As the dust settles on Liberation Day the Street is starting to pick through the rubble and getting long stocks just in case the world doesn't end.
Consider On Holdings, the Swiss shoe and athletic concern. Shares are popping on a down day thanks to a couple upgrades. The gist of both is something I wrote about the company last March; On is taking market share, expanding across the globe and generally speaking the hottest brand going, at the moment.
That's the view of me, Citi, UBS and about 75% of the fashionable people I run into at our over-priced health club. It's also something noticed by Mrs. JC Parets, and Mrs Jeff Macke; two solid sources on such matters.
On vs Skechers
Being hot is the ultimate tailwind for a consumer brand. Given the headwinds of the moment (tariffs based on trades between the US and anywhere else), it doesn't hurt On to be a Swiss based company doing a lot of business in Europe and on the other side of moving a good portion of production from China to Indonesia and Vietnam.
Skechers, another shoe company that saw years of stock gains sliced off in the last 3 months isn't hot. Skechers is US based, reasonably well diversified on revenues and supply chain but, ultimately, chained to the whims of trade.
Between share gains and that little tweak in distribution On is better positioned to withstand whatever happens. They have the best margins in the industry, almost no penetration in clothing (but getting there) and it's the shoe for everyone from cool mom's to their husbands and even kids. (The last point is controversial. On's are still NOT a teen favorite. But they will be.)
As a result ONON has seen a bounce off the panic. SKX, not so much
All that an On's chart isn't even broken. The stock bottomed ahead of the rest of the consumer tape on April 3rd and is now slightly higher over the last month.
Consumer names with an unambiguously decent chart, share growth, margins and a tariff friendly supply chain are hard to come by. Unless this whole Trade thing goes Worst Case On is worth a shot.
