SharkNinja(SN) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net sales increased by 14.3% year-over-year to $1.63 billion, marking the 10th consecutive quarter of double-digit growth [5][29] - Adjusted gross margins expanded by over 90 basis points year-over-year, surpassing 50% for the first time [5][31] - Adjusted EBITDA grew by 20.7% year-over-year to $317 million, representing a 19.4% adjusted EBITDA margin, up 100 basis points compared to the prior year [35][36] - Adjusted net income increased by 24% year-over-year to $213 million, or $1.50 per diluted share [36] Business Line Data and Key Metrics Changes - Cleaning category net sales rose by 12.4% year-over-year to $593 million, with significant contributions from robotics and extraction products [30] - Cooking and beverage category net sales increased by 6.3% year-over-year to $437 million, driven by the Ninja Luxe Cafe espresso [30] - Food preparation category net sales grew by 11.9% year-over-year to $411 million, with the Ninja Slushie gaining popularity [30] - Beauty and home environment category saw a remarkable increase of 56.7% year-over-year to $189 million, reflecting broad-based growth across various products [30] Market Data and Key Metrics Changes - Domestic net sales increased by 9.5% year-over-year to just over $1.1 billion, while international net sales grew by 25.8% year-over-year to $530 million [29] - U.K. net sales surged by 26.7% year-over-year to $237 million, while Mexico also performed exceptionally well [29][23] - Latin America experienced broad-based triple-digit growth, indicating strong consumer demand [23] Company Strategy and Development Direction - The company is focused on a three-pillar growth strategy: expanding into new categories, growing share in existing categories, and international expansion [12][24] - Recent product launches include the Ninja Fireside 360 outdoor heater and fire pit, Shark FlexStyle hair care products, and Shark Cryo Glow skincare devices, showcasing the company's commitment to innovation [13][15][16] - The company aims to achieve 50% of its business outside the U.S. in the short to mid-term [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform the market despite ongoing challenges such as supply chain disruptions and tariffs [4][25] - The company raised its full-year guidance, expecting net sales growth of 15% to 15.5% and adjusted net income per diluted share in the range of $5.05-$5.15 [39] - Management highlighted the importance of maintaining strong retailer relationships and consumer trust as key drivers for future growth [9][10] Other Important Information - The company has successfully navigated a challenging business environment, achieving significant market share gains and maintaining profitability [4][24] - The transition to a direct-to-consumer model has been beneficial, particularly in Mexico, leading to increased retailer participation [23][55] - The company is on track to become a domestic filer in 2026, having failed the foreign private issuer test [60] Q&A Session Summary Question: Outlook for category growth for holiday and into 2026 - Management expressed confidence in their innovation pipeline and ability to continue outperforming the category, with a strong roadmap for new products [44] Question: Utilization of the new design center - The design center in New York is expected to enhance innovation and attract top talent, complementing existing teams in Boston and London [46] Question: International growth and self-distribution transitions - Management indicated a smooth transition strategy, utilizing both direct and distributor models to optimize market reach [58] Question: Inventory levels and demand - The company reported healthy inventory levels heading into the holiday season, feeling confident about meeting consumer demand [51] Question: Price elasticity and market positioning - Management noted that they have cautiously taken price increases while maintaining a strong value proposition for consumers [53] Question: Impact of retailer inventory levels on business - Management highlighted strong retailer support and confidence in their innovation, despite some inventory challenges [55]