Jefferies analyst Randal J. Konik thinks Nike Inc.’s turnaround is showing more than just a few green shoots — and that could stall On’s growth.

“Nike’s Vomero Plus is outperforming On’s Cloudsurfer Max in both consumer interest and retail sell-through,” he noted in a reports, adding that Google Trends shows “materially higher search volume for Vomero, signaling stronger buzz.”

According to Konik, Nike’s new running product is also selling out on Dickssportinggoods.com, reinforcing its broader appeal. “This momentum aligns with Nike’s commentary around a strengthening order book heading into the holiday season,” the analyst concluded.

So how does this impact On Holding AG?

Nike has ramped up product innovation, particularly in running, and is correcting its wholesale distribution strategy. Both initiatives will present a “stronger competitive challenge” for On, both in sell-throughs and sell-in dynamics. That could potentially slow On’s momentum in key markets, Konik concluded in a report on Thursday.

The Jefferies analyst noted that much of On’s “past wholesale growth came while Nike pulled back” its in-store presence. Nike’s order book is trending higher as retailers get excite about it new releases. And with On’s U.S. door expansion opportunities becoming limited, Konik believes that retailers may decide to allocate more of their open-to-buy budgets to Nike’s products. That, in turn, would leave fewer incremental orders for On.

“In short, retail buyer enthusiasm — and dollars — could pivot back to Nike, constraining On’s future sell-in growth,” Konik said.

On posted second quarter earnings results on Tuesday, reporting a net loss of 40.9 Swiss francs, against net income of 30.8 million Swiss francs a year ago. Net sales grew by 38 percent to 749.2 million Swiss francs, from 567.7 Swiss francs a year ago. The company also raised 2025 guidance following is strong performance for the quarter and what it saw as continued momentum in the first weeks of the third quarter. On also raised guidance in the first quarter following an earnings report that was ahead of expectations.

Following On’s earnings report, Konik was an outlier among Wall Street analysts, downgrading shares of On to “Underperform” from a “Hold” rating in May after the running brand posted first quarter results. He reasoned that 2025 could mark the peak in On’s sales growth rate as U.S. door count expansion slows and sell-in moderates in 2026 as retailer orders flow back to Nike. In addition, On’s high pricing and narrow product assortment limits its total addressable market, the analyst concluded.

According to Konik’s On report, a true lifestyle brand has meaningful footwear and apparel sales. Nike has it, while On does not. In addition, “On’s apparel products are highly technical and very expensive, which prevents the category from becoming large in out view,” another factor that limits the brand’s total addressable market, he concluded.

Wall Street’s projecting earnings growth of 20 percent and up, but Konik’s not convinced. He noted that On’s fixed costs are rising, which can raise execution risk. “If growth moderates and expenses climb, On may struggle to meet these lofty forecasts, putting pressure on its valuation,” Konik said.

Meanwhile, Nike’s Vomero 18 has already surpassed the $100 million mark since its February launch, paving the way for a Nike turnaround in the running category.

In fact, Nike’s confidence of its comeback saw company CEO Elliott Hill tell investors in the firm’s fourth quarter earnings conference call in June that the worst was over. “From here, we expect our business results to improve. It’s time to turn the page,” Hill said. Three specialty retailers told Footwear News last month that they too believe that Nike running is on the comeback trail.