Operator: Your next question comes from the line of Aubrey Tianello of BNP Paribas.
Aubrey Tianello: I wanted to follow up on gross margin. I think to get to your guidance of at least 59% for the year implies 4Q gross margin flat year-over-year given that it should be a bigger DTC quarter relative to 3Q. Just wondering what some of the offsets are that would prevent 4Q gross margin from being higher than 3Q gross margin?
Martin Hoffmann: Yes. As I mentioned, if the situation continues to be favorable as in the — as we had it in the moment and in the last weeks and months, then we clearly see an upside potential to that. At the same time, like in the past, we want to be prudent on our guidance. But at the moment, we clearly see that the brand is strong and that’s reflected in the strong margin.
Aubrey Tianello: Got it. And just as a quick follow-up, since the last earnings call, as you called out in your prepared remarks On athletes have had a lot of high profile wins. Could you talk about the impact some of these victories have on brand awareness and brand momentum and what effects you’re starting to see that you can maybe share with us?
Caspar Coppetti: Thanks a lot for your question. Look, athlete wins are very important. If you look at Hellen winning New York now after Boston, that mainly adds to credibility in the running space. This is not necessarily a prime TV moment where our brand awareness would go through the roof. That’s more the case with tennis. And what we’ve seen definitely in the numbers when Ben Shelton reached the U.S. Open semis and played against Djokovic, he was the talk of the town and a lot of people were introduced for the first time on mainstream TV in social media to the On brand. And this moment is probably comparable to a moment when we announced the Roger partnership, where all of a sudden the mainstream name was associated with On and just drove brand awareness. So the athletes and especially linking athletes to brand campaign, to product will be a key cornerstone of our strategy going forward.
Operator: Your next question comes from the line of Abbie Zvejnieks of Piper Sandler.
Abbie Zvejnieks: Congrats on the marathon, Martin. I was watching, I was just a spectator, but it was just really encouraging to see the number of On’s on runners’ feet just compared to last year really accelerated. Just can you give any color on segmentation within wholesale as you continue to roll out new products, which varies from something more technical like Cloudeclipse to more lifestyle like Cloudtilt and how you plan to really segment the product?
Marc Maurer: Yes. We’re going to give you an example first on consumer segmentation at New York Marathon. So if I run the marathon, I would run in the Cloudboom and Martin, what was the shoe you were running in?
Martin Hoffmann: The Cloudstratus.
Marc Maurer: So you see the segmentation is clearly working on runners’ feet in the marathon. No, I think we — it’s been very important for us that over the last 2 years, we were able to, especially in the running space, build franchises that are resonating extremely well and tier them very, very clearly. And I think we’ve we’ve spoken about that a lot of times. So we are starting with which consumer in which store did they actually go into and then kind of which products are resonating with those consumers. And if we take a Cloudboom that has been tiered very, very strongly around run specialty, for example, if we take a Cloudstratus, that’s a product that is only available in run specialty and on our D2C engine.
And then you have bigger franchises like the Cloudmonster or the Cloudrunner that tier down to more accounts. And we will continue that strategy. So expect us to bring kind of to continue to build On Running and the running space around these franchises. And then within the franchises have a certain tiering depending on the level of the product. And I think what we can already share is that we will, for example, introduce a new product next spring that is called the Monster Hyper. So this is an athlete version of the Cloudmonster. So the Cloudmonster Hyper would then be available mainly in D2C and in run specialty and the Cloudmonster is available in broader channels like DSG, and this is how we’ll continue to execute on the strategy.
Abbie Zvejnieks: Great. That makes a lot of sense. And then just one more on the commentary on second half wholesale growth is like the rate that we should think of going forward. I think that is kind of a reported basis close to 25%. So are you saying on like a reported basis or a constant currency basis, that’s how we should think of wholesale growth going forward?
Martin Hoffmann: So more on a constant currency basis, but then considering the impacts that we mentioned earlier from the store closures in Europe.
Operator: Your next question comes from the line of Cristina Fernández of Telsey Advisory Group.
Cristina Fernández: Congratulations on a good quarter. Following up on that question on wholesale, can you update us on what the wholesale count was at the end of 3Q? Any changes to where it will be at the end of the year? And how should we think about wholesale door growth for next year in light of the Europe closures relative to the mid-teens rate [ I estimate ] we’ve seen in the first half of this year?
