SharkNinja Q4 2024 Earnings Report

SharkNinja EPS Results

• Actual EPS: $1.20
• Consensus EPS: $1.26
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: N/A

SharkNinja Revenue Results

• Actual Revenue: $1.79 billion
• Expected Revenue: $1.61 billion
• Beat/Miss: Beat by +$174.61 million
• YoY Revenue Growth: N/A

SharkNinja Announcement Details

• Quarter: Q4 2024
• Date: 2/13/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, February 13, 2025
• Conference Call Time: 8:30AM ET

SharkNinja (NYSE:SN), a product design and technology company, engages in the provision of various solutions for consumers worldwide. It offers cleaning appliances, including corded and cordless vacuums, including handheld and robotic vacuums, as well as other floorcare products comprising steam mops, wet/dry cleaning floor products, and carpet extraction; cooking and beverage appliances, such as air fryers, multi-cookers, outdoor and countertop grills and ovens, coffee systems, carbonation, cookware, cutlery, kettles, toasters and bakeware; food preparation appliances comprising blenders, food processors, ice cream makers, and juicers; and beauty appliances, such as hair dryers and stylers, as well as home environment products comprising air purifiers and humidifiers. The company sells its products through traditional brick-and-mortar retail channels and e-commerce channels, distributors, and direct-to-consumer channels under the Shark and Ninja brands. SharkNinja, Inc. was incorporated in 2017 and is headquartered in Needham, Massachusetts.

SharkNinja Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Good morning and welcome to SharkNinja's Fourth Quarter twenty twenty four Earnings Call. My name is Harry and I'll be your operator. All lines are currently in listen only mode and there will be an opportunity for Q and A after management's prepared remarks. I would now like to hand the conference over to Arvind Bhatia, Senior Vice President, Investor Relations. Thank you.

[Operator]

Please go ahead.

[Arvind Bhatia, SVP - Investor Relations at SharkNinja]

Good morning, and welcome to ShotKinda's fourth quarter twenty twenty four earnings conference call. Earlier today, we issued our Q4 earnings release, which is available on the company's website at ir.sharkninja.com. A replay of today's webcast will also be available on the site shortly after the call. Before we begin, let me remind you that today's discussion will include forward looking statements based on our current perspective of the business environment. These statements involve risks and uncertainties and actual results may differ materially.

[Arvind Bhatia, SVP - Investor Relations at SharkNinja]

For more details, please refer to our earnings release and the company's most recent SEC filings, which outline factors that could impact these statements. The company assumes no obligation to update or revise forward looking statements in the future. Additionally, during the call, we will reference non GAAP financial measures, which we believe provide valuable insight into the underlying growth trends of our business. You can find a full reconciliation of these measures to their most directly comparable GAAP measures in the earnings release. A quick reminder, we divested our APAC business in Q3 of last year, so it's no longer included in our year over year comparisons this quarter.

[Arvind Bhatia, SVP - Investor Relations at SharkNinja]

Joining me today are our Chief Executive Officer, Mark Perokos and Chief Financial Officer, Patrick Regan. Mark will start by providing a business update followed by Patrick, who will review our Q4 and full year 2024 financial results and share our outlook for 2025. Mark will then offer some closing remarks before we open the call to questions. With that, I will now turn it over to Mark.

[Mark Barrocas, Director & CEO at SharkNinja]

Thank you, Arvind. Good morning, everyone, and thank you for joining us today. Our fourth quarter results were exceptionally strong. Once again, our global teams knocked it out of the park with incredible top and bottom line performance. Net sales grew an impressive 30%.

[Mark Barrocas, Director & CEO at SharkNinja]

Adjusted EBITDA was up 32%, building on the 71% growth we delivered in Q4 last year. We're delivering rapid and highly profitable organic growth at scale. What excites me even more than our strong Q4 results is the breadth of our performance. Across each of our four key categories cleaning, cooking, food prep and the newly branded beauty and home environment. We delivered very strong double digit growth.

[Mark Barrocas, Director & CEO at SharkNinja]

In North America, net sales increased 22% year over year. Our international business continued to be a standout. Adjusted net sales grew 49% on top of last year's impressive 62% growth in the fourth quarter. It's been an amazing quarter and I'm so proud of how our teams continue to consistently deliver and drive sustainable growth. Looking at full year results, 2024 was a remarkably strong year.

[Mark Barrocas, Director & CEO at SharkNinja]

We grew adjusted net sales 32% and that's on top of 15% growth last year. We drove adjusted EBITDA growth of 32%, building on 39 growth last year. This means over the past two years, we've achieved a compounded annual growth rate of 24% in adjusted net sales and 35% in adjusted EBITDA, extending our long track record of success. We have also expanded adjusted EBITDA margins by nearly 300 basis points over the past two years, while strategically investing and fueling the next wave of innovation and geographic expansion. We're building a strong foundation for scalable organic growth.

[Mark Barrocas, Director & CEO at SharkNinja]

We added over $1,300,000,000 in adjusted net sales growth this year, bringing our total to 5,500,000,000 We increased adjusted EBITDA by more than $230,000,000 surpassing $950,000,000 This strong performance highlights the power of our profitable growth flywheel as our healthy revenue growth, strong gross margins and productive reinvestments into our business fuel our market share gains, new category expansions and geographic growth. Our performance also speaks to the strength of our team and a cultural mindset that recognizes and reinforces a desire to learn and grow and a shared drive to be the very best at what we do. Together as a team, we embrace the shared mindset that all success is only temporary. We're driven by a deep seated confidence in our problem solving abilities and a desire to achieve the extraordinary. With this powerful shared mindset at the core of our company, we're strengthening our competitive edge and accelerating our progress in a large and rapidly expanding market.

[Mark Barrocas, Director & CEO at SharkNinja]

2024 has been our best year yet, but I believe this is just the beginning. Looking ahead, the first quarter of twenty twenty five is off to a solid start. We're not just managing uncertainty, we're on the offense, executing against the well defined strategy of consumer focused innovation, strong demand creation and a highly diversified portfolio of products, geographies and channels. As a result, we're in a great position to drive strong double digit growth for the full year. Our three pillar growth strategy is the foundation of our organic growth engine.

[Mark Barrocas, Director & CEO at SharkNinja]

This strategy focuses on expanding into new and adjacent categories, increasing market share in existing categories and driving international growth. Disruptive consumer problem solving innovation is what SharkNinja excels at. Our investments in R and D the past two years have filled the pipeline with exciting new ideas. We plan to launch 25 new products this year across both new and existing categories. We'll be bringing to market a steady flow of new products each quarter, some of which have already launched in 2025.

[Mark Barrocas, Director & CEO at SharkNinja]

The first pillar of our growth strategy, expanding into new and adjacent categories, continues to be a key driver of success. SharkNinja now participates in 36 new subcategories, both inside and outside the home, all of which have been developed internally. We're committed to entering at least two new subcategories each year. In 2024, we exceeded this goal by launching into four new subcategories: coolers, fans, frozen drink appliances and skincare. We believe that each of these subcategories has a strong growth potential for us in 2025 and beyond.

[Mark Barrocas, Director & CEO at SharkNinja]

Ninja Flushy, our professional grade frozen drink maker has been a hit with consumers. Fueled by its viral popularity, Slushie has already generated more than 500,000,000 social media impressions to date. Consumer engagement continues to grow. We've secured multiple branded partnerships for Slushy. These collaborations are helping us reach new audiences, creating unique experiences and sustaining social buzz.

[Mark Barrocas, Director & CEO at SharkNinja]

Slushie will start rolling out in The UK and other international markets later this year. With Ninja CREAMY leading the ice cream category and slushie gaining momentum, we're on track to become the global destination in frozen trees. With Shark Flex Freeze, we created an entirely new category with our first indooroutdoor cooling system. Its debut season was a tremendous success and established a solid foundation for us to build upon. Looking ahead to 2025, we have exciting innovation planned for this new category.

[Mark Barrocas, Director & CEO at SharkNinja]

We're gearing up to launch several new SKUs and we'll be expanding this category into additional international markets. With the launch of our first FDA cleared product, Sharp CryoGlow, we're bringing MedSpa quality skincare into the home, delivering dermatologist optimized treatments for acne, fine lines and wrinkles. Designed for a broad audience across all age groups, Cryo Glow leverages red and blue LED, infrared technology and under eye cryo cooling to rejuvenate and refresh the skin. Developed with scientists, dermatologists and wellness experts, it is the first of a kind solution offering high performance clinically tested results at an accessible price point. CryoGlow has already outperformed sales expectations in its initial launch market, The U.

[Mark Barrocas, Director & CEO at SharkNinja]

K. And Mexico. And just last week, we introduced Cryo Glow in The U. S. Through our direct to consumer platform with a planned rollout to key beauty retailers in Q2.

[Mark Barrocas, Director & CEO at SharkNinja]

Press and influencer feedback for the product has been great and we're excited by the innovation roadmap opportunities that the skincare category affords us moving forward. Our 2024 entry into the cooler category with Ninja Frostwalt was a resounding success despite limited supply and distribution. In 2025, we're poised to further disrupt and expand the category. We plan to broaden our SKU lineup, scale distribution and enter international markets, enabling greater product availability during the pivotal spring and summer selling season. Our second growth pillar focuses on increasing market share within existing categories.

[Mark Barrocas, Director & CEO at SharkNinja]

A key strength of our business continues to be our ability to innovate and reinvent our core foundation. It's important to emphasize that our base business remains strong with healthy revenue, stable average selling prices and solid gross margins. Growth in new categories and international expansion is critical, but it's equally important that our core business remains robust. This strength is not incidental. It's the result of continuous investment in innovation and reimagination.

[Mark Barrocas, Director & CEO at SharkNinja]

Within cleaning, our engineering and product teams have brought fresh ideas to the category to spark new growth. Our Shark Power Detect line showcases our most advanced cleaning technology yet across robots, cordless and corded vacuums. These products deliver exceptional cleaning performance and raise the bar for automation in the industry. We've also broadened our hard floor cleaning lineup with the launch of the Shark Steam Pickup and the Shark Hydra Duo hard floor cleaners. The hard floor segment represents an exciting growth opportunity for us and adds further diversity to our overall cleaning business.

[Mark Barrocas, Director & CEO at SharkNinja]

All of this innovation is paying off as we delivered another strong quarter of nearly 20% growth in the cleaning category. Last September, we took another big step in innovating the cooking and beverage category with the launch of the Ninja Crispy. This portable cooking system reimagines cooking by putting the power of a full size air fryer into the palm of your hand. It delivers consistently crispy results with incredible versatility and a compact design. Crispy is all about meeting consumers' growing demand for convenience.

[Mark Barrocas, Director & CEO at SharkNinja]

While we already lead the air fryer market, Crispy lets us rethink, redefine and reinvent the category. It opens up new opportunities, positions us for continued growth and strengthens our market share in the air fryer space. Crispy is already performing well in The U. S. And we're gearing up to launch it in additional markets later this year.

[Mark Barrocas, Director & CEO at SharkNinja]

Just in time for grilling season, we're launching NinjaFlexflame, our first large format outdoor cooking system with unmatched versatility. Until now, consumers had to choose between a grill, a smoker, a roaster, a griddle or a pizza oven. FlexFlame eliminates that trade off, seamlessly transforming between all five. Powered by our proprietary Cyclonic HeatIQ technology, precision heat distribution and wood fired capabilities, it delivers faster, more flavorful results. But we're not just entering the large format outdoor cooking market, we're redefining it.

[Mark Barrocas, Director & CEO at SharkNinja]

This is a big definable global category with significant upside. We're confident that FlexFlame will excite consumers in an industry that has seen soft demand post COVID. We identified a significant global white space in coffee and espresso. With Ninja Lux Cafe, we became the first to introduce a product designed not just to capture market share, but to expand the entire category. In The U.

[Mark Barrocas, Director & CEO at SharkNinja]

S, espresso household penetration remains very low. We took a consumer first approach recognizing that American coffee drinkers want more than just a single shot of espresso. They want large format drip coffee, cold brew, iced coffee and versatility in their at home brewing experience. By addressing these preferences, we're giving consumers what they want rather than asking them to compromise. And we're doing it at a much more accessible price point.

[Mark Barrocas, Director & CEO at SharkNinja]

In Europe, where the espresso market is highly competitive and mature, consumer preferences are shifting. Drip coffee, iced beverages and globally inspired drinks are becoming more popular. Our strategy is tailored to these evolving trends, allowing us to disrupt the category differently across regions. By leveraging these insights, we've created a product that meets distinct regional needs, while driving both category growth and market share expansion. This is a standout example of how we identify white space opportunities and capitalize on them with highly differentiated consumer centric innovation.

[Mark Barrocas, Director & CEO at SharkNinja]

While Ninja CREAMi continues to expand globally, with its first holiday season in Germany, The Nordics and Brazil, we're not slowing down. We're strategically advancing this winning category with breakthrough innovation. We're thrilled to introduce Ninja Swirl, the next evolution in at home frozen treats. The Ninja CREAMY allows consumers to turn just about anything into ice cream. And Ninja Swirl takes it a step further, bringing the full ice cream shop experience to the home with scooping and swirling capabilities.

[Mark Barrocas, Director & CEO at SharkNinja]

We listened closely to the passionate creamy community and developed the swirl incorporating real user feedback. We introduced the fit button to cater to the growing demand for high protein frozen desserts and a soft serve function to deliver an even more versatile experience, all at the touch of a button. This is a prime example of how we innovate with our consumers, not just for them. With a wait list of over 90,000 and more than 60,000,000 social media impressions, it's clear that consumer anticipation for Swirl is already high. Our innovation strategy isn't about incremental launches.

[Mark Barrocas, Director & CEO at SharkNinja]

It's about creating new categories, disrupting mature categories and continuously reinventing our foundational categories. Our performance in the beauty and home environment category reflects our commitment to disruptive innovation. FlexStyle had another very strong quarter. In Q4, we soft launched FlexFusion, our next generation air styler. FlexFusion is designed to tackle a major consumer concern, achieving hot tool styles without the damage caused by heat.

[Mark Barrocas, Director & CEO at SharkNinja]

In Q2 this year, we'll roll out FlexFusion into major beauty retailers, bringing this breakthrough technology to a wider audience. The full impact of this innovation is yet to be realized and we're confident it will redefine expectations in the beauty space. We're tapping into the growing demand for multifunctional beauty tools, strengthening our presence in the beauty category and setting the stage for even more growth. Innovation at SharkNinja isn't just about launching new products. It's about reshaping industries and setting new consumer expectations.

[Mark Barrocas, Director & CEO at SharkNinja]

We create entirely new categories like creamy, slushy, cryo glow and flex freeze. We disrupt and expand major markets with game changing solutions like carpet expert, luxe cafe, frost vault and flex flame. And we never stop improving, building on our successes year after year with advancements like Power Detect, FlexFusion, Crispy and Swirl. This relentless drive for innovation keeps us ahead and fuels our long term growth. Next, I'll focus on our third growth pillar, expanding into international markets.

[Mark Barrocas, Director & CEO at SharkNinja]

Our international business has achieved significant scale, generating $1,700,000,000 in net sales outside of North America in 2024. A key strategic focus in Q4 was to win at Christmas, particularly in Continental Europe and Latin America. Based on retailer feedback, we delivered on that goal, securing major wins in these markets. European retailers saw substantial growth from SharkNinja this past holiday season, positioning us for continued expansion into 2025. Our international strategy can be viewed in three key segments.

[Mark Barrocas, Director & CEO at SharkNinja]

First, the U. K. Remains our largest international market and our strategy here is focused on diversification. While Q4 was and we expect Q1 will continue to be impacted by an intentional shift in our innovation cycle, prioritizing North America, new product launches in Q2 should drive a strong rebound. The fundamentals of our UK business remain solid with significant untapped product categories and continued expansion into new retail channels, underscoring our confidence in long term market potential.

[Mark Barrocas, Director & CEO at SharkNinja]

Second, while we've made significant strides, we're still in the early stages of expansion across Continental Europe. Germany and France are scaling rapidly, but our strategy extends far beyond these core markets. We see tremendous opportunities in Spain, Poland, Benelux and The Nordics, where consumer demand and retail support continue to strengthen. Our brands are gaining traction across social media and retail partnerships validating our momentum. The engagement from top European retailers underscores their confidence in our future trajectory, not just our past performance.

[Mark Barrocas, Director & CEO at SharkNinja]

Third, Latin America. Building on our Q4 success, we continue to gain market share and solidify retailer partnerships in Latin America. These regions present long term opportunities and we remain focused on measured investments and sustainable growth. Overall, our international business is thriving. With a 50% increase in adjusted net sales in 2024, we're executing a strategic vision that balances short term wins with long term scalability and expansion.

[Mark Barrocas, Director & CEO at SharkNinja]

As we move through 2025, we remain committed to driving sustained growth across all key categories. Product innovation is a critical pillar of our business, but equally important is great storytelling and creating consumer demand. We've executed exceptionally well on this front, establishing ourselves as one of the largest brands on social media. Our strategic investments in talent partnerships, experiential events and multi channel advertising have forged authentic connections with consumers, driving excitement and activating the user generated content flywheel. This combination of best in class product innovation and world class brand storytelling is not easily replicable.

[Mark Barrocas, Director & CEO at SharkNinja]

It's not just about launching a great product, it's about creating an ecosystem of demand that compels consumers to seek out our products at their preferred destination. Our marketing investments are delivering significant returns, fueling global momentum and brand affinity. Before our products even launch in new markets, we often see substantial pre launch demand. This underscores the strength of our global consumer demand and the borderless nature of our brand appeal, which is also accelerating international markets. I'll now hand it over to Patrick who will walk you through our fourth quarter and full year financials and share our 2025 outlook.

[Mark Barrocas, Director & CEO at SharkNinja]

Patrick?

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Thank you, Mark, and good morning, everyone. I'm thrilled to share our outstanding 2024 results and outlook for 2025. As Mark said, in Q4, we achieved nearly $1,800,000,000 in net sales, up 30% year over year. Adjusted EBITDA increased 32% to $291,000,000 We delivered a 30 basis point increase in our adjusted EBITDA margin, all while making substantial investments to fuel our growth, including driving international expansion and advancing our supply chain diversification initiatives.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Net sales in North America were up 22% to nearly $1,200,000,000 International net sales grew 49% to more than $600,000,000 driven by triple digit growth in Germany and France. For the full year, adjusted net sales and adjusted EBITDA increased 32%. Adjusted EBITDA margin was 17.2% consistent with prior year. This was supported by a two twenty basis point improvement in adjusted gross margin and a comparable rise in operating expenses as we continued reinvesting in our growth initiatives. Looking at performance by category, all four of our major product categories achieved strong double digit growth during the fourth quarter.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Net sales in the cleaning category increased 20% to $648,000,000 continuing the strong momentum we have seen in this category throughout the year. We saw broad based strength across cordless, corded, hard floor, deep carpet cleaning and robots. Net sales in the Cooking and Beverage category increased 19% to $597,000,000 driven by the ongoing strength of heated cooking, particularly in the international markets and impressive growth in the Espresso category. Net sales in the food prep category accelerated, increasing 89% to $342,000,000 This growth was fueled by the continued success of our creamy ice cream makers and the remarkable performance of our newly launched Slushie Frozen Drink Maker, which has become a viral hit. Finally, our Beauty and Home Environment category, which we used to call other, saw an impressive 31% growth in sales climbing to $200,000,000 This growth was fueled by continued strong demand for our hair care products, including FlexStyle, air purifiers and the early success of Cryo Glow, our new skincare product.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Now let's move to gross profit. In the fourth quarter, adjusted gross profit increased 31% to $855,000,000 or 47.8% of net sales as we drove 40 basis points of adjusted gross margin expansion over the prior year. This expansion was primarily driven by our cost optimization efforts, partially offset by unfavorable impact of tariffs and geography mix. Thanks to our strategic focus on supplier diversification, competitive bidding and value engineering, we've successfully delivered more than 200 basis points of adjusted gross margin improvement this year on top of nearly 700 basis points improvement in the previous year. In terms of operating expenses for the quarter, we continue to be on the offense as we expand into new countries, categories and diversify our manufacturing base.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

While these investments impact profitability in the short term, we view them as critical long term investments that enable us to put more distance between SharpNinja and our competition and to position us exceptionally well for 2025 and beyond. R and D expenses increased 26% to $87,000,000 or 4.9% of sales compared to $69,000,000 or 5% of net sales in Q4 last year. We continue to invest in headcount to drive new product and category innovation, support geographic expansion and to generate global consumer insights. Our new product pipeline for 2025 is well set and we have a strong line of sight to products for 2026 and beyond. Sales and marketing expenses increased 29% to $425,000,000 or 23.8 percent of net sales compared to $330,000,000 or 23.9% of net sales in the year ago period.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

As with previous quarters, this increase was driven in part by our strategic investment in advertising and personnel to support our exceptionally strong new product rollouts and our expansion into new markets. This year over year increase was also driven by higher delivery and distribution costs from increased order volumes, mainly in our direct to consumer business. General and administrative expenses declined to $123,000,000 representing 6.9% of net sales compared to $124,000,000 or 9% of net sales in the same period last year. This reduction was primarily driven by a legal settlement and lower transaction related costs associated with our separation and distribution from JS Global in 2023. These savings were partially offset by increased legal fees, technology investments and other expenses.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Our GAAP effective tax rate was 22% in the fourth quarter compared to 45.4% in the prior year and in line with our expectations. Adjusted net income for the fourth quarter was $198,000,000 or $1.4 per share compared to $132,000,000 or $0.94 per share in the prior year, reflecting growth of 48% on a per share basis. Adjusted EBITDA for the quarter increased more than 32% to $291,000,000 or 16.3% of net sales compared to $219,000,000 or 15.9% of net sales in the prior year. I now want to turn our attention to the balance sheet and cash flow. While our industry leading strength in product innovation, supply chain and marketing set us apart from our competitors, our robust margins, sustained profitability and strong balance sheet further widens our competitive moat.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

With low relative debt and strong cash flow, we are able to act with world class speed, ensuring we can swiftly capitalize on opportunities and turn challenges into competitive advantages. Recent examples include our strategic pre build of inventory and the rapid diversification of our manufacturing base. We move fast and our financial strength is a key competitive advantage. As of the end of fourth quarter, we held a cash balance of $364,000,000 with total debt outstanding of $780,000,000 resulting in a net leverage ratio of 0.4 times, the lowest since our public listing. Over the past year, we generated nearly four fifty million dollars in operating cash flow and maintained nearly $500,000,000 in available credit, ensuring ample liquidity.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

At quarter end, our inventory totaled $900,000,000 reflecting a 29% increase compared to Q4 of the prior year. We continue to strategically leverage our balance sheet to proactively build inventory, helping to mitigate potential P and L impacts from new tariffs. As a result, we expect inventory levels to remain elevated through the first half of the year before normalizing in Q3. Importantly, we remain confident in both the quality and the composition of our inventory. I want to emphasize that our efforts to diversify production outside of China remain on track with nearly all U.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

S. Volume expected to shift outside of China by the end of twenty twenty five and approaching 90% completed by the end of Q2. This has been a deliberate and proactive decision that we took fully aware of the complexities involved. It has been a challenging journey, but we are proud of the progress we've made. This was not the easy path.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

It was the road less traveled and we took it with a long term strategic vision in mind. We committed to diversifying our supply chain early, making difficult yet necessary decisions that are now delivering tangible results. The proactive steps we took in response to tariff challenges underscore our ability to navigate complexity and execute with resilience. We chose to move decisively and the progress we are seeing today validates that decision. We remain confident in our approach and committed to ensuring a more agile, resilient and diversified supply chain moving forward.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Next, I'll turn to our outlook for 2025. Our 2025 guidance highlights our strong momentum, continued investments in key growth initiatives, while managing ongoing macroeconomic uncertainties as a global company. The tariff situation, of course, remains dynamic. However, it is important to note we have proactively accounted for the impact of the recently announced 10% China tariffs in our full year guidance. For the full year 2025, we expect net sales to increase between 1012% adjusted net income per diluted share to be in the range of $4.8 to $4.9 an increase of 12% to 15% year over year adjusted EBITDA to be in the range of $1,070,000,000 to $1,090,000,000 representing growth of 13% to 15% year over year net interest expense to be flat to twenty twenty four our GAAP effective tax rate to be approximately 24% to 25 and capital expenditures to be between $180,000,000 and $200,000,000 for the year.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

For some additional context, as you know, we typically do not provide quarterly guidance. I do though want to offer key directional insights on how we see the year shaping up. We expect revenue seasonality this year to be relatively consistent with historical trends. We also expect the first half profit contribution to full year results to be consistent with prior years. However, we anticipate stronger profitability in Q2 than in Q1 due to three factors.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

First, we continue to make targeted investments in both marketing and supply chain diversification. In our supply chain, as we continue to strategically shift U. S. Production outside of China, we anticipate elevated spending through Q1 and lessening as we move through the balance of the year. Second, as we transition Mexico from a distributor model to a direct market, we are repurchasing distributor inventory, which triggers a onetime revenue reversal.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

By Q2, we expect this shift will drive both strong revenue growth and enhanced margins, further strengthening our business in the region. Third, U. K. Market dynamics. The shift of Easter related shipments into Q2 will create a Q1 timing issue.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Also, we intentionally prioritize North America demand for key launches like Crispy, Slushie and Luxe Cafe in Q4 twenty twenty four and Q1 twenty twenty five. As we turn into Q2, these new product launches will accelerate growth, reinforcing our position of strength in The UK market. We wrapped up 2024 with outstanding results and strong execution across our three growth pillars. Looking ahead to 2025 and beyond, we remain highly confident in the trajectory of our business. Our focus on consumer driven innovation is stronger than ever, and we're excited about our market position and the amazing products we're launching.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

All of this sets us up for impressive growth, both on the top and bottom line next year and beyond. Now, I'll hand it back to Mark.

[Mark Barrocas, Director & CEO at SharkNinja]

Thanks, Patrick. SharkNinja's amazing fourth quarter and full year results really show how far we've come in driving sustainable, profitable organic growth with our innovative high performance products. As we look toward 2025 and beyond, we've never been more confident. Our commitment to consumer driven innovation is thriving and it's fueling incredible growth potential. We have built a resilient world class team with a proven ability to pivot seamlessly, iterate rapidly and drive disruptive consumer problem solving innovation regardless of external challenges.

[Mark Barrocas, Director & CEO at SharkNinja]

We're thrilled about our strong market position and the fantastic products we're bringing to the table. With our $120,000,000,000 addressable market growing, we're seeing so many exciting opportunities, whether it's entering new categories or strengthening our global brand presence. We believe the future continues to be incredibly bright for Shark Ninja and we can't wait to keep delivering innovative solutions that continue to positively impact our consumers' lives. This concludes our prepared remarks and I'll now turn it over to the operator to kick off Q and A. Operator?

[Operator]

Thank you. Our first question today will be from the line of Brian McNamara with Canaccord. Please go ahead. Your line is open.

[Brian McNamara, MD - Senior Analyst Consumer at Canaccord Genuity - Global Capital Markets]

Hey, good morning guys. Congrats on the excellent results and thanks for taking the question. One thing I think the market grapples with is what does a normal growth year look like for you guys. I know you've grown at a very impressive 20% CAGR for I think seventeen years now, but that seems like a a high bar on a $5,500,000,000 sales base in a slow growth industry. This time last year, I believe you guided 8% sales growth at the midpoint and just finished at plus 32%, which is tremendous.

[Brian McNamara, MD - Senior Analyst Consumer at Canaccord Genuity - Global Capital Markets]

So what drove that large delta outside of extreme conservatism from the outset? And how should we rank order the buckets of growth this year, whether it be 2025 innovation, scaling 2024 innovation like the Frostfall, new distribution, international, etcetera? Thank you.

[Mark Barrocas, Director & CEO at SharkNinja]

Yes. Thanks for the question, Brian. Look, in terms of answering your first question, what does normal growth look like? I mean, you tell me. You know, as you said, we've historically grown at 21% a year.

[Mark Barrocas, Director & CEO at SharkNinja]

You know, we've said that we believe that we are a long term double digit growth company. You know, we guided initially for 2025, '10 percent to 12%. When you look at the growth in 2024, it came across all three major pillars. I mean, we gained share in existing categories. We drove tremendous innovation in those existing categories.

[Mark Barrocas, Director & CEO at SharkNinja]

We expanded into lots of new categories I pointed out and we delivered 50% growth in our international business. And we came out of for the fourth quarter, growing the fourth quarter '40 '9 percent in our international business. So it's not as if our growth internationally has kind of had scaled down through 2024 and actually held fairly constant. So as we look to '25, I mean, let's start with international. As I said in my prepared remarks, you know, I think we are still very much in the early innings regarding our expansion in Europe.

[Mark Barrocas, Director & CEO at SharkNinja]

We had a great Christmas selling season. I two weeks ago, I was in Europe, I met with the CEO of Euronex, I met with the CEO of FNAK Doherty in France, I met with the CEO of Sainsbury. These retailers are putting big bets behind us in '25. They want us to aggressively expand into more of their markets across Europe. You know, it's not just Germany and France, but as I pointed out of Spain, it's The Nordics, it's Benelux, it's Poland.

[Mark Barrocas, Director & CEO at SharkNinja]

We're expanding in Turkey, we're expanding in The Middle East, you know, or Latin America growth. I think as we get into Q2 will really start accelerating, you know, once we get through the transition of the distributor market in Mexico. So, you know, number one is I think, you know, we expect to see continued strong growth out of the international business. On the new category front, we expect to launch, you know, at least two new categories in 2025. You'll hear more about that as we go through the quarters.

[Mark Barrocas, Director & CEO at SharkNinja]

You know, when you think about our 2024 new product launches or new category launches, we generated quite a small amount of revenue in '24 on many of those products. Products like the Crispy and the Slushie and the Luxe Cafe and our Power Detect robots mainly only launched in The United States and Canada. So there'll really be a significant full year rollout, you know, of the 2024 innovation. We've got a great pipeline of new products in '25. You know, we just launched in The US last week, the Shark Trial Blow after we received FDA approval for the product.

[Mark Barrocas, Director & CEO at SharkNinja]

You can see the excitement on social media and PR from places like cosmopolitan and allure. Our Creamy Swirl product launched two days ago. Amazing response and feedback from that product. You'll start to see a big rollout as we get into next month, with our Ninja Flex Flame, the first large format outdoor cooking product that we're bringing to market. So, you know, I think that when you get through the year this year, you're gonna, you know, look back and say, Wow, I mean, a lot of really interesting new categories and products that Sharknidja expanded into.

[Mark Barrocas, Director & CEO at SharkNinja]

And then as I said in

[Mark Barrocas, Director & CEO at SharkNinja]

my prepared remarks, I mean, it all is underscored by a strong base business. I mean, our base business is healthy, our core cleaning business, our core lending business, we've got a lot of innovation, you know, that has come in '24 in the core that will have a full year impact this year, we've got a lot of 25 new products that will drive business in the core. So I think you should expect, you know, as you saw in '23 and '24 from us, that, you know, this three pillar growth strategy, we might toggle based on where the growth is coming from across those three. But in general, I think we've got some very strong exciting pathways for organic growth for our business in 2025.

[Brian McNamara, MD - Senior Analyst Consumer at Canaccord Genuity - Global Capital Markets]

Great. Appreciate the color. Thanks

[Brian McNamara, MD - Senior Analyst Consumer at Canaccord Genuity - Global Capital Markets]

Mark.

[Operator]

Our next question today will be from the line of Randy Konik with Jefferies. Please go ahead. Your line is open.

[Randal Konik, Managing Director at Jefferies & Company Inc]

Yes. Thanks so much and good morning everybody. I guess Mark maybe kind of dig a little deeper into the DTC, I got the cryo glow on that I guess that channel. And it seems as if the brands of Shark and Ninja are getting more and more awareness and there's just more of a want by the consumer to kind of shop your website directly. So maybe give us some perspective over the long term kind of what are your hopes around giving the consumer the opportunity to kind of shop everywhere.

[Randal Konik, Managing Director at Jefferies & Company Inc]

Obviously, you're doing a great job on the wholesale side with your partners around the world. But maybe give us some perspective of kind of your hopes of how you kind of want to expand that direct channel distribution, any plans for kind of changing up the website or not across Shark and Ninja? Just give us some kind of flavor there would be very helpful. Thanks.

[Mark Barrocas, Director & CEO at SharkNinja]

Yes, yes, sure, Brandy. So, you know, D2C grew faster than the rest of the business in 2024. We expect that D2C will grow faster than the rest of the business in 2025. Now that said, you know, we still hold true to our model, which is we want to be relevant wherever the consumer chooses to shop for our products. So that is paramount and that's unwavering in our business.

[Mark Barrocas, Director & CEO at SharkNinja]

Now that said, I mean, I think, Randy, I'll give you the example of Swirl that I think is so interesting. You know, before we launched the product, we had 70,000,000 impressions on social media as we seeded the product to a select group of influencers, we had a waitlist of 90,000 people for the product. And so we do feel that kind of launching our products on direct to consumer allows us to kind of control the distribution early on. It allows us to get immediate feedback from consumers as they start using the product. So I think you should expect to see the first thirty to forty five days of many of these big, you know, viral product launches to be done through direct to consumer, and then to expand out, you know, into our retail partners.

[Mark Barrocas, Director & CEO at SharkNinja]

Now, that said, you know, I think what we're also recognizing is that there's a real opportunity for us to have a broader merchandising assortment in direct to consumer. You know, colors that are only available to us on our direct to consumer site, Special configurations. We've got to make direct to consumer a unique destination for the consumer to buy our products by having something, you know, unique and special for them. In terms of the upgrade, we've announced that we are going to be transitioning to Salesforce in the end of the third quarter of this year. We're going to go live in North America with that at the end of the third quarter.

[Mark Barrocas, Director & CEO at SharkNinja]

We'll go live in Europe with that likely in the first quarter of next year. We think it's going to provide an incredibly better shopping experience, research experience, service experience for the consumer. We're partnering tremendously with Salesforce, and their agent force technology, you know, to be able to bring that. We've got relationships, you know, all the way up to to market at Salesforce, the CEO. And, so we're excited about what that's going to bring to our direct to consumer business.

[Mark Barrocas, Director & CEO at SharkNinja]

But the goal here is still to keep a balanced, you know, omni channel strategy, but to really make sure that direct to consumer, you know, creates a unique destination for the consumer.

[Randal Konik, Managing Director at Jefferies & Company Inc]

Super helpful. Thanks, guys.

[Operator]

Our next question will be from the line of Brooke Roach with Goldman Sachs. Please go ahead. Your line is open.

[Brooke Roach, Vice President, Equity Research at Goldman Sachs]

Good morning and thank you for taking our question. I was hoping you could speak to the most important areas of operating expense reinvestment in 2025 and your philosophy of potential flow through of any outperformance that you might see. As we get through the supply chain diversification mid year, what level of cost reduction might we see? And can that enable a faster rate of operating margin expansion in the back half? Secondly is just a follow-up.

[Brooke Roach, Vice President, Equity Research at Goldman Sachs]

Patrick, we appreciate the color regarding some of the timing shifts and one time items that are impacting the first half. Could you help us quantify the Mexico Distributor inventory impact to revenue and the rough size of what you expect the Easter timing shift to be? Thank you.

[Mark Barrocas, Director & CEO at SharkNinja]

Yes, Bruce. So I'll take the first part and then turn it over to Patrick. Look, the supply chain costs are going to be elevated through the first half of the year with sizable investment in the first quarter. I mean, we are working very, very hard, to try to move as much product out of China as quickly as we possibly can. And we remain on track here for 90% of our U.

[Mark Barrocas, Director & CEO at SharkNinja]

S. Production to be able to be produced outside of China by the end of Q2. From a leverage standpoint, as we go through the year, Brooke, I think there's two pieces. You know, one, you're going to see the supply chain, you know, year on year expenses decrease versus prior year. I think you're going to see us be able to leverage some of our sales and marketing expenses.

[Mark Barrocas, Director & CEO at SharkNinja]

And I think you're going to see some leverage on the G and A side as well. I mean, we've made a lot of investments in people and infrastructure in 2024. As we get into the second half of the year, you'll start to see us anniversary a lot of those, and not seeing the growth, that we had seen in 2023 and 2024 from an expense side. Now as it relates to our ability to be able to put that into, EBITDA margins, I mean, I think we want to look at kind of what happens on the tariff side, what happens on the, you know, global side, you know, related to trade. And I think we'll have more information on that as we get through Q1 and into Q2.

[Mark Barrocas, Director & CEO at SharkNinja]

For right now, I think we're planning a conservative, you know, EBITDA will slightly grow faster than revenue. But I think there's a lot of uncertainty out there in the market right now. And I think it's prudent for us to guide with what we have right now and update you with more information as we get, you know, further on in the year.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Yeah. And then, Brooke, on on the question around Mexico, thanks, thanks for asking that one. So I think, you know, first of all, to frame it up, you know, as you know, we always kind of lead with the consumer first in terms of doing what's, what's best for the consumer. And as you heard me say in some of the prepared remarks as well, you know, we're very adept at making, you know, the hard decisions. And so Mexico was, you know, one of those, it's the right thing for the consumer, but it's like right, what time do you do that?

[Patraic Reagan, Chief Financial Officer at SharkNinja]

And so, you know, what we decided in terms of, you know, the timing of that was Q1 of this year was the, was the best time to actually execute on that. And so the reasons for that is, you know, number one, we get, the marketplace through the holiday, selling season in Q4, which is the most important, and then we set ourselves up to be a direct business as we get into Q2, Q3, Q4, and beyond, and then we're off to the races. So, you know, if we look at it through that experience, improving the consumer experience, it's why we've taken the decision when we did. As far as quantifying it, I'm not going to give you, you know, the exact quantification, but how you can think of it is and why it's headwinds is, one, you know, we're reversing out revenue that we've already sold in, so that's number one. Two is we're not selling in additional revenue during the quarter.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

And then three, we're not capturing the upside of, you know, going from a distributor business to a direct business. But as we get into Q2, Q3, Q4, we'll see the acceleration happen in Mexico, which is, you know, an exceptionally important market for us as we enter Latin America. And then from a long term standpoint, we see our opportunity in Mexico to be at least $400,000,000 over the course of the next few years or so.

[Brooke Roach, Vice President, Equity Research at Goldman Sachs]

Great. Thank you so much. I'll pass it on.

[Operator]

Thank you. And as a reminder, please limit yourselves to one question and then reenter the queue for any follow ups. The next question today will be from the line of Andrea Teixeira with JPMorgan. Please go ahead. Your line is open.

[Andrea Teixeira, Analyst at JPMorgan Chase]

Thank you for the question. Congrats to the whole team on the results. A question on sales and then a follow-up on margins. First on the top line, Mark, you gave some phasing for The U. K.

[Andrea Teixeira, Analyst at JPMorgan Chase]

And you and Patrick on the Mexico side. Can you also talk about the phasing in The U. S? And overall, if we put all the pieces together, would you say Q1 is SUGARO is within your guide of double digits or perhaps more on a high single digit, more muted? And a clarification of the size of max squeeze sales, I understand the aspiration you just mentioned, if I understood it correctly, it's $400,000,000 but obviously, it's running much lower than that.

[Andrea Teixeira, Analyst at JPMorgan Chase]

If you can perhaps tell us what would be the shift. And then the clarification on margins, obviously, you had an impressive number for even for 2025 if you take everything together for the back end of the year. Can you help us in terms of like gross margin, phasing and EBITDA, sizing the tariff impact? And I really do appreciate that you had included in there and how we should be thinking, therefore, the underlying margin that the business is running at this point? Thank you.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Yes. Thanks, Andrea. I think that's about 15 questions into one, so good work. From a top line standpoint, let's just start with the full year. And so from full year standpoint, from a domestic business, we're thinking and guiding in the high single digit range.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

From an international standpoint, roughly high teens, so you can kind of think through the lens of our 2x growth international versus domestic. As it relates to Q1 particularly, we're in the high single digit range overall from a Shark Ninja, Inc. Standpoint. So I think, you know, contextually, think through that lens. As it gets into gross margin phasing, you know, it's another great question.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

So the best way I can kind of, you know, guide you through this is that, in Q1, Q1 would be the low point in terms of, you know, margin expansion, or better say contraction through the year. And then as we go through Q2, Q3, Q4, we'll see, margin accretion building as, we continue to move, you know, production out of China and put into some other initiatives that we've been building around as it relates to improving margins in the face of our growing business. So, what you can think of is kind of low point Q1 progressing up through the balance of the year.

[Andrea Teixeira, Analyst at JPMorgan Chase]

And if I can squeeze the size of Mexico, we'd appreciate all the bridges.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Well, Andrea, as I said to Brooke earlier, we're not going to provide exact guidance in terms of what the impact of Mexico is. But I would just say, over the course of the long term, we think it's at least $400,000,000 market for us.

[Andrea Teixeira, Analyst at JPMorgan Chase]

Great. Thank you so much, OpExcel, and congrats again.

[Operator]

Our next question today will be from the line of Alex Perry with Bank of America. Please go ahead. Your line is open.

[Alexander Perry, Director, Equity Research at Bank of America]

Hi. Thanks for taking my question here and congrats again on the strong quarter. I guess just on the new product roadmap for 2025, Mark, what products are you most excited about? What could a new product like ChiroGlor or Swirl add to the top line if they're successful? And then as you think about sort of the typical waterfall of new launches, like how much do they sort of scale year two versus year one?

[Alexander Perry, Director, Equity Research at Bank of America]

And then just quickly on channels, any color on how you're thinking about adding new wholesale channels, in particular, going deeper into sporting goods? Thanks.

[Mark Barrocas, Director & CEO at SharkNinja]

Yeah. So I'll take the last one first. I mean, I think that, we will expand more into sporting goods in The U. S. We'll have more SKUs to sell them in 'twenty five.

[Mark Barrocas, Director & CEO at SharkNinja]

We're going

[Mark Barrocas, Director & CEO at SharkNinja]

to be expanding our cooler lineup. We're going to be expanding our outdoor fan lineup, outdoor cooking. So I think sporting goods is something that you'll see more SKU placement, more expansion in. The beauty retailers, you know, you'll see hair expansion in '25, you'll see skin expansion in '25. So I think those are two.

[Mark Barrocas, Director & CEO at SharkNinja]

Grocery, I think grocery is something that we think, you know, there's expansion opportunity with selected products for us, as we start to move through the year. And, we're starting to get a lot of, inquiries. For example, you know, a Walmart wants to double expose a slushie from us, and put it in both the appliance section as well as the grocery section. We're getting, you know, similar type of feedback from other types of grocery retailers. So, so that gives you just a little bit of a snapshot from, from the retailer landscape.

[Mark Barrocas, Director & CEO at SharkNinja]

It's hard to generalize and give you like a set algorithm or how much could it generate. I mean, there's 25 new products. What I could say is that a lot of our new products last year launched quite late in the year. So obviously, you'll get the full year impact this year. It will generally take on some of these new products about twelve months before we scale them globally.

[Mark Barrocas, Director & CEO at SharkNinja]

So, as an example, the slushy won't launch in Europe and The UK until Q2. You probably won't have a full rollout until we get into Q3, you know, with the European retailers that we want to play. So, you know, it could take a year to kind of roll out one of those big products. You know, something like Swirl, has a huge growth potential for us this year. Cryo Glow, you know, has huge growth potential.

[Mark Barrocas, Director & CEO at SharkNinja]

If we just look at what we did in eight weeks in the holiday season in UK and Mexico, you know, Cryo Glow presents a $100,000,000 plus opportunity for us, this year. So, I think, again, it's hard to kind of generalize it across the lineup. But I would say that, you know, we're entering some big definable categories. We're getting great retailer support. You know, it's taking some time for our supply chain to scale up and for distribution to scale up globally.

[Mark Barrocas, Director & CEO at SharkNinja]

But I think as you start to get into Q3, you know, you'll really start to see the impact of the 24 products. And then the 25 products, you're going to start to see us rolling those out, you know, a little bit quarter by quarter. So, there'll be some other rollouts as we get later into Q1 now. There'll be more rollouts as we get into Q2. So I think you should just expect this kind of continuous flow of new products.

[Mark Barrocas, Director & CEO at SharkNinja]

And what to me is exciting about it is that, you know, the consumer's really getting behind it. I mean, when we tease some of this, you know, they're signing up for the waitlist, they're engaging with us on social media. And we've got, you know, kind of this, global consumer fan base that is really excited to hear about what's new from Shark or Ninja.

[Alexander Perry, Director, Equity Research at Bank of America]

Thank you. Just one quick follow-up. I think there's a little confusion on the 1Q sort of commentary that you gave, Patrick. Did you say that 1Q revenue should be high single digit percent? Just wanted to clarify that for people.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Yes. That's what we're guiding to.

[Alexander Perry, Director, Equity Research at Bank of America]

Perfect. Very helpful. Best of luck going forward.

[Operator]

Our next question today will be from the line of Rupesh Puri with Oppenheimer. Please go ahead. Your line is open.

[Rupesh Parikh, Senior Equity Research Analyst at Oppenheimer & Co. Inc.]

Good morning and thanks for taking my question and congrats on a great quarter. Just from a I guess a high level perspective, as you look at your business this year from a category and consumer perspective globally, are you planning for a similar backdrop to what you saw in 2024 or maybe improvements or maybe a more difficult backdrop? So just some high level thoughts on consumer category dynamics globally.

[Mark Barrocas, Director & CEO at SharkNinja]

Rupesh, you're referring to overall market?

[Rupesh Parikh, Senior Equity Research Analyst at Oppenheimer & Co. Inc.]

Yes, that's correct. Yes.

[Mark Barrocas, Director & CEO at SharkNinja]

Yes. Yeah. Look, I mean, I think we're assuming kind of a base case that market is flat. You know, that can obviously vary kind of country to country. But I think on the whole, you know, as we go into kind of thinking about the year and planning the year, we kind of look at it and say market's flat, you know, now, you know, how do we go out and grow?

[Mark Barrocas, Director & CEO at SharkNinja]

How do we go out and enlarge the size of the market? So in general, I don't know that we're kind of planning any type of either big market rebound or market decline. I think with what we're seeing so far in Q1, I think flat is about overall what the market is seeing. So that's kind of our base case of what we're looking at.

[Rupesh Parikh, Senior Equity Research Analyst at Oppenheimer & Co. Inc.]

Great. And then maybe just one quick follow-up question. On the tariff front, when you do see these 10% type China tariffs, typically when do they flow through? Because I know there's a lag in terms of when that sell through is. So just any color there?

[Rupesh Parikh, Senior Equity Research Analyst at Oppenheimer & Co. Inc.]

Thank you.

[Mark Barrocas, Director & CEO at SharkNinja]

Yes. Look, it varies. I mean, as Patrick talked about, I mean, we build some tariff pre build inventory where every month more and more products moving out of China. You know, if you have a product that is running at very low weeks of supply, the recent additional 10% basically went into effect, you know, forty eight hours after, you know, Trump announced it. And so, that could be going in very quickly.

[Mark Barrocas, Director & CEO at SharkNinja]

And then you've got other products that we might have tariff prebuilt and you've got four or five months of inventory that it won't go through. So I think it varies. I think if you were to look across the, you know, the inventory spectrum, you know, you probably look at maybe sixty to seventy five days. But again, I think it was important for us, Ritesh, to provide guidance that included the latest information that we have, you know, from the day that those tariffs were announced. I mean, we immediately went into action to work on understanding the impact and initial steps of how to mitigate those.

[Mark Barrocas, Director & CEO at SharkNinja]

And so I think we're just trying to provide the right color to say based on the latest information that we have, you know, we still feel good about guiding our business, you know, with 13% to 15% EBITDA growth number in 25%.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

Yes. And Rupesh, just to wind it up

[Patraic Reagan, Chief Financial Officer at SharkNinja]

on that one, you know, how you can kind of categorize it is, you know, we've been on this offense for, you know, quite some time, obviously adjusting in the moment. And, you know, what we view as our responsibility is engineering a soft landing. And so that's why you saw us take the hard decisions over the course of the last twelve, eighteen months or so in terms of investing heavily to get production out of China. It's why we've invested in, working capital from a pre build of inventory standpoint It's why we continue to invest as we get into this year in terms of continuing to move that out of China. So we've got select inventory that's prebuilt.

[Patraic Reagan, Chief Financial Officer at SharkNinja]

It should help us, But we're doing everything we can all across our P and L and balance sheet to make sure that we mitigate tariffs as much as we can. And that's why we felt confident in terms of building that into our guidance that we shared with you today.

[Rupesh Parikh, Senior Equity Research Analyst at Oppenheimer & Co. Inc.]

Great. Thank you for all the color. Best of luck.

[Operator]

Our next question will be from the line of Stephen Forbes with Guggenheim Partners. Please go ahead. Your line is open.

[Steven Forbes, Senior Managing Director at Guggenheim Securities]

Good morning, Mark, Patrick. Mark, I wanted to focus on sales and marketing given two years here of 40% growth. So curious if you could help us better understand how much of this year's spend is associated with future growth opportunities because it looks like a key area of reinvestment for you. And then any way to deconstruct the almost $600,000,000 of advertising spend into the various channels, right, as we think about brand or performance, just like reframing the advertising spend for us as we enter 2025?

[Mark Barrocas, Director & CEO at SharkNinja]

Yeah. Look, Steve, I mean, you have to understand that, you know, we've entered a lot of new categories that, you know, require investment, you know, all of which that doesn't pay off immediately. We've entered a lot of new countries that we're starting from scratch that require investment that doesn't pay off and kind of compounds on itself. So I would say that, you know, yeah, over the last two years, we've done a lot of investing to kind of build a solid foundation in business to grow off of. I mean, you look at, you know, if you look at what we did in Europe this holiday season, I mean, we drove big growth for these European retailers.

[Mark Barrocas, Director & CEO at SharkNinja]

I mean, they believe in Shark Ninja now. I mean, they believe in Shark Ninja, like The US retailers believe in SharkNinja, The UK retailers believe in SharkNinja. So, you know, what's that worth? I mean, that that is, you know, no easy task to do. And by the way, it's not just about how much money you spend.

[Mark Barrocas, Director & CEO at SharkNinja]

I mean, it's about, you know, this combination of having the right product innovation, you know, investing the money to create awareness and great storytelling, and then having, you know, satisfied, you know, raving consumers that are, you know, pushing the brand. So, I mean, I think there's a massive investment that's been made over the last two years But the benefits of it, we've yet to see in 2024 and will pay dividends as we go into 2025 and 2026. And we kind of, you know, keep compounding and building on ourselves. So that's one piece. I think secondly is, you know, look, we've been in a flat market, you know, and we've been in a market where we have to do the heavy lifting to grow the overall market and grow the business.

[Mark Barrocas, Director & CEO at SharkNinja]

And, you know, we feel like that's our responsibility to be able to grow. And that is what also continues to endear, you know, the retailers to us that we're driving people into their stores, we're creating excitement to these categories, because there's not a lot of other people, not a lot of other brands that are doing that, you know, especially to the degree or scale that we're doing it. Now, when you look across the $600,000,000 plus in advertising, I mean, there's a lot of different, you know, components to this. I mean, our direct to consumer business is growing. I mean, there's a lot of lower funnel direct to consumer marketing that's going in as we want to kind of capture that consumer to our direct to consumer channel.

[Mark Barrocas, Director & CEO at SharkNinja]

So let's put that in one bucket. There's a large amount of, you know, upper funnel awareness that's being driven, as we enter some of these new categories in these new markets. We try not to drive the brand, Steve. I mean, I try I'm not a believer that we want to go out there and just kind of market the Shark or Ninja brand. I think we have to do that under the halo of some sort of product.

[Mark Barrocas, Director & CEO at SharkNinja]

I mean, even if you saw our David Beckham Christmas commercial, you know, we tried to make that still very product centric. I mean, that he was, you know, using these different products to be able to make his Christmas dinner. So, you know, I would say that, you know, there's a big chunk of lower funnel, there's a big chunk of upper funnel, and there's a big chunk of how do we start to create the user generated flywheel. I mean, it's very interesting, Steve, like the rule of thumb that I had, you know, a year ago was we need to get 50,000 to 100,000 units out of the market before we were able to get this kind of user generated flywheel going. I think what Creamy Swirl showed you and what Cryo Glow showed you is we could do that before we even launch the product.

[Mark Barrocas, Director & CEO at SharkNinja]

We can do that by seeding, you know, a hundred influencers and building great branded content. You know, that was already starting to start, you know, the flywheel. I mean, we had influencers that we sent the creamy swirl to, you know, they committed to us that they would do one TikTok, you know, or one Instagram post or one YouTube short, you know, and they came back and they did 15 of them, 16 of them. I mean, these influencers are recognizing that they're able to build their follower base using our products. Like, our products are engaging, you know, their follower base or building their follower base for them.

[Mark Barrocas, Director & CEO at SharkNinja]

So we've created this really incredible kind of symbiotic relationship where, you know, these influencers are not just, you know, thinking of us as, you know, a brand that's going to invest in them. We're actually in some cases not investing monetarily, but we're giving them a head start or we're giving them a sneak peek or we're giving them a behind the scenes view. And that is very, very valuable to them in terms of being able to develop content that engages their communities.

[Steven Forbes, Senior Managing Director at Guggenheim Securities]

That was great. Thank you, Mark.

[Mark Barrocas, Director & CEO at SharkNinja]

Thanks.

[Operator]

Unfortunately, we have run out of time for any further questions. So I will now hand the call back to Mark Barocas for some closing

[Mark Barrocas, Director & CEO at SharkNinja]

remarks. Yes. So, thank you so much for joining us and we look forward to speaking with you again soon. Have a wonderful day.

[Operator]

Thank you. This will conclude SharkNinja's fourth quarter twenty twenty four earnings call. Thank you for your participation. You may now disconnect your lines.

Participants

Executives

• Arvind Bhatia, SVP - Investor Relations
• Mark Barrocas, Director & CEO
• Patraic Reagan, Chief Financial Officer

Analysts

• Brian McNamara, MD - Senior Analyst Consumer at Canaccord Genuity - Global Capital Markets
• Randal Konik, Managing Director at Jefferies & Company Inc
• Brooke Roach, Vice President, Equity Research at Goldman Sachs
• Andrea Teixeira, Analyst at JPMorgan Chase
• Alexander Perry, Director, Equity Research at Bank of America
• Rupesh Parikh, Senior Equity Research Analyst at Oppenheimer & Co. Inc.
• Steven Forbes, Senior Managing Director at Guggenheim Securities