SharkNinja, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights:

• Mark highlighted strong net sales growth of nearly 16% y-o-y, higher gross margins, and adjusted EBITDA growth of ~33% y-o-y. Operating expenses as a % of net sales decreased by over 200 basis points.
• Global demand for SharkNinja products is strong, with domestic net sales up ~14% y-o-y and international up over 20% y-o-y.
• Product innovation: Newer categories like Ninja SLUSHi and Ninja Luxe Cafe are performing well. Fan business, including FlexBreeze Go and TurboBlade, is growing. Beauty segment with Shark CryoGlow is expanding globally.
• International growth: Europe, Latin America, and other regions are seeing growth, with plans to expand direct-to-consumer sites and penetrate new geographies.
• Marketing initiatives: Sponsorship in Apple original film F1, movie, and upcoming relaunch of direct-to-consumer site.

Segment Performance:

• Cleaning category: Net sales increased 8% year-over-year to $501 million, with robotics and extraction businesses standing out.
• Food Preparation category: Net sales grew 53% year-over-year to $405 million, driven by the Ninja SLUSHi and CREAMi.
• Cooking and Beverage category: Net sales decreased 4% year-over-year to $366 million, offset by Ninja Luxe Cafe but impacted by air fryer and outdoor grill subcategories.
• Beauty and Home Environment category: Net sales increased 25% year-over-year to $173 million, led by air purifiers, fans, and Shark CryoGlow.

Guidance:

• For FY 2025, net sales expected to increase between 13% and 15% (up from prior 11%-13%).
• Adjusted net income per diluted share expected in the range of $5 to $5.10 (up from $4.90 to $5).
• Adjusted EBITDA expected to be in the range of $1.1 billion to $1.12 billion, representing 16% to 18% year-over-year growth.
• CapEx guidance reaffirmed at $180 million to $200 million, but no longer pointing to the higher end of the range.

Risks:

• Global tariffs pose challenges, with China facing a 30% rate, Vietnam 20%, and other Southeast Asian countries 19%, impacting supply chain and P&L.
• Supply chain complexities and potential operational disruptions remain a concern.

Question and Answer: Q: Brooke Roach asked about being fully on offense in the back half and tariff commentary on gross margins.

A: Mark discussed balanced growth in domestic and international with new product launches. Patraic explained improved clarity on tariff assumptions affecting guidance.

Q: Randy Konik inquired about talent acquisition and F1 marketing.

A: Mark talked about hiring key executives for innovation, marketing, and beauty segments. Patraic mentioned co-branding on the website for better consumer experience.

Q: Alex Perry asked about domestic growth upside and back-half drivers.

A: Mark noted strong domestic demand and upcoming beauty product launches. Patraic highlighted beauty marketing hires as a driver.

Q: Steve Forbes asked about retail partner conversations and category expansion.

A: Mark discussed positive conversations with retailers globally and plans for 50% of sales from outside the U.S. over the next few years.