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 [27][5] - Adjusted gross margins expanded by over 90 basis points year-over-year, surpassing 50% for the first time [5][29] - 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 [33][34] Business Line Data and Key Metrics Changes - Cleaning category net sales increased by 12.4% year-over-year to $593 million, with significant contributions from robotics and extraction products [27][28] - Cooking and beverage category net sales grew by 6.3% year-over-year to $437 million, driven by the Ninja Luxe Cafe espresso [28] - Beauty and home environment category saw a remarkable increase of 56.7% year-over-year to $189 million, with broad-based growth across fans, air purifiers, hair care, and skin care [27][28] Market Data and Key Metrics Changes - Domestic net sales rose by 9.5% year-over-year to just over $1.1 billion, while international net sales increased by 25.8% year-over-year to $530 million [27][28] - The U.K. market experienced a strong growth of 26.7% year-over-year, reaching $237 million [27][28] - Latin America saw broad-based triple-digit growth, reflecting strong consumer engagement and point-of-sale metrics [21][22] 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 [11][22] - Recent product launches, such as the Ninja Fireside 360 and Shark Cryo Glow, exemplify the company's commitment to innovation and solving consumer problems [12][13][14] - The company aims to achieve 50% of its business from international markets in the short to mid-term [56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform the market despite challenges, citing a strong pipeline of innovation and consumer engagement [46][40] - The company raised its full-year guidance, expecting net sales growth between 15% and 15.5% for 2025 [37][23] - Management highlighted the importance of execution and adaptability in navigating the current challenging business environment [40][24] Other Important Information - The company has successfully navigated supply chain disruptions and tariff challenges while maintaining profitability [23][24] - The transition to a direct-to-consumer model has strengthened relationships with retailers and expanded product offerings [21][22] - The company is investing in localized content and influencer marketing to enhance brand presence globally [11][10] Q&A Session Summary Question: Outlook for category growth for holiday and into 2026 - Management expressed confidence in the robust pipeline of new innovations and the ability to continue outperforming the category into 2026, emphasizing the importance of reinventing existing categories [44][46] Question: Utilization of the new design center - The new design center in New York is expected to enhance innovation and attract top talent, complementing existing teams in Boston and London [50][52] Question: International growth and market opportunities - Management aims for 50% of the business to come from international markets, with strong growth expected in the U.K. and other regions [56][54] Question: Inventory levels and demand - The company reported healthy inventory levels heading into the holiday season, with no overstock issues [61][62] Question: Price elasticity and market positioning - Management noted that they have cautiously taken price increases while maintaining a strong value proposition for consumers [64][65] Question: Impact of retailer inventory levels on business - Management indicated good retailer support and confidence in demand generation, despite some inventory challenges [70][72] Question: Update on international market transitions - The transition from third-party distribution to self-distribution will be gradual, with a focus on maintaining relationships with distributors for smaller retailers [80][79]