Performance shoe brand On told analysts this week that the dollar’s weakness against its native Swiss franc is holding back blockbuster figures.

The Zurich-based company has seen rapid growth so far this year—it reported a sales spike of more than 50% for the April-to-June quarter compared to the same period in 2022.

On expects that momentum to nudge its sales upward to at least CHF 1.76 billion ($2 billion) for 2023, up from its forecast in May. 

Yet despite the optimism, one of the factors keeping the company from further raising its outlook for the full year is the negative impact of foreign exchange, with the dollar dragging down its figures. 

“Over the last month, we have seen a persistent strength of the Swiss franc versus nearly every other currency around the globe,” On’s CFO and co-CEO Martin Hoffman said during the company’s earnings call Tuesday.

The impact, Hoffman laid out, is that if the dollar had stayed comparable to the Swiss franc the brand would have upped its guidance to CHF 1.78 billion.

Instead, the weakness of the dollar has cost the brand “about CHF 20 million” for the second half of the year.

“Just to put things in a bit in perspective,” Hoffman continued, “if you talk about the CHF 1.76 billion and convert it into US dollars today, we would talk about CHF 2 billion [in] US dollar sales.”

However, Hoffman reasoned: “The strength of the brand and the momentum become even more evident when considering the current FX environment.” 

The Swiss franc has gained more than 7% against the dollar in the last year, while the brand’s success has rapidly gained steam in the States.

Against the Euro, the Swiss franc has also strengthened 0.2% in the last 12 months. These changes have influenced On’s view of the year ahead. 

“We really continue to have the strong growth aspiration in the guidance, but it’s a bit overshadowed by the FX,” Hoffman told Bloomberg.

A spokesperson at On told Fortune that although the foreign exchange rates sway the figures reported by the company in Swiss francs, it won’t affect On’s priority to expand in the U.S.

Booming U.S. popularity

The volatility of foreign exchange aside, On has reaped the benefits of its U.S. expansion through e-commerce and direct-to-consumer channels.

The brand’s availability in retail stores like Dick’s Sporting Goods and Foot Locker has made it possible to reach more consumers and compete with existing brands like Nike and Adidas.

On noted it was seeing “very, very strong sales” through some of its multi-brand retail channels such as Dick’s.

As a result, the Swiss company plans to increase its presence in several more stores across the U.S. and Europe, as well as the Middle East and African regions.   

“We are only in a bit over 50 Dick’s stores out of the 800 that they have,” Hoffman told Bloomberg. “So there’s a huge untapped market potential.”

On has forecasted a growth rate of 44% for the second half of the year, thanks to its positive growth trajectory, even as foreign currency rates continue to weigh on some of its markets. 

On’s share price has increased by over 50% since the start of 2023, outperforming many of its peers in the sporting industry by a big margin. 

What makes On special?

On was launched in 2010 before Federer invested an undisclosed sum in the company in 2019. The brand differentiates its products courtesy of “pods” in the shoes that work like cavities—designed to absorb impact with each step.

The shoes became widely popular among exercise enthusiasts, bringing On to profitability within four years of its launch. 

The company went public in August 2021, valued at over $11 billion upon listing at a time when demand for sports-related items was surging following COVID lockdowns.

As of 2021, half of the Swiss shoemaker’s business came from the U.S. 

On has since expanded its product line and presence across markets, setting itself apart not just with the backing of a well-known sportsman but also by pushing for sustainability as part of its business.

The company launched a resale site in September to reduce waste, offering second-hand items to consumers looking for marked-down versions of On’s shoes.

“Our life as a public company has been an incredible continuation of our journey, marked by significant progress and huge achievements,” David Allemann, the company’s cofounder, said in a statement.