retail, we opened some spectacular new stores across the globe, from Copenhagen to San Francisco. Productivity rose again, strongly led by apparel, and the store initiatives we told you about at the Investor Day drove another increase in customer satisfaction across the fleet. Turning to our regions, the Americas grew 12.4% at constant currency and reported rates to 490.1 million Swiss francs. In North America, growth accelerated from the second quarter. We grew shelf space with our key partners and won younger consumers through back to school. We held our position as the brand with the highest ASP and lowest discount rate in the industry, a direct reflection of the strength of our strategy and execution. Our key accounts grew both in their existing doors and through new ones, and there is a great deal of runway left in both. Further south, Brazil is becoming one of the most exciting stories in the region. The two stores we opened in São Paulo this quarter traded at more than double our forecast. And when the Loewe CloudTilt Cosmic launched in October, São Paulo was the second largest city in the world for it. EMEA grew 19.1% at constant currency and 17.9% reported. and passed a quarter of a billion Swiss francs in a single quarter for the first time in our history. We still sometimes read EMEA described as a mature region. Look at this quarter. Every sub-region grew and Southern Europe and the Middle East in particular ran well ahead of our expectations. Our Paris, Madrid and Milan stores now trade consistently in our global top 10 alongside our London flagship. This is a region with a lot of potential for growth. and as we set out in September, the runway ahead is long. Asia Pacific grew 31.9% at constant currency and 31.1% reported to 189.9 million Swiss francs. This is the deliberate control pace at which we are building Asia Pacific, expanding and elevating at the same time. This includes being even more selective about how we show up with our partners in the most premium way. That is why over the coming quarters we expect growth closer to the mid to high 20s corridor we set out for the region through 2029 than in the past two years. And you can already see the brand we are building. In Japan, our key partners came back to us for significantly more product through the quarter on the back of strong sellout with reorders well ahead of what we had planned. And both our Tokyo stores delivered exceptional results. In Korea, every store beat our expectation by at least 30%. And in Sydney, we opened our first store at Bondi Junction, the epicenter of Australia's activewear movement, in an apparel-first format, and apparel took almost 30% of the sales in its opening weeks. Turning to our categories. Shoes grew 16%, apparel 38%, and accessories 40.2%. Apparel and accessories together now make up more than 9% of sales. Caspar told you the run and the sneaker stories. I want to add training because it is one of the best examples of how authentically this brand can expand. Three years ago, training barely existed for us. This quarter, the Cloud X became our fourth largest footwear franchise, driven by the Cloud X5 and the Tempo, and the momentum carried into apparel. Training apparel grew particularly strongly in the US and the share of new apparel customers who found us through training nearly doubled quarter on quarter. Training is one of the fastest growing sports in the world and we have only just started. Moving down the P&L, gross margin excluding the tariff refund was 66.9%, the highest in our history. including 52.6 million Swiss francs of US tariff refunds, as we reflect in September, reported gross margin of 72.6%. Last year's third quarter included a one-time adjustment of roughly 200 basis points related to lower anticipated freight and other costs. So on a like-for-like basis, this is an exceptional underlying expansion of 320 basis points. This is first and foremost the underlying strength of our business model, as well as a modest FX tailwind. We would be proud of that margin in any quarter, but especially in such an environment. At the investor day, I told you that premium is not the adjective in our model. It is the mechanism. This quarter showed what that means. Our margin is the output of the premium playbook. Innovation that consumers choose at full price. Athletes who prove it on the world's biggest stages and experiences in our own channels that ON can deliver. Execute each of those steps and the margin follows. Full price discipline led by our newest technologies. The sourcing and manufacturing efficiencies that come with strong execution and a scale and a high DTC share. and that margin gives us the strength to invest in our future. SG&A excluding share-based compensation rose 270 basis points as a percentage of sales and underlying adjusted EBITDA margin expanded 130 basis points to a record 21.9% when excluding one of tariff and freight items mentioned earlier. Every part of that investment maps back to our three-year plan. Selling expenses grew with our store estate, and that is largely a mixed effect. As more of our sales come through our own stores, we earn a higher gross margin and carry higher selling costs at the same time. The net effect is clearly positive. As we showed you in Zurich, retail profitability, including those costs, sits comfortably above the group margin. G&A reflects our investment in technology and expertise, the capabilities to run on at the scale of our 2029 plan. We are building the single customer view and the omnichannel capabilities Alice described at the investor day, and we are embedding AI deeply into how we work. That build continues in the fourth quarter. Marketing was 12.1% of sales, a bit below the run rate for this year and reflecting phasing. Some production costs associated with our football launch along with a number of grassroots events and partnerships are landing in the fourth quarter. Put together, 2026 carries the upfront investment in our new sports and our technology foundations and the material SG&A leverage in our plan builds from 2027. Turning to the balance sheet. I already mentioned our exceptional record cash position. Inventory increased to 495.7 million Swiss francs, up 30.2% year over year. Within this, volumes were up just 16%, below our sales growth and a step down from the 20-25% growth in recent quarters. The difference is largely currency translation at period end, after the US dollar strengthened in September. We are well positioned for the holiday season and for the CloudSurfer 3 rollout in January and weeks of supply in our partners' inventory are healthy. Before I turn to the outlook, one more thank you to all of you who joined us in Zurich and to the OM team who made it happen. Two days is a lot to ask of anyone's time and we are very appreciative. The investor day was the result of a massive team effort and it is the same team with the same spirit of collaboration that will now deliver the plan we set out there. Looking ahead, the fourth quarter has already brought some of our biggest brand moments of the year. Our latest collaborations with Loewe and Sky High Farms, our first capsule with Burner Boy and our athletes on the podium from Frankfurt to New York and Beijing to Kona. The openings of Miami NLA stores have drawn huge crowds and stellar demand. We are reiterating our outlook for full year net sales growth in the low 20s at constant currency. We are planning for growth to accelerate in the fourth quarter with our holiday campaign now live and the biggest innovation cycle in our history gathering pace. And we will run the holiday season the way we have run the whole year in an expected promotional environment. We will stay true to who we are. We're excited for the important weeks ahead. The on-premium playbook is our standard, and we will always choose the long-term health of our brand. On gross margin, we are raising our outlook from at least 65% to around 66%, excluding tariff refunds, reflecting our full price commitment, our higher DTC share, and the efficiencies that come with scale. We will keep investing meaningfully into technology, innovation and marketing to support the many opportunities we see ahead of us. And we expect an adjusted EBITDA margin in the range of 90.5 to 20%. Again, excluding tariff refunds. Including tariff refunds, we expect a gross margin of around 67.5% and an adjusted EBITDA margin in the range of 21 to 21.5%. Let me close where I closed at the investor day. ON is a high quality earnings compounder. This was a quarter in which much of our industry traded price for volume. We did the opposite and delivered record sales. Our highest underlying margins and strong cash generation while doing it. In Zurich, growth and margin and not all was something we said on stage. Today, you can see it in our results. Our biggest product cycle has begun to land. We are investing to scale it and we are even more excited about this plan today than on the day we presented it. Thank you. Now, Caspar, David and I look forward to your questions.

We will now begin the question and answer session. For the Q&A, David and Frank are joined by Caspar Coppetti, founder and co-CEO. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Laurent Vasilescu with BNP Paribas. Your line is open. Please go ahead.

Oh, good morning. Thank you very much for taking my question. I wanted to follow up, Frank. Thank you very much for the color on Asia Pacific. I think you called out that Asia Pacific should grow in the mid to high 20s corridor area. I'm curious to know what you're seeing in, I know you called out Japan as very strong, but curious to know what you're seeing broadly across Asia, China. And then what does that imply, if you could, what does it imply for the fourth quarter for the other two regions as we kind of look for acceleration in the fourth quarter?

Good morning, Laura. This is Caspar. Allow me to take the first part of your question before I hand over to Frank. As you're aware, we're running the On Premium Playbook across all our regions. Now, if I had to pick one region where that playbook is almost like a match made in heaven, it is Asia with its aspirational consumer, its brand-savvy consumer. At the same time, Asia-Pacific is our youngest region, so there's a lot more demand than we can actually at the moment fulfill. And I'll give you a bit of color around that. Take South Korea, for example. We see a booming economy there. We currently have three stores, three on-stores that are operating there. That is well, well beyond the potential that we have. We have a fourth coming online pretty soon, maybe Q4, maybe Q1. But that's just one example. I spoke to this in the prepared remarks. In Japan, we have seen a tremendous demand, especially also for our running product. So in Japan wholesale, say the Alpen Group, we're now the number one running brand. When we look into China, when you look at where our own stores and our partners are, we're still focused on the tier one and tier two cities. So there's also a lot of untapped demand there. As a matter of fact, a third party study just showed that we've become now the number two premium footwear brand in China. And so we are, you know, the consumers are really looking for what we have. So what you're seeing in the numbers is it's a really paced growth. We could go much faster, but we don't see a need for it. And of course, we're not willing to lean in, say, in a period like now, double 11, when it's highly promotional. We don't necessarily want to waste our marketing dollars to spend against basically more promotions when we want to sell full price. And with that, I hand over to Frank for the bridge on the numbers.

Thanks for the question. Yeah, as Caspar explained, we are, of course, really happy with the quarter three growth in APAC with 32%. It's been strong on an ever-growing base. The mid to high 20s refer to the investor day, the planned period 27 to 29. and in that sense of course we're not giving an outlook for quarter four per region but I think it will gradually move as the base is growing in APEC of course like in any other region will steadily get to that growth rate across the plan period as we described in EFS today.

Very helpful and this is my second follow-up question. It was very helpful to you yesterday. I think you called out that you're currently at 60% of Dick's Sporting Goods doors and 50% for Foot Locker and JD with the ambition to get to 75% for 2029. I think you called out additional doors for this quarter. Curious, you know, how do we think about this 75% target? Is it a steady progression over the next three years or is there a material step in next year Thank you very much.

Reflect also the investments that especially Dick's are making in upgrading their fleet. They're opening quite a large number of house of sports stores. They're elevating some of their existing doors. And this means that we have a wider field to play with our own premium playbook. So, you know, don't look at this number as a fixed number, but more of a kind of like a well aligned number with our key partners of, you know, what is the premium environment that they can provide to them.

Very helpful. Thank you very much and best of luck. Thank you. Thank you. Thanks.

Your next question comes from the line of Adrian Yee with Barclays. Your line is open. Please go ahead.

Great. Thank you very much. My first question is going to be on the light spray, obviously, technology. What did you learn from the early reads on it? And in the analyst day or the investor day, you had talked about a 10% penetration target, but it was unclear about when we would get to that and how that changes the supply chain, the investments that you need to make over that horizon, and how you might accelerate that to get to a higher number on a shorter time period. Thank you very much.

Thank you so much for your question. We love talking about innovation. Hey, look, LightSpray is well on track. We just saw quite a big uplift in demand for LightSpray after the football announcement, because obviously the technology that the football boot is based on is LightSpray. And so that actually translated over to LightSpray sales of our existing models, mostly the LightSpray CloudMonster Hyper. Now, unfortunately, production is still quite below demand and we're ramping up production very quickly. So we have the two facilities, the one in Switzerland and the skilled factory in Korea. We're just about to bring online a factory in Vietnam. and some of the football boots and most of the football boots will be made in Portugal. So by mid-year next year, we'll have four light spray locations in production. What's very encouraging is to see as we scale this technology that our margins are becoming very attractive. One of the things that we have to manage and as in every manufacturer has to manage is the defect rate. And we've made fantastic progress towards like a 5% defect rate, which is in line now with all the technologies. And so I also want to give a shout out to the technical team on our end that has managed this in a very short period of time. Now, if you look a bit ahead, and that's to your 10% question, that is directional, whether we hit that by 29 or 2030 or 28, it wouldn't go too deep. What you can expect, though, is that we're going to roll out Light Spray, not just to our performance franchises, but it will also start to show up in our lifestyle or sneaker franchises. And we have quite a deep pipeline of how the technology becomes more vivid has more optionality, has more color options and more texture and so on. And I would say expect some of that to land in 28, where we will for the first time see the full potential of the technology.

Okay, great. Thank you. And my follow-up question is on AI and the investments that you're making there. There's some discussion about kind of a future world where Thank you for the question. When it comes to AI and changing consumer service, you of course know that we have seen the whole transition.

from desktop to mobile to social. And so that's just the latest change off the surface. And we're very proactive about it. So a high percentage of our customer service conversations are already fully done with AI. That gives us a rich color on customers and it's really a conversation. and if you can imagine that this happens at scale, not just in customer service, but then also on the overall services that we give consumers through the website, through retail, through our app, that of course is an incredible potential to engage with customers at scale through AI. So we're definitely working on that and you've probably seen that in a more tech environment, Thank you very much. just through a genetic move from AWS to Google. That's been one of the case studies at the recent Google at Work conference of a complex process that is made much more efficient through agents. And so if it can happen there, you can imagine what that means then for the consumer-facing technology.

Your next question comes from the line of Anisha Sherman with Bernstein. Your line is open. Please go ahead.

Thank you so much. I'm curious about the environment in the Americas. It's nice to see the stronger growth in that region. Can you give some color on are you seeing an improvement in that promotional environment that you've now talked about for two quarters? And what drives your optimism in Q4 where you say that partners are at healthy inventory levels? Do you expect the promotional environment to continue to improve? And then a quick follow-up on your comments on wholesale versus DTC. Can you talk about your expectations for the mix in Q4? It seems like you saw a pull forward in wholesale deliveries into Q3, while on the other side it seems like you pushed out some of the DTC retail growth into Q4. So can you give some color on where you expect the balance to be on the channels? Thank you.

Thank you. I'm happy to take the first part of the question. I would say, especially in U.S. wholesale, it's pretty much the same story as in Q2 and Q3 in terms of a promotional environment. We of course are a bit less affected by that. So we're leading with innovation and our stories and we stay the course. So we're very much basically unaffected by that. We focus on what we can control and that is trying to keep inventory levels and our supply in the right balance. In Q2, we spoke about that. We took measures to prepare for the upcoming generational shift in our running technologies. Some of that is now already in market. What we're very encouraged by is that these signals are, of course, right now, CloudSurfer is only available in run specialty. Thank you very much. that we will gain share in performance running in 27. And of course, on the lifestyle slash sneaker side, there's a big trend away from the heritage styles to more innovation-led styles and ON is heavily benefiting from that. So already this year, we have been gaining quite a bit of market share in the sneaker space and we expect this trend to continue into 27.

Thanks, Kasper.

Yeah, I think I need to give a bit more sort of color on the numbers. I think first of all, what we have seen is that the first thing I would say in the US is that the sell out has been beyond the sell in. And that's also why we are positive on the inventory developments. So that is an important factor. Of course, as we said in quarter two, we'll spend a lot of time with our wholesale partners in order to drive the sellout. And that has really worked. The meaningful step up has been there in quarter three and including a tight control of the sell-in. So we're positive on the infantry levels. If we look further to quarter four, we will not, of course, guide specifically on the channels. But what we have said in the press release is that we expect an acceleration of quarter four growth versus quarter three, and that will be predominantly DTC-led. Yeah, and that... and the other point is on the wholesale, what we saw in quarter three was that what something that we can't really control is that we had a bit of extra pickups from retailers, meaning that our growth, we said in EFS today, we would land at about 17%. We were slightly ahead, which came predominantly for that. And that will have obviously a corresponding impact on quarter four. But again, that's why I think when we look at quarter four, we expect an acceleration. DTC led, yeah.

Thank you so much.

Your next question comes from the line of Kelly Crago with BMO Capital Markets. Your line is open. Please go ahead.

Hi, thanks for taking your question, Greg Porter. I just want to dig into the U.S. wholesale channel a bit more. First, on the Run Specialty channel, you have some good call-outs there around the Cloud Surfer 3. So just curious how that channel has been trending for you. How it's trending now and how you expect that to trend as we look ahead. And then I have one follow-up. Thanks.

Thank you. Yeah, the Run Special channel for us is something that's very close to our heart because that's where we started and we still believe that's where technologies are validated. So what we've done now with CloudSurfer 3, this shoe was heavily, basically was developed with a lot of input from our Run Specialty partners, a lot of insights. We also have a panel of Run Specialty owners that then test the product. So we said, you know, to honor that, A commitment that the channel has to on, the channel has access to it for the first three months exclusively. That is obviously something that not a lot of brands have done or ever done. And so we're getting a lot of love back. So we're definitely seeing that in the pull rates, how often on gets pulled, how other silhouettes of franchises are being sold. And we're seeing it in the order rates going into 2017. If you look back, you know, maybe five years back, you know, and you look at pure market share, the channel on market share was maybe a bit higher than it was today. But it was a very different product mix. At the time, the Run Specialty channel also sold our lifestyle footwear cloud as a comfort shoe. And so we have kind of reset the distribution around our lifestyle product. And so comfort is no longer part of our own specialty. In fact, we're not doing comfort at all. And so, you know, if you compare the numbers, that explains part of the difference. Right now, we're definitely seeing a very quick acceleration and a strong belief of the channel in us. And I'm personally going to travel out to the biggest trade show for the channel, the running event in San Antonio later this month to also check in and get some feedback that we then can use again to build better product in the future.

Great, thank you. You had a follow-up? Yes. Just on the lifestyle piece within the wholesale channel, as we've seen the market slow and the promotions step up and some big players out there having some challenges, I guess how have the conversations have gone with your retail partners? Are you seeing shelf space gains based on Yes, yes, absolutely.

So, you know, again, so the overall the lifestyle market is down, we're very significantly up. And maybe so as a result, we've gained a lot of market share. And of course, that is reflected in the shelf space that we're getting. Our goal as on is to basically stand on several legs in that channel. Obviously, the CloudTilt is an absolute blockbuster. In Europe, it's the number one selling sneaker. In the US and in Asia, it's in the top three. What we're very encouraged by now in this Q3 is that We're starting other styles to be picked up heavily. First of all, the youth is discovering the cloud, one of our original staples that's now 12 years old. And they're almost like rediscovering it and giving it new meaning. So we've seen a lot of demand for that, especially in lighter colors. We also see, in addition to the high stack trend that we've seen for quite a long time now in the market, We're seeing a sleeker silhouette emerge, especially for the female customer. And we have just launched two styles that cater to that. The Cloud Nova Moon Mary J that we launched with Sandeya and the Cloud Muse that we just launched. Both are getting really, really good pickup rates. So this continues to be a good story for us. And of course, as some of our competitors have not so strong innovation pipelines, also our key partners, so Footlocker, JD, Snipes over here in Europe, they're willing to trial things with us. And you can imagine if a consumer comes back into, say, a Footlocker store, and they see a new style from on, it's a discovery process. And so that's how we're hoping to broaden our appeal with that consumer.

Your next question comes from the line of Jay Sol with UBS. Your line is open. Please go ahead.

Great. Thank you so much. I think on the last call, you talked about acceleration. and sales growth. And we're seeing that in fourth quarter from Q3. But I think, you know, with the broader rollout of the cloud server three starting in January, the strength of the cloud tilt, that's where you talked about strong order rates and order books. Do you expect to see a further acceleration into Q1? I think that was sort of the thinking if we go back last call. If you could talk about that, that would be great. Thank you.

Yeah, thanks, Jay. The I would, for quarter one, we will not give yet guidance on the quarters for next year, but I would not necessarily, as of course RUN is one variant, I would say, so I would not assume a strong acceleration, a further acceleration in quarter one, long story short, as of course it is one part of the full portfolio. I think what is more important if we look at the back end or the second half of 2027 then of course we will bring the super foams to the entire running franchise including the runner and the monster and that effect is probably more meaningful because then it'll be the full running franchise.

All right Frank that's very helpful thank you and maybe if you can you talk about how Thanks for asking, Jake.

Indeed, the gross margin has been trending really favourable, of course, being a direct result of the full price strategy that we have, the commercial policies, but also continued efficiencies coming through scale in the manufacturing and supply base. Thank you very much. and also I think on the technology front we just see meaningful progress as David just elaborated on. So we also don't want to take the foot off the gas on that front. So important I think most important is that the investments are completely in line with our investor day narrative as we explained and secondly is that we are still maintaining our earnings outlook.

Your next question comes from the line of Anna Andreeva with Piper Sandler. Your line is open. Please go ahead.

Great. Thank you so much for taking our question. And congrats. You mentioned earlier the expectation for DTC to accelerate sequentially in the fourth quarter. Can you talk about just what's giving you that confidence? Are you seeing acceleration already quarter to date? And how should we think about that across the geographies? And just as a follow-up, You mentioned the factory in Vietnam for light spray coming online shortly, which is super interesting. And you talked about 26 capacity increase by, I think, a 30 fold. So maybe talk about what can we expect from capacity from this new facility? Thank you so much.

Anna, thank you very much for your question. This is David. You're right. I mean, D2C grew 25% almost twice as fast as wholesale and gained 2.6 points of share year over year. And I feel very few brands in our industry are growing their own channels at that rate. And we did that, and I think that's important. We did that at full price, which is why our gross margin hit the record 66.9%. and we also achieved this despite high productivity flagship openings shifting into Q4, for example Munich and Miami-Aventura, so we had to offset that. The more interesting question I think that's where you're pointing to is what is driving the growth? We're putting even more energy into our D2C engine, younger customers, bigger baskets that mix footwear and apparel and and the stronger presence and preference for the brand through our retail stores which of course is part of our long-term strategy. It follows our premium playbook, preference is earned and definitely is not bought and that's also what you saw from us in the last quarters. If I can give you a few examples, so younger customers, our online customers Under 24, almost doubled year over year, and that's both men and women. There's bigger baskets. People who come to us through apparel come back sooner and buy more. So we're really kind of growing share of wallet as well. And then just the sheer presence through retail. 10 new stores in Q3 from Copenhagen to San Francisco, Sao Paulo, and So we spoke about that in the call. And then if you think about how this goes into the next year, we basically told you that in the investor day that we're going to scale over the next three years to 180 doors roughly. We're currently closing in on 100 doors over the next months. So that's, of course, then a whole lift for an overall D2C business. So it's really an incredible energy. And that also shows in our latest brand tracker that shows that nearly one in three heavy sneaker buyers says that they now prefer on. And our gain in preference was the biggest. of the 12 brands that we tracked. So it's really our premium playbook at work. Earn preference, protect the price, and then economics compound.

Yes, and then Anna, to your second question, a lot of these consumers are looking for a light-sphere product and currently we cannot make them fast enough. So that's why the additional capacity in Vietnam will be very, very welcome. Once fully built, this will more than double our capacity. But there's also another reason why we're opening it in Vietnam for this stage, because we want to, as I said earlier, we want to have more product variety. So more expression of what a light spray product can look like. And so we're searching the proximity to our tier twos in Vietnam to pilot these things. And then we can take them, you know, the goal with light spray, of course, is to be closer to consumers with our manufacturing. So the things we have learned in Korea are now going to Vietnam and these things can then go to other locations that are still to come.

That sounds great. Thank you so much.

Your next question comes from the line of Alex Stratton with Morgan Stanley. Your line is open. Please go ahead.

Great. Thanks so much. Just a couple for you here. One final one just on DTC. Did that fall slightly below plan across geographies or was that concentrated more heavily in one geography or another? And then separately, just on the high teens revenue growth target from the investor day, Can you just talk about how we should think about the shape of that over the three years? Thanks so much.

Thanks, Alex. On DTC, I think, as David said, we just see a lot of bright spots, really, and we believe there is a lot of positive momentum, in particular also the younger consumer coming into our ecosystem. I think there's a couple of ways to look at it. The reality is that quarter two was a bit, I think, above our expectations and quarter three was slightly below. But I would not necessarily read it really as a trend, but a bit more as just probably fluctuations that you always see in a business, more than any of that. And that's also why we are quite confident on the acceleration that we'll see in quarter four, back to in the range of that running rate year to date. that's how I would mostly look at it yeah we also gave in the commentary a couple of additional colors like there were two stores that came in a little bit late instead of quarter three launched in quarter four some of these details of course in e-commerce you also have marketplaces that are inherently a bit more promotional but all in all I would stick to that sort of volatility that you typically see over the quarters yeah If we then go to the second question on the outlook, the phasing of the growth in the high teens, the way we see it is that we'll expect that we'll be at the high end of that range in the beginning of the period and at the lower end of the range. Thank you very much. The second factor to call out is of course Los Angeles 28 is going to be a big event also for us. And we expect upside there. The third element is that the new sports, we will only launch them gradually in 2027 and there'll be increased returns and growth coming from that in the second half of the planned period. And that's why the growth we'll see is as described, starting at the upper end of the range and ending a bit at the lower end of the range. Hope that helps Alex.

Thanks a lot.

We have reached the end of the Q&A session. This concludes today's call. Thank you.