STRATEGY

Frank Sluis

After his first earnings report as CFO of Swiss running brand On, Frank Sluis said he was delighted by how broad growth was in the second quarter; the Asia-Pacific region accounted for more than 20% of global net sales, and the 16-year-old company’s global direct-to-consumer business grew 26% YoY.

“We have reached a younger audience, and now the consumers—basically the demographic 34 years and below—is now a third of our customer base, and that’s super exciting,” Sluis told CFO Brew.

Sluis came to On in May from Netherlands-based food retailer Ahold Delhaize, where he was CFO of its Europe and Indonesian regions. Even though he lacked specific experience in footwear and athletics, he said, his previous work centered around delivering a premium product via a premium brand. And “premium means that you need to exceed the expectation of customers every single day,” he added.

On running shoes broke into the American market in the Covid era, when stir-crazy quarantiners picked up the activity. What also plagued footwear companies around that time, though, was how to balance priorities between wholesale and direct-to-consumer sales. As a fast-growing and newer entry into the US’s $101 billion footwear market (as of 2025), Sluis said he’s “mak[ing] sure that the business can support that scale.”

How On handled higher air freight tariffs and a promotion-heavy sportswear market.—DL

      

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TAXES

The Washington Post/Getty Images

Revenue from IRS audits took a nosedive between fiscal years 2024 and 2025, due largely to the staff reductions the agency experienced in 2025, according to a report by an IRS watchdog.

Examinations revenue fell 35% between FY 2024 and 2025, from $10 billion to $6.5 billion, the US Treasury Inspector General for Tax Administration (TIGTA) found. During the same period, the number of new audits of individual tax returns dropped by 30%.

The results should not be surprising, given that 2025 was, let’s say, a turbulent year for the IRS.

The agency lost about 36% of its examinations and collections staff between FY 2024 and January 10, 2026, TIGTA data shows. Over that time period, the division went from 27,217 employees to 17,517. The IRS’s examinations and collection staff is still about 13% smaller than it was in FY 2023, before the agency used $3.38 billion in Inflation Reduction Act (IRA) funds to hire more personnel. “The downstream effects of these reductions are likely to become more apparent over time,” TIGTA wrote.

A House committee is calling for another $1.4 billion in cuts to the IRS enforcement budget.—CV

      

AI SECURITY

Morning Brew Inc, Photos: Sean Gallup/Getty Images, Michael M. Santiago

Earlier this month, OpenAI said it solved one of the Millennium Prize Problems, a set of advanced mathematical conundrums. Answering the equation earned the company the $1 million prize that goes with it. Just one issue: It cost OpenAI $15 million in tokens to solve the darn thing.

That’s a perfect encapsulation of the problem with AI economics: High costs have yet to yield high rewards. Industry leaders are arriving at the realization that they may never reach profitability, and they’re beginning to freak out. This week we may have learned how they plan to deal with it: Freak everyone else out instead.

Repeat after us: regulatory capture. As anyone blindsided by their bill for AI tokens will tell you, it’s not cheap to run advanced models. Frontier startups like OpenAI are burning cash at an alarming rate—the company brought in $13.1 billion in net revenue last year, but posted a net loss of $38.5 billion—which is why they’re sprinting to raise money in an IPO.

Don’t forget that earlier this week the Financial Times reported that Anthropic is telling investors its gross margins are above 80%—if you ignore expenses like training its AI models, which, you know, seem like they might be important for the AI company.

Brew Markets asks: Are the top model developers really worried about AI safety?—MR

      

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market forces

Francis Scialabba

Today’s top finance reads.

Stat: $7.16. That was the per-pound average retail price of ground beef in August, according to the US Bureau of Labor Statistics. The 0.6% increase from July has some restaurants shrinking their hamburger patties and trying cheaper cuts of meat. (Bloomberg)

Quote: “Father Time always wins. He has, however, been generous with me. He has given me the opportunity to see Berkshire reach a point where I am more confident than ever about what lies ahead.”—Warren Buffett, in a letter announcing his decision to step down as chair of Berkshire Hathaway (CNN)

Read: Jolin Ellison and her husband, Oracle co-founder and one of the richest people in the world Larry Ellison, have emerged as powerful donors behind University of Michigan athletics. (the Wall Street Journal)

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