Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the On Holding AG Q2 2022 Results. [Operator Instructions]. I would now like to turn the conference over to Head of Investor Relations. Please go ahead, sir.

Good afternoon, good morning, and thank you for joining On's 2022 Second Quarter Earnings Conference Call and Webcast. With me today on the call are Executive Co-Chairman, Co-Founder, Caspar Coppetti; CFO and Co-CEO, Martin Hoffmann; and Co-CEO, Marc Maurer. For the first part, Caspar and Martin will lead through the prepared statements, after which we are looking forward to opening the call for a Q&A session. Before we begin, I would like to remind everyone that the remarks during today's call may contain forward-looking statements regarding future events and financial performance within the meaning of the federal securities laws. These forward-looking statements reflect our current expectations and beliefs only and such statements are subject to certain risks and uncertainties that could cause actual results to differ materially. Please refer to our 20-F filed with the Securities and Exchange Commission on March 18 for a detailed discussion of the risks that could cause actual results to differ materially from these expressed or implied in any forward-looking statements made today. Please further note that this call will also contain certain non-IFRS financial measures such as adjusted EBITDA and adjusted EBITDA margin. While the company believes these non-IFRS financial measures will provide useful information for investors, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with IFRS. Please refer to today's release for a reconciliation of non-IFRS financial measures to the most comparable measures prepared in accordance with IFRS. With that, I will turn over the call first to Caspar, followed by Martin for the prepared remarks.

A warm welcome to all of you joining us today. I hope that you have been able to spend some quality time over the summer with your families and friends. We are excited to discuss On's performance in the second quarter of 2022 with you, share some big milestones and give you some color on how we look at On's continued growth trajectory in the current macro environment. This is our fourth earnings call post IPO and on behalf of the whole On team, we are very proud to present another record quarter. Consumer demand for the On brand remains very high. On grew 67% overall in the second quarter of '22 and many key markets had outstanding growth rates, such as the U.S. and Japan, which doubled; or the U.K. and Australia, which grew by more than 60%. All geographies, channels and categories contributed strongly to this outstanding result, confirming On's tried-and-tested strategy of maintaining a well-balanced product and distribution portfolio. On is winning with consumers and also on the racetrack. As a result of this strong growth, On is making significant market share gains in the specialty and high-end distribution channels that we choose to play in. The growth comes from both established as well as new product franchises, and I would like to call out some of these new products that have become instant fan favorites. On's promise to run is to run on cloud, and we are doubling down on this with more underfoot protection and ultra-light comfort. This spring, we have introduced the Cloudmonster for maximum cushioning and the Cloudrunner for ultimate all-around comfort and performance. The Cloudmonster is already amongst the best sellers in our own distribution, and it has given us access to an additional consumer and first-time purchaser of our brand. The Cloudrunner, introduced early in Q2, jumped straight to being one of On's most successful performance running shoes when looking at the combined On's specialty and general sporting goods channel. In Performance Outdoor, the Cloudvista also launched in Q2 is quickly rising to the top of the leaderboard. And last not least, the Cloud 5, which we launched earlier this year is continuing its winning streak in performance all day. We also have new styles in this category. If you are looking for a light summer shoe for a year August getaway, we can recommend the Cloudeasy with its ultra-light, slip-on knit upper. On the apparel side, Q2 saw the entry into a new product category with the launch of our Active Bra and Performance Bra. Both have received great feedback from customers, being covered by numerous media channels and both bras are now among the best-selling apparel items in On's e-commerce. Now let's move on to our fastest product and to race track. You will remember that we introduced you to On's lightening program at our last quarterly update. This includes a dedicated team that works on making the fastest shoes to unleash our athletes' full potential. What we didn't expect is that we will be able to stand here only 3 months later and talk to you about On's first track & field Diamond League victory. On's first Commonwealth Games Victory and On's first World Championship medal as well. You most likely have never heard of Dominic Lobalu from South Sudan. Well, you're in good company, neither had the elite field in the 3,000 meters of the Stockholm Diamond League meeting, where Dominic came first, ahead of the favorite who will go on to win 3 medals at the World Championships at the Commonwealth Games. Stockholm was Dominic's first elite race for the simple fact that he's a refugee and does not have a passport. On has supported him for some years now, first through the athlete refugee team and now here in Switzerland, and we are very happy for him and this incredible achievement. Only a couple of weeks ago, On's athlete Hellen Obiri added another huge milestone by winning On's first track and field World Championship medal in Eugene, Oregon. And OAC family member, Ollie Hoare, took the 1,500 meters gold at the Commonwealth Wealth Games in Birmingham. We are not just winning on the track, we're also making strong progress on sustainability. First, I would like to give you an update on our circularity program, Cyclon, the shoe that you will never own and is only available through a subscription called Cloudneo. Circularity and the use of lower impact materials are a big part of our mission to decouple On's resource consumption from our strong growth. One of On's core company values is the survivor spirit, and it stands for innovating our way to a more sustainable future. Over the past weeks, our very first community of recycle subscribers in the U.S. and Switzerland received the Cloudneo and we will look forward to giving more and more people around the world the opportunity to run and exploring On's most sustainable products to date. This very special launch has brought On a step closer towards our sustainability mission to lower On's carbon footprint by designing products made for circular systems and engineered with fossil-free materials. As we observe the consumer behavior in connection with Cloudneo and our subscription model, we are not resting in our push to more sustainable products on all fronts in the short term as well. For example, we have significantly increased the level of recycled polyester in some of our more recently launched running products. The Cloudvista, Cloudmonster and Cloudrunner contained 74%, 84% and even 90% recycled polyester, respectively. In comparison, in On's spring/summer '21 range, the level had been at 16% on average. We are on a steep learning curve and fast implementation cycle. And some of the learnings from the groundbreaking Cloudneo have already found their way into other products. The newly launched sneaker Cloudeasy is made with only 15 pieces, about half of what the regular On uses. Less parts means less impact and higher recyclability. This, combined with the new half Speedboard made from injected TPU and the full knit upper made a 100% recycle polyester leads to significant waste reduction without any compromise on performance nor comfort. We also believe that what gets measured gets done. On has set ambitious, clear, sustainability targets, and we are committed to transparently reporting on our progress towards them, which brings me to the pleasure of making you aware of the upcoming publication of On's latest impact progress report. Not only we will be updating on our goals and progress, you will also find a number of fascinating case studies on projects our teams have been passionately working on over the past months and years. In sum, while looking back from the halfway mark of our 2022 race, half year 1 has been incredibly strong for On. Despite the supply challenges and macro headwinds, we have achieved new record numbers, launched well-resonating products and reached new milestones together with our exceptional team and athletes. At the same time, we have plenty of energy and stamina for the second half of the race. While we are staying vigilant and financially prudent as always, all indicators show that demand for the On brand will stay very high. This puts On in the privileged situation to consciously select which of the levers we want to pull at which point in time to deliver durable and controlled growth. With that, let me pass over to Martin for the Q2 financial review and the outlook for the rest of the year.

Thank you, Caspar, and hello, everyone, also from my side. With CHF 291.7 million and 66.6% growth, net sales in Q2 has been by far the strongest in the history of On. In June, for the first time, net sales in the single month exceeded CHF 100 million. And net sales in the first 6 months of the year have grown by 67.2% to CHF 527.3 million. Our adjusted EBITDA more than doubled compared to Q1. And if you exclude the extra airfreight, which was needed to overcome the residual impact of the supply side from last year's factory closures, our gross profit margin and adjusted EBITDA margin for both Q2 as well as half year 1 would already reconfirm our long-term profitability target. We could not reach such incredible results without the dedication and passion our team puts into all parts of the business every day. We have grown from 1,150 to almost 1,500 team members since the beginning of the year. Over the last weeks, Caspar, David, Marc, Olivier and I had the opportunity to visit our North America team in their new office in Portland, our tech and happiness delivery team in our recently opened office in Berlin and our development and innovation team in Ho Chi Minh City. After 2 years, we were also allowed again to visit Tokyo to meet with the Asian teams and to see firsthand how On's new Tokyo store resonates very strongly with Japanese customers. We also had the opportunity to visit many of our factories and factory owners to align on our joint growth plans. And last but not least, we opened On Labs which is what we call our new office in Zurich. And for the first time in 4 years, all our Switzerland-based teams are now starting the launch runs from the same building where they share a coffee on our community platter. We also had the opportunity to already welcome many of our global key retail partners to our new home base. On Labs also serves as the new innovation heart for On. More than 30% of the space is dedicated to research and product development, allowing us to take Swiss engineering to the next level. We have even opened our own sample production line to produce shoes and apparel samples on site. Together with an elevated computer simulation programs and the world-class sport science laboratory, we are now able to test and refine innovation at a much higher pace. And On Labs is home to our first owned retail store in Europe which allows us to test the latest innovations for On store design and to further build a strong run community in our hometown. Now let me turn to our financial performance in the quarter in some more detail. Our net sales growth has been stronger than expected and driven by all channels, regions and product categories. The success of our latest product launches exceeded our own expectations and lower airfreight rates allowed us to deliver more product to meet the incredible demand we have seen at our retail partners as well as our own direct-to-consumer channel. In Q2, we saw our omnichannel strategy shine again with strong growth of 70.1% in wholesale and 60.8% in direct-to-consumer. In wholesale, growth was driven by the continued gain of market share with most of our existing retail partners. This is driven by the success of existing and new products as well as a further selective expansion of our doors with our global and regional key accounts. We see the strong growth in our D2C channel consisting of On's own e-com and own retail as a further validation of our ability to build and retain a loyal fan base and to provide the best and most authentic experience to our customers. For the first time, direct-to-consumer net sales surpassed CHF 100 million in the quarter, reaching CHF 105.6 million. The contribution of net sales from the D2C channel was 36.2% for the quarter versus 37.5% in the same period last year. Especially in Europe, Q2 D2C sales last year were still inflated by the ongoing lockdowns. Germany, for example, only lifted restrictions in May 2021. Starting in October, we expect to roll out our new website, which will provide our friends a much more tailored, individualized brand experience. And it will allow us to show more product details, which we believe is a key driver for further growth of our apparel share. Within D2C, while still a small part, we are pleased to observe the success in increasing contribution of our own retail stores. The new flagship stores in Tokyo and Zurich had a very successful start financially but also as hubs for the local run community. Our New York City flagship store had its strongest quarter in history, driven by a significant increase in in-store traffic. This success is giving us a lot of confidence for the next stores in the U.S. We expect to open On L.A. in September and On Miami in December. The opening of our London store will be slightly delayed to very early 2023. With that, we expect to end '22 with 13 owned and operated stores in China and 6 own retail stores in all other markets. As mentioned, all regions contributed significantly to the net sales growth. In North America, we continue seeing the strong brand momentum that has been fueled by the IPO, by a strong product market fit of our existing and all recently launched products and by the successful expansion of our collaboration with the best key accounts and specialty stores in the region. Q2 net sales in the North American region more than doubled, increasing by 102.5% to CHF 181.7 million. With this, North America accounted for 62.3% of our business in the 3 months' period. Net sales in Europe grew by 17.5% to CHF 83.3 million. Wholesale has grown overproportionately as we continue seeing a stronger shift from online to off-line shopping. Also D2C sales in Q2 last year had been elevated due to the sustained lockdowns in many key markets. In addition, net sales growth has been negatively impacted by a weaker euro and British pound compared to the Swiss francs. We continue to be very encouraged by the development in individual markets within Europe, including, but not limited to, U.K. and France. Net sales in Asia-Pacific grew by 52.2% to CHF 17.9 million. The very strong growth in Japan and Australia allowed us to offset most, but not all, of the impact from the extensive lockdowns in China. Our warehouse in Shanghai and around half of our China stores have been closed for 2 months, resulting in approximately CHF 5 million lost sales. Due to the structure of the China business, the impact is overproportionate on our D2C and apparel business. As soon as restrictions were lifted, we have seen a very strong recovery in China. And in June, our own retail locations had their strongest month in history. Finally, Rest of World net sales grew by 224.2% to CHF 8.8 million, reflecting the post-COVID recovery in many of our distributor markets as well as some earlier shipments of fall/winter products compared to Q2 last year. Moving to the performance by product category. As Caspar mentioned, our expanded line of innovative performance running shoes is driving market share gains in the running market, both from existing as well as new customers. The Cloudultra and Cloudvista have become favorite on the feet of trail runners. And the Cloudnova continues to drive us to new customer groups. Net sales from shoes increased by 68.2% year-over-year for the quarter to CHF 280.6 million. Net sales from apparel product grew 31.3%, which was slightly below our expectation, but also shows the large opportunity that we have in this category given the strength and penetration of our brand in footwear. Our strategy to build On as a sportswear brand has been validated in Q2 by the ongoing very strong apparel sales in our own retail stores as well as in shop-in-shop environment. The apparel share in our new Tokyo store is already at 18% and in Zurich at 19%. In Europe and North America, we continue to invest in shop-in-shop installations, for example, in Nordstrom, Sport Chek and . As a result, we see both strong uplift in overall sales and a significantly higher apparel split between 15% to 25%. Finally, net sales from accessories increased by 51.9% to CHF 1.8 million. Gross profit in the second quarter 2022 was CHF 160.8 million compared to CHF 106.3 million in the previous year period. As expected, we continue to selectively use airfreight in Q2 to ensure key product availabilities. We have, however, come a step closer to normalization and have reduced the required airfreight share in comparison to the first quarter. As a result of the investment into air freight, our gross profit margin decreased from 60.7% in Q2 last year to 55.1% in Q2 this year, but was up sequentially from 51.8% in the first quarter of the year. In Q2, we continued to invest in all parts of the business while still delivering profitability despite significant airfreight costs. SG&A expenses before share-based compensation and excluding CHF 3.3 million IPO-related equity transaction costs in Q2 2021 were 48% of net sales in Q2 this year compared to 48.7% for the same period last year. Share-based compensation led to a lower expense, both in Q2 this year and in the prior year period due to reductions of existing provisions to reflect revised estimates in connection with future option exercises. Despite the investment in airfreight as well as the higher-but-controlled SG&A expense, we achieved a strong adjusted EBITDA of CHF 31.4 million, an increase of CHF 4 million and 14.7% compared to prior year period. Adjusted EBITDA margin for Q2 this year was 10.8% compared to 15.7%, with this reduction, again, largely being a result of airfreight costs. Moving to the balance sheet. Capital expenditure for the quarter was CHF 11 million or 3.8% of net sales, largely consisting of investments into new owned retail stores, office build-out as well as into IT infrastructure. Inventories increased by CHF 54.3 million compared to end of March, reflecting the significantly improved supply situation. With this position, we were well equipped to deliver our strong fall/winter season preorders beginning as of early July. Higher working capital was a key driver for the reduction of our net cash from CHF 600.4 million at the end of Q1 to EUR 557.7 million at the end of Q2. So our strong balance sheet allows us to pursue our ambitious growth plans and upcoming investments. Now let's look ahead. To help frame our financial outlook, let me share our view on some of the underlying drivers. First, the macroeconomic environment. Despite the macro uncertainty, we currently do not see any signs of a slowing demand for On products. Appropriately, in an environment like this, some key accounts have started to pay more attention to their in-store inventory, but sellout numbers for On have stayed consistently strong. And we are clearly planning the business this year for continued strong growth, but we are also focused on controlled and durable growth, which I will come back to at a later point. Second, given the macroeconomic uncertainties, we took the decision to grow our cost base more conservatively and to reduce our goal for new hires for the remainder of the year. And while we felt the importance for our teams to come back together physically after the end of the pandemic, we plan to make more use again of the proven ability to working together virtually and to reduce travel in the months to come. Third, our financial results are impacted by the current volatility of currencies, especially the strength of the U.S. dollar and the weakness of the euro in ratio to our reporting currency, Swiss franc. A strong U.S. dollar versus Swiss francs can be considered a tailwind for net sales and absolute gross profit by having a negative impact on gross profit margin. A weak euro versus Swiss franc has a negative impact on net sales, on gross profit and gross profit margin. We will continue to report our results on a stated basis and focus on the underlying business development, but the continued high volatility of currencies may impact those reported results. Our guidance in general is based on spot rates. Fourth. Thanks to the dedication and commitment of our factory partners. We were able to compensate for the majority of the lost production capacity during the factory closures last fall. Our supply situation has improved significantly. And as announced in earlier calls, we expect to use a more standard ocean freight for the vast majority of shipment. But our recently launched Cloudmonster and Cloudrunner are exceeding expectations. And in order to provide sufficient supply, we decided to continue investing into airfreight for both franchises in Q3 to meet this demand. This will have a limited impact on our gross profit margin of 150 to 200 basis points in the third quarter. In addition, we expect an additional 50 basis points headwind for Q3 and Q4 from the current currency rates. With all that context as a backdrop, based on the performance we have seen in the first half year, we are once again raising our outlook for 2022 from CHF 1.04 billion to CHF 1.1 billion, which effectively passes through slightly more than our Q2 overperformance for the full year. This new top line reflects a strong full year growth of 52% compared to 44% in our previous guidance. As always, we will continue to strive to exceed this number but only in the service of a durable, long-term growth. Let me explain what we mean with durable and controlled growth. We are thinking long term, and our goal is to build a durable company at the intersection of performance, design and impact. Managing that growth ensures scarcity, which is the key driver to build desire and to maintain our position as a premium brand. It also allows a balanced growth across both channels and all regions. Growing strongly, but controlled also puts focus on efficiency across all parts of the organization as a prerequisite for a continued increase of our profitability. And last but not least, the strong focus on tighter inventory control, premium positioning and the controlled growth of the cost base makes On more resilient against the impact of a potential economic downturn. The higher net sales will allow additional growth-focused investments into the brand and the team while increasing our adjusted EBITDA target for the full year to CHF 145 million, reconfirming our goal of an adjusted EBITDA margin of 13.2% for the year, even at a significantly elevated top line outlook. As you can see, a foundation is being laid for a larger and even more profitable company in the years ahead. Not even 12 months ago, we filed for our initial public offering. So much progress since then. We became a more diverse, inclusive and more sustainable company. We introduced new exciting innovation and sustainability-driven apparel and footwear products for running, outdoor and performance all day. We entered into new markets, including Latin America and Hong Kong. And we started to work with some of the largest key accounts in the world to increase our share on runners' feet and also with the younger community. We have grown our last 12 months revenue by 64% from CHF 570 million to CHF 937 million. And our teams achieved all of this despite the ongoing impact from COVID-19 factory closures in Vietnam and the recent lockdowns in China. Almost 600 people started at On since the IPO, and we are proud to welcome them in our new offices around the world. We're equally proud about our athletes, their success and their passion for innovation that has driven the development of exciting new products. But most importantly, our culture has not changed and continues to be ruled by our 5 spirits. The athlete, explorer, positive, survivor and the team spirit. They will continue to drive our future and we couldn't be more excited about all the opportunities we see in front of us. We will continue to ignite the human spirit through movement and [indiscernible]. And with that, Caspar, Marc and I would like to open up the session to your questions. Operator, we are now ready to begin the Q&A session.

[Operator Instructions]. The first question comes from the line of Cristina Fernández from Telsey. Cristina Fernández: Congratulations on the nice quarter. I wanted to ask about your view of the industry inventories across the marketplace. And what impact, if any, that is factoring into the outlook? I mean there's definitely a conversation of inventory picking up and promotions increasing in the back half of the year. So how are you thinking about your outlook in that context?

Thank you for the question. And this is Marc speaking also from my side. Hello to everyone. So we're watching that very, very closely. And the way we're looking at this, one, we're in close contact with all the factory partners and are trying to understand how the production volumes are moving. And then we're very much focused on sellout and inventory data also with our key retailers to also understand what market dynamics from a discount perspective we might see in the second half of the year. I think what's very important for us, and as you can see in our Q2 numbers, we're still very much in the game of gaining market share and it's not about incremental growth. And so we feel that the strong brands will continue to see strong momentum also in the second half of the year, and this is reconfirmed by our partners and how they are looking at their order book with On. I think, in general, there is some expectation that -- and the brands that probably have a little bit less momentum, they will -- there is some higher inventory positions and probably also a slowdown on the production side. Cristina Fernández: And then a follow-up. Can you talk about demand trends by region? North America continues to be an outperformer. Perhaps Europe, where growth has been a little bit slower, how are you expecting that to progress over the back half of the year?

Yes. So I think what you're seeing in the numbers is similar to what we expect to happen in the second half of the year. So we continue to see the U.S. to be very, very strong. The order book looks very, very good for the second half of the year. Key parameters that we're using for our D2C business like traffic and so on, look very, very strong. We're seeing Japan, Asia strong. We spoke about how quickly China has come back into tune once we were able to reopen the warehouse and the stores was strong. And U.K. continues to be strong also, thanks to a continued door expansion with some of our key accounts. And then we are very happy in -- especially also in Germany, which is a very large market for us, that the outlook is positive. And we're having a bit of a shift from more online to off-line shopping, and that's probably going to continue in the second half of the year, but this is also what's reflected in how we're looking at D2C versus wholesale business in our Q2 numbers. So I think you can very much expect a continuation of what you're seeing in these numbers.

The next question comes from the line of Michael Binetti from Credit Suisse.

Congrats on a great quarter and obviously a tough macro. I'm very happy to see it. Could you -- would you help orient us here with the model, I guess, just on the -- you mentioned 150 to 200 basis points of freight, sorry, in the third quarter and 50 basis points of FX. How much were those 2 components in 2Q? And then maybe how much are you thinking -- how much is in the full year for airfreight in particular? And I think your -- I think you're baking in an EBITDA margin of about 17% in the second half of the year, and that includes some level of unusual freight. Since we don't have a lot of history here with the model that I would consider to have occurred in a normal macro year to look at as we try to improve the model going forward, is 17% plus what you would consider normal profitability level for this business in the back half of the fiscal year?

Michael, thanks for the question. Just to shed a bit more light on this. So already in the second quarter, we used about half of the -- of airfreight than what we used in the first quarter. So you really see that our supply situation improves dramatically. And now for the third quarter, we really talk about a relatively low number, somewhere around CHF EUR 5 million to CHF 6 million that we are going to invest into airfreight in order to provide sufficient supply for the products that we mentioned, mainly the Cloudmonster and the Cloudrunner. And then for the fourth quarter, we expect that we are really in a normal ratio of airfreight to ocean freight to what we have also seen before the factory closures happened. On FX, we had -- we already had some headwind also in the Q2 numbers, and we expect that to continue which, as we outlined on the call, comes from the relatively strong U.S. dollar to the Swiss francs and then the relatively weak euro to the Swiss franc. So that's -- if this continues to be the case, then the impact is about CHF 3 million, CHF 4 million for the second half of the year, which makes the 50 basis points. And then I think on the EBITDA, clearly, the -- we talked about that we are a bit more conservative in growing our cost base. We reduced a bit how bullish we are on hiring new people. That doesn't mean we don't -- we don't hire anymore. We'll still grow significantly, but just a bit more cautious, to compensate some of those additional impacts on gross profit in order to maintain the 13.2% EBITDA target that we have given for the full year.

And I guess just to follow that, thinking a little bit bigger picture, what do you -- as we look out beyond '22 and hopefully get back to normal here, what do you think are some of the biggest unlocks coming up that we'll see on both the apparel side and moving the footwear assortment beyond the Cloud platform?

That's a very good question. The -- we're in the business of delivering innovation to the market. That's why consumers are drawn to the brand, and innovation for On has several aspects. It's mostly performance-driven. And for many people, performance translates into comfort. So that's mostly on the running side. We innovated on the design side and very, very big focus is also the sustainability side. And as we go through the second half of the year and into 2023, we're actually going to deliver on all these fronts, both in footwear and apparel. We have tremendous success now with products like the Monster and the Runner, which cater to a great underfoot cushioning experience for runners. And we're really catching up with the demand here. We're extremely happy with how Cloudeasy has launched where we have incorporated some of the learnings from actually the Icon program on making a less complex shoe that feel extremely comfortable, but it has a very positive impact on the environment and at the same time creating a new look that consumers gravitate to. And of course, we're seeing the success of [indiscernible] franchise continue. On the apparel side, we're doubling down on everything that's related to running, because that's where we're seeing consumers transition most easily from footwear to the apparel side. So the running bras have been a great addition. As I said on the call earlier, these items are now the top 10 in our own distribution. We added a type, adding a few more over the next 12 months. And then we have some first insulation pieces coming for the fall, always from a perspective of making very light and stretchable products. And then into spring '23, and we've announced it on the last call, we're going to innovate on CloudTec. We have a product coming called the that features CloudTec face, which is an evolution. So I might say a revolution of the Cloud, a different aesthetic that allows us to provide more cushioning in a slimmer package. So it's basically a combination of these things. I don't want to go through a long list of quality, but the key takeaways as we're bringing these products to market, they are already contributing significantly to our results. So they're very meaningful to our growth and to our revenues and our profitability.

The next question comes from the line of Alex Straton from Morgan Stanley.

Great. And congrats on another outstanding quarter, guys. I know you, guys, said you're slowing your hiring rate, which definitely makes sense in light of the uncertain macro, and it's what we've heard from another -- a number of peers as well. So I just wanted to clarify, will that be a slowing across the board or in specific areas? And then aside from the lower travel expense you mentioned, what other cost-saving levers can On pull on to kind of cushion profitability should the top line flow for the rest of the year?

Alex, Martin again. So as we said in the first half year, we hired -- we grew the team by about 350 team members to 1,500. You can expect a similar number for the second half, but we would have grown faster than that. And this is where we just become a bit more defensive, which is also always a good thing in such a high-growth environment, to slow down a little bit in order to also drive efficiency in the company and improve processes. We will not compromise on areas where we really talk to the customers. So especially in happiness delivery, that's where we will continue building the team to the size of the business that we expect, especially around the holiday season in the U.S. We are committed to continue investing in brand building, also in sports marketing, really in driving the brand. We also continue to invest in inventory in order to be in a position to fulfill the demand that we currently see. So we don't want to artificially cut the opportunity in that area. But there are always levers in all of the cost elements to slow down to react. Again, we are in a growth environment. So for us, it's not about taking something away, it's just about adding costs more cautiously in any area.

Great. That's super helpful. And maybe one quick follow-up. It seems like price increases are also a way to kind of maybe offset some of the headwinds. Can you just remind us how much you guys have taken price this year, what the plans are for the back half and then next year as well as if you've seen any consumer pushback. It seems like not for the results, but just any color there would be great.

Yes, we fully execute on what we announced in the past. So in the U.S., we have increased our prices on about 40% of our volume, mainly the Cloud, by USD 10. Another 20% of volume will be affected in the second half of the year and then another 20% to 30% in Q1 next year. And then Europe will see the price increases on about 80% of the volume in Q1 next year. So I think that we are in a good position also to offset some of the higher costs that we expect on the purchase prices for products. I think we have now a pretty good picture how that looks like also for spring next year. And we feel we're in a good position with the price increases that we have planned. At the same time, we continue seeing markets where we have strong pricing power and where we will use that and then selectively use price increases in some of those markets.

The next question is from the line of Jim Duffy from Stifel.

Very impressive 2Q results, and congratulations on the strong market reception of new products. I wanted to start by asking about the June strength that you highlighted. Some others have reported slowing trends in June. Can you speak to the composition of your June strength? Was that driven by D2C or increased volume of wholesale shipments? And was it led by any particular geography?

So the question is about the -- basically, the way we understand is about what Martin mentioned that the month of June was the strongest months in the history of On and basically where this growth came from, if I understand it correctly. So I think June is very much again in line with what you see in the Q2 number. It's not an outlier to the other months from a D2C and geographical split. So in the end, it was just kind of the highest level that we have achieved so far, with a very similar split. And I mean we have some seasonality in the business. So June has historically been a good month and a very important month to On. I think July is not a month that is very important and big. And so I think this is a bit where seasonality also plays a role.

Can I also ask about the D2C growth? Can you speak about how that splits between new customers versus repeat purchasers, perhaps given some context of the growth in the D2C customer file?

Yes, thank you. So I mean, we're not sharing the exact details on new customers and repeat customers. But we're watching it very, very closely because it's important to us when you look at the health of the business. And so when you look at the market like the U.S., which has experienced a very, very strong growth, so we added some -- definitely more new customers than we would add in a more mature market like Switzerland or like Germany, for example. I think one area that we're focusing very much and which will be important for us in the months and years to come as well is how can we provide very, very -- basically a very good brand environment to our consumers so that we can bring them back or keep them in the On environment. So we reduce our dependency also on paid acquisition, which is something we're consistently working on. And this is going to be -- expect that to be a focus over the months and years to come. And then I think we spoke about the metrics that we're using. So as said, retention is important. New customer acquisition is important. And conversion is important. And this is also how we're looking at brand versus categories. So we're looking very closely at some Google data on how the category is evolving online versus offline and how the brand is evolving there, and we really see that the own brands on all parameters continues to be very, very strong, and our conversion rates continue to be very, very positive in all different consumer segments that we're having.

The next question is from the line of Jonathan Komp from Baird.

Yes. I want to ask about -- Martin, I know you made the comment that you still have the ambition to be able to exceed the full year revenue guidance, which I believe is the typical approach, but I'm wondering if you can maybe just discuss some of the levers that you see to drive revenue growth, whether it's some of the distribution opportunity you have. I know you mentioned the e-commerce site coming up, or just any other drivers that you see as levers going forward.

Jon, happy to do so. I think if we look at the opportunities that we have to grow, be it at our guidance or above, then clearly the expansion and then also the continuous increase in sell-through with the key accounts that we have started to work with is a key driver and gives us a lot of levers. We spoke about new products that are launching in early Q3, like the CloudGo, which is another high-volume model. So the success of that will define some of the growth. The holiday season in the U.S., of course, is a very important element of our D2C business on an annual basis. We currently see, as Marc just explained, in the data that we are on track to continue growing strongly. But just [indiscernible] there can always go a bit stronger or weaker. If you -- just to put then also the second half year growth into perspective for the -- with the first half year of growth and why is the outlook be below our year-to-date growth, one important element, of course, is the season shift that we had in the first quarter, so where basically the first quarter growth was not like-for-like compared to last year. And then especially in the U.S., we have seen a strong uplift from the IPO since September. So we also run into a year-over-year effect there and, therefore, are a bit more cautious on the -- on the underlying growth rates of the U.S. business as of October. And so all of those elements are together is why we feel there's a lot of opportunity that we have. But at the same time, it's also necessary to plan long term, to look at this from a durable perspective and really plan for the long term and not chasing growth. So as I said, we will be ready to capture the demand if it's there, but we will not artificially chase it with things that are not in the benefit of the long-term thinking of the brand.

Yes, that's really encouraging. And then Caspar, if I could, I had 2 product follow-up questions. First on the Cyclon, any learnings that you've seen from the behavior from the consumers or any expectations around longer-term economics or profitability of that model as you prove it out over time? And then secondly, just on the Roger, any update on that franchise and the plans we should expect going forward?

Thanks, Jon. On Cyclon, I mean, in terms of consumer behavior, it's too early to tell literally. We have just received the shoe. What's very encouraging is that people like the product. But it's the learning curve to everyone. We're -- this is going to be a retention game and the management of churn going forward. So we also feel that these are areas that are going to positively benefit the way we look at our overall D2C business. We were definitely encouraged by the first reaction, and we're also thinking about introducing additional models within the Cyclon program within the next 12 years -- 12 months or so, both on footwear and apparel. And then, thanks for the question on the Roger. Obviously, a very important franchise for us. With the U.S. open coming up, actually, Roger came up with a very cool look-back flashback on the early part of his career and we're going to introduce a limited edition model. I can't say too much, but it's going to be a very exciting launch potentially, resulting in some lines outside of key retail stores. But these kind of things need to stay secret until the last minute. And then this mid-top model, along with other Roger updates, are going to hit the market as well this fall. So that people can go stylish through, hopefully, a nice fall anywhere in the world.

The next question is from the line of Jay Sole from UBS.

Caspar, Martin, can you give us a update on just the wholesale door count globally, sort of if you can give us an idea how much it's grown in 2Q over last year and sort of give us an idea of where you think it can go bigger picture. Maybe how some of the performance in the newer wholesale doors like a Foot Locker has been.

Our door count by the end of half year 1 is 8,612 doors. So -- and apparel is in roughly a quarter, a little bit over 2,000 of these stores, similar for accessories. We ended basically end of '21 with 8,364 doors. So that's the growth. So you're also seeing that a lot of the growth is actually coming from same-store growth and not just from adding door, which is very, very important to us. And expect a slight increase to continue for the second half of the year. But again, the growth will mainly come from in-store and growth and not from door expansion. On some of the key accounts, you're aware that we opened with DICK'S house and sports, we already opened in Q2. We already spoke about this. With public lands, then our expansion with Foot Locker is well underway. Our expansion with JD is well underway, and we'll continue to grow with them in their best Tier A doors, and we're closely watching sell-through. We're extremely happy. And with all 3 accounts, we're very happy with the consumers that we're getting in On product. You know that we want to run On -- that we want to win On runners feet, and that's why DICK'S is very, very important to us. And out of the gate On was extremely strong in the doors that we opened. So definitely, we'll continue to see a little bit of shift more towards key accounts also in the second half of the year.

The next question is from the line of Tom Nikic from Wedbush Securities.

I just wanted to ask about the gross margins. I think when you reported 3 months ago, you said that excluding airfreight, your gross margins would have been close to 60%. Is that the way we should also think about Q2 gross margin, excluding freight? And when we look at the back half of the year, I know you've highlighted you're little bit of in Q3 and some FX headwinds. But should we think about gross margins being higher year-over-year in the back half of the year?

Yes. So the -- if you exclude the airfreight, and we basically reconfirmed again the ability to go towards the 60%. Now in Q2, we also had a negative impact from FX. And therefore, this would be excluded as well in order to exceed the 60%. But for the second half of the year, it's exactly as you say. So 60% is -- we could consider the baseline and then the impact from airfreight comes on top. Traditionally, Q4 can even be a bit stronger due to the strong D2C sales that we will be seeing and expect to be seeing out of the holiday campaign, but that really depends on the share of D2C to wholesale in Q4, not in Q3.

Understood. Congratulations on all the momentum in the business.

The next question is from the line of Sam Poser from Williams Trading.

I wanted to know what the -- what -- you mentioned the headwinds of about 200 basis points for gross margin in Q3 and around 50 basis points in Q4. Can you give us what the offsets -- can you sort of give us a better line on where you expect the gross margins to be by quarter? Just to make it simple.

We don't give the guidance on gross profit. More indicative to what I just said. Basically, commentary is there against last year and the long-term expectation. And I also mentioned a bit the absolute impact that we are expecting from both the FX headwind as well as the higher airfreight.

But you would expect -- I was just confirming, and I have one other question after this. You expect gross margin in Q4 to be higher than it is in Q3 from a mix perspective, I gather from what you said. And that's from more [indiscernible].

Yes. And based on current expectations from the fact that we will not be using excessive airfreight as we have outlined for Q3 with those CHF 5 million to CHF 6 million additional spending for Cloudrunner and Cloudmonster.

Okay. Great. And then you mentioned -- you've been mentioning key accounts a number of times. Can you give us some indication on who you regard as key accounts at this time?

Thank you. In the end, it's about the size of an account. It's about how global the account is, the growth potential and also about the significance in account as in a specific consumer segment. So it's a bit difficult to answer this question, but again, if you look at for example, the U.S., we would have in our core running segment, we would have an account like fleet feet with an amazing partner to On and very, very important to us. If you look more in the outdoor space, and we've been working with REI for many years, and they're very, very good account for us. And then more on the performance all day side, we spoke about AD, we spoke about Footlocker. So I think those are some examples of key accounts, and you would have that for different geographies. And this is what we basically count as key accounts. And it's clear that they're all multidoor accounts. So a single door account will never be a key account.

So then lastly, if I may, the -- with the expansion that you're having within these key accounts, which also does impact the number of doors that you're in, are you -- how are you allocating product? Are you like -- like the smaller accounts, are you able to maintain inventory levels in the smaller accounts as you become more aggressive with the key accounts?

Yes. So when we look at product allocation, it's always about consumer. And so the question is, if you're speaking to a core runner, where does the core runner shop and what's the product that caters best to that community or to the core runner, and this is how we would allocate the product. So if you're looking into a hiking shoe, and then our best outdoor partners, independent of whether they are key accounts or independent small accounts, would have the highest level of priority. If you look at -- if you're a runner and you want to access our latest running product, then, again, we would look at the accounts that are very much specialized in running, all our own specialty partners that we're working with, but also accounts like Fleet Feet. And then if you're more looking at a product for your all day use, you might have a JD or Foot Locker being prioritized. And the only account or channel that basically gets a highest priority in all different categories is our own D2C because we feel very much that with our own D2C website and stores, we cater to all the communities that we're targeting and, therefore, they should find all the respective products there as well.

The final question comes from the line of Abbie Zvejnieks from Piper Sandler.

Do you have an update on your market share in specialty run? And then how does this differ in North America versus Europe? And then secondly, I guess who is the new consumer that you think you're reaching with products like Cloudmonster? And can you comment on which brands or maybe which styles do you think On is gaining share from in that specialty run channel?

Thanks, Abbie. So with the Cloudmonster and Cloudrunner we're really reaching maybe some people that didn't [indiscernible] because the out too light. There may be not enough cushion. And with these 2 models, we're able to provide underfoot protection and unparalleled comfort to your very, very average run that maybe wouldn't consider themselves around but they run for fitness. They run to stay in shape. Maybe they're a little bit older and I tell myself in that same target group where you go past 40, running becomes harder. And now we're seeing with this success of these 2 models that we've almost left out this market segment. And part of the U.S. success is also explained by that there's just a lot of these kind of runners in North America, and we're now able to offer them a product as well. And over to Marc on the market share.

So when we're looking at market share, I think we are in most of our own specialty doors in the key markets such as Germany or [indiscernible] amongst the top 3 brands. And we're seeing in many doors, for example, in the U.S., still a growth rate of above 50%. And this is all growth that comes from same-store because run specialty is definitely the area where we already have the highest distribution, highest density. So we continue to gain share. We continue to grow much stronger than the channel is growing and also looking at the order book and looking at some of the product innovations that Caspar already spoke to, we were very positive that consumers will continue to benefit from that.

Ladies and gentlemen, this concludes the Q&A session. The conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.