Q2 2025 SharkNinja Inc Earnings Call
Good morning, and thank you all for attending. The shark, ninjas second quarter 2025 earnings call. My name is ba and I will be your moderator today.
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I would now like to pass the conference over to your host James lamb, senior vice president of investor relations and treasury. Thank you. You may proceed James.
Good morning and welcome to shark ninjas second quarter 2025 earnings conference call.
Earlier today, we issued our Q2 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.
For more details, please refer to our earnings release and the company's most recent SEC filings
Which outlines 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.
Joining me today are our chief executive officer, Mark, Barros and Chief Financial Officer. Patrick Regan.
Mark will start by providing a business update.
Followed by Patrick who will review our Q2 Financial results and share our outlook for 2025.
Mark will then offer some closing remarks before we open the call to questions.
During the Q&A session, please limit yourself to 1 question and 1 follow-up.
I would now like to turn the call over to Mark.
Thank you, James.
Good morning, everyone. And thank you for joining us today.
Our second quarter results, exemplify shark ninja at its best.
Executing on our differentiated growth strategy, even amid unprecedented Global challenges.
We believe we've built a durable business model that can deliver demonstrable success in all operating environments.
This quarter, reinforces the power of creating disruptive and Innovative products.
Supporting them with world-class marketing and demand generation leveraging. Our Diversified Global supply chain and executing our Omni channel strategy to benefit our consumers, Retail Partners employees, and shareholders.
We did what we said we would do and our efforts produced another outstanding quarter of results, net sales, growth of nearly 16% year-over-year.
Growth margins compared to the year ago period and adjusted Eva dog growth of approximately 33% year-over-year.
We also followed through on the expense discipline, we committed to with operating expenses as a percentage of net sales, decreasing by more than 200 basis points. Compared to the prior year quarter,
how did we achieve these results in such a challenging environment?
Let's take a look at the underlying drivers of our strength, starting with the consumer.
Put simply, we're seeing strong demand for shark ninja products globally. Our steadfast focus on solving consumer problems with Innovative. 5-star products is resonating worldwide.
Year-over-year. Net sales growth was up. Nearly 14% domestically and our International segment accelerated to over 20% growth year-over-year compared to roughly 14% year-over-year in the first quarter.
Broad strength across our Diversified, portfolio of categories, and geographies.
Consumers are demonstrating a healthy appetite for spending on products, offering differentiated performance and value that's synonymous with shark ninja.
We have a trusted relationship with consumers that we hold sacred. This trust grows as we drive towards an extraordinary value proposition, no matter what is changing around us.
In the second quarter, we hit the challenges of global tariffs head on in multiple ways.
Supplier concessions. Limited discounting activities and strategic pricing actions are all tools. We utilized in a balanced way.
Our targeted price changes to date have resulted in minimal if any demand degradation.
We don't take price increases lightly and we're constantly trying creative approaches and testing to measure their impact.
Shark ninja is deeply committed to ensuring the trust. We've earned is durable.
We do this by solving consumer problems. Both known and undiscovered.
We do this by innovating and relentlessly delivering value.
These core principles allow us to continue to grow and take market share. Even when the markets we serve are under pressure.
In the first half of 2025, our data, indicates the end markets, we participate in globally declined. In the low single digit range year-over-year when excluding shark ninjas performance.
Our relative strength is significant and positions us to play offense.
This is a theme. I will return to later.
Our reputation with consumers is the result of how we differentiate ourselves as a company at shark. Ninja problem solving is in our DNA.
The second quarter introduced unprecedented Global Supply challenges. But we did with shark ninja does with any problem. We attacked it from all angles, mobilized, the strategy and navigated our way to success.
We view this capability as a foundational competitive Advantage. Particularly given the significant scale and complexity of our Global operations.
While there are terrorists, Dynamics at play everywhere. We Source Products. We believe it's becoming clear. That China will be subject to a higher rate than most other manufacturing centers in southeast Asia.
that's why it's so important to be Diversified in other countries, another area where we feel, we have an industry-leading optionality
I'm pleased to confirm that we have now achieved. Our goal of enabling approximately 90% of our us. Volume to be produced outside of China.
And we remain on track to get to nearly 100% by the end of the year.
This is a major milestone for shark ninja and a significant competitive advantage.
The depth of investment in our supplier network is another Edge.
We spent multiple years and considerable resources, developing independent sub-supplier, and component vendors to support the expansion of our Tier 1 Partners across Southeast Asia.
I will now turn to our 3 pillar growth strategies.
Starting with our first pillar expanding into new and adjacent categories.
before I get into some of the exciting highlights from the second quarter, I want to remind everyone of 3, important elements, that differentiate shark ninja in new product development,
the first is the scope of our ambition. Our mission statement is to positively impact, people's lives, every day, in every home around the world.
This means we're always on the hunt for problems to solve and ways to Delight the consumer.
In turn this mindset, empowers shark ninja to enter 2 new categories. Every year, while simultaneously, introducing 25 ground up new products over the same period.
The second factor is the rigor of our process.
We recognize the broad strength of our Innovation engine that allows us to enter new categories but it's not easy to do.
The process to enter a new category is challenging and not linear.
We spent years developing this approach as a key enabler of consistently driving innovation.
Like everything else at shark ninja, there's always room for improvement, we'll continue to refine and reinvent our process as we evolve.
The third key differentiator is the size of our pipeline.
We intentionally sequence, new product, introductions to maximize impact and success.
For example, we're in 37 different categories in the US.
But in fast growing countries like France and Germany that number is only roughly 10 today.
as a result, our Global geographies have multiple years of structural growth simply by continuing to introduce our already successful products in new categories Within These markets
As we continue to add to our Innovation pipeline where we're already deep into, developing 2026, launches, we constantly build for the long term.
back to Q2 specifically, we saw a tremendous strain for cross newer categories,
Our ninja flushy remains a viral sensation.
We are in 1.3 billion Impressions globally up from over a billion Impressions last quarter.
And so, robust performance across geographies.
Our ninja Lux Cafe business continues its sizeable contribution to growth as we establish ourselves as a disruptive player within the espresso category.
We launched our Lux Cafe Pro Series in the second quarter with enhanced Automation and versatility features to easily create even more beverage options.
Taking a step back, flushy and Luxe Cafe are great examples of how we're transforming products into franchises.
When we have a viral hit, we don't rest on our Laurels because we realize that we need to continue to deliver and even better product the following year.
Over time, we've proven that shark Rangers success comes from building large durable, franchises.
To do this, we have to create an assortment of products across price points, feature sets sizes and do it globally.
If we're successful, we'll capture additional new customers while keeping existing customers satisfied.
this is important to keep in mind when we discuss new categories that eventually transition into existing categories,
Our fan business performed incredibly well. During the quarter across key products, like the flex freeze, go an indoor outdoor misting fan and the recently introduced turbo blade that's gone viral on social media.
Fans offer a great example of how shark ninja completely rethinks categories that are. In this case more than a century old, we want you to take fans with you Outdoors. We want you to sleep better with fans. We want fans to convert from pedestal to Portable with ease. And we show consumers how to benefit from all these use cases using social media with tremendous success,
Other companies may look at fans and decide it's a break fix. No growth category.
At SharkNinja, leaning into our novel approach has turned into big growth and is another proof point on building sustainable franchises.
We introduced the shark Flex Breeze, last year, and followed that up with multiple new products in 2025, all with stronger, marketing support and broader Channel reach.
Turning to Beauty, momentum continues to build globally for shark trial glow.
The product is launched in the US. UK and the Tam markets with availability and Continental Europe. Starting this month.
Bioglow enables at home, access to high quality skin care, treatments, a market that we think can be used.
This is a prime example of the differentiated thinking we pursue with shark ninja, and it's only the beginning.
We aspire to establish shark Beauty as The Runaway leader in Beauty technology. An enormous white space opportunity where seizing at full speed
We plan to introduce several significant and disruptive new products in hair and skin care before year end with an exciting pipeline for 2026 and Beyond.
Beauty is an incredibly attractive Market that naturally aligns with our recipe for success.
Innovation and Prestige products.
Visual storytelling and social media interest.
The potential for high margins and more.
Let's turn to our second growth pillar growing share in existing categories.
The foundation of shark ninja success is a healthy base business. That delivers strong average selling prices healthy gross margins and marketing. Efficiencies
In Q2, the story is about breath and consistency, across all 4 of our category, groupings cleaning cooking, food prep, and beauty and home environment. We drove market share games
a great example is cleaning where multiple existing product, lines contributed to sizable outperformance, relative to the industry at large, including our cordless vacuums, Robotics, and carpet, extraction products,
The ability to scale and reinvent existing categories is vital to how shark ninja builds and maintains big businesses.
The success of ninja crispy, reflects the power of this concept within the air fryer category.
Are leading position in this market presents. A new challenge to solve figuring out how to grow even bigger.
This is where sharpening just shines. The portable glass system crispy, revolutionizes air fryer, cooking with this Innovation. We're capturing new consumers into the market and even seeing existing consumers retiring their legacy air fryers to upgrade
Excitement of this product is a global phenomenon.
Frisbee first launched in the US with great success and we've just introduced it into the UK, with France and Germany. Next in line.
By Design, we don't expect to achieve full reach until year end, and then we've got a big roadmap of innovation lined up to follow.
Along the way we're building a strong intellectual property, mowed around crispy while we collect invaluable consumer feedback to power the next wave of new products.
Market share games with an existing category is do not happen by accident.
Our ability to gain, share comes from disruptive products like crispy but also the halo effect from our Unstoppable Innovation and marketing engines throughout the business.
Trusts are direct to Consumer sites, we see more repeat buying behavior and more cross-brand shopping than ever before.
The strength of our core product categories, is a fundamental, Cornerstone of how we pursue durable success.
nearly 20 of the 25 new products per year, come with an existing categories to support the core business and will never stop driving Innovation as this base grows larger
Our third pillar is international.
where we're seeing significant white space for years to come,
We experience growth across all our International geographies in Q2 with continued strong Trends in Europe, including France, Benelux and Central Europe.
Importantly, our UK business also returned to form more quickly than expected, with traction across a wide range of products: flushy, creamy, Luxe, Cafe, blenders, robots, fans, and Cryoglows.
In fact, sales momentum in the UK strengthened throughout the quarter.
This result shows the power of our Diversified business model.
Despite an approximately 25% year-over-year decline in air fryers, the largest category in the UK, our net sales in this geography still grew in the second quarter.
The more we expand our portfolio of products and geographies, the more the power of diversification drives success.
This is evident in places like France and Germany, where we're running the same Playbook.
We're further penetrating the market in these countries with a broader selection of products.
We anticipate a big holiday selling season in 2025 in both France and Germany that can drive additional momentum heading into next year.
As our other International geographies, keep scaling rapidly, we'll continue evolving from distributor led to direct models.
The next geographies, we have targeted include Benelux Poland, and the nordics with conversions happening. Over the coming quarters.
International growth.
There's a lot of growth potential ahead of us in Continental Europe.
We're equally excited about our opportunity in Latin America.
Our Mexico business successfully transitioned to a direct model in q1 with shipments accelerating throughout Q2.
We expect to see further strength in the second half of 2025, and we're building our teams to support growth.
In fact, even as we continue using the distributors in other Latin America countries, we're adding our own boots on the ground in areas like marketing and social media.
These Investments help shark ninja build connections, with local consumers directly as we learn about their insights and needs.
Our 3 pillar growth strategy is the Cornerstone of how we intend to deliver sustainable Topline success.
And it all stems, from our outrageously extraordinary mindset.
At shark ninja, we're obsessed with winning.
Agile and differentiated supply chain and deep relationships with retailers.
We play to win big and cannot be more excited to be fully on offense in the second half of 2025 to drive momentum heading into 2026 and beyond.
This enthusiasm is reflected in our updated Outlook where we're once again, raising our net sales and adjusted ibaa growth ranges for FY 2025.
Patrick will provide more details but allow me to underscore how excited we are to attack. Growth opportunities, by leveraging, every Advantage we have
Momentum across both Brands a robust new product, pipeline healthy, inventory, availability, and increasing interest, from Retail Partners globally.
We will also take advantage of the lessons we’re learning related to pricing actions and promotional activity as we continue to experiment thoughtfully with both in the second half of the year.
Taken individually. These attributes are meaningful.
Taken together. We feel as strongly about the degree of our Competitive Edge as we ever have.
When it comes to our brand aspirations, shark ninjas. Giving me bigger and acting bolder.
In Q2, we broke new ground as a key sponsor featured in the Apple, original films, F1 the movie from Warner Brother pictures.
With a focus on Precision Engineering and Elite Performance. The F1 audience is a perfect fit for shark ninja.
We saw tremendous consumer activation throughout multiple marketing events associated with the movie.
F1, the movie also marks an important evolution in our branding strategy. As we build consumer awareness of the combined shark and ninja brands.
We intend to take an even bigger step in this direction with the upcoming relaunch of our direct-to-consumer site at sharkninja.com, powered by the Salesforce e-commerce platform.
We're on track to go live in North America and Q4 and expect to follow suit with International DTC sites in q1 of 2026.
the more we demonstrate how our unique culture, and Innovation strategy drives success, the more outside recognition, we receive
In the second quarter, we were deeply honored to be named to Time magazine's list of time. 100, most influential companies for 2025.
It's a true privilege to be part of this Elite list of disruptive companies and a major validation of how our Relentless focus on solving consumer. Problems is resonating.
To wrap up this quarter demonstrates, the power of our proven operating model and competitive mode.
Even with all the distractions and challenges around us shark ninja is winning because we're a problem solvers at our core.
This skill set extends from our products and consumer focus to our business strategy and execution.
Going forward. We believe we're poised to outperform our competitors from a position of strength.
Even as we focus on delivering 2025. We're building a strong foundation for the future.
Shark. Ninjas making a concerted investment into our worldclass team to enhance our ability to scale and globalize The Business.
And deliberate.
I would like to thank all shark ninja team members for their unwavering dedication to our success.
And now Patrick will walk you through our second quarter financial and updated 2025 Outlook.
Thank you, Mark, and good morning everyone. I'm excited to speak with you today about our outstanding Q2 results in increased outlook for 2025,
Sharp ninja is a product Innovation Powerhouse that thrives on solving problems, whether it's consumer need or a business challenge.
Inherently. We believe that makes us an enormously resilient company.
Resiliency is 1 of the key themes that we have discussed today is we operate within a significant in sometimes unprecedented and unclear set of challenges.
This applies to how our products are resonating with consumers and how our Global teams are executing across our Innovation and growth initiatives.
Our results. This quarter also demonstrates, the resiliency of our business model, which has adapted to the ever-changing macro backdrop and continues to deliver a strong growth in profitability.
While the environment May remain turbulent, we are increasingly confident in our ability to navigate through all while pursuing our growth agenda.
Now, let's review the quarter. Net sales in Q2 increased 15.7% year-over-year to $1.4 billion.
Adjusted ibida increased it more than twice the rate of net sales growth or 33% to 223 million.
Adjusted. Even on margin. Also, improved to 15.5% up 210 basis points year-over-year
Growth higher gross, margins in discipline management of our operating expenses, all contributed to the robust performance in the quarter.
We are pleased with these results and our overall execution, in the first half of 2025, despite the significant challenges.
As we mentioned last quarter moments, like these presents shark ninja with an opportunity to do what we do best.
Rallying together, and taking quick actions to solve problems.
Turning to our geographical results domestic. Net sales increased roughly 14% year-over-year in our International. Net sales react to more than 20% year-over-year.
As previously communicated our Mexico, business successfully transitioned from distributor led to a direct model in q1 and I'm happy to report the results are right on track.
Our acceleration in Amia continues with strong growth in countries like France, Germany, Belgium, the Netherlands and more.
As Mark mentioned, we continue to believe, we are in the early Innings of our expansion, in both existing and new countries. In this gives us great confidence in our future, within Europe and Beyond
Looking at performance by category. Net sales in the cleaning category, increased 8% year-over-year to 501 million from 466 million in the prior year period.
Our Robotics and extraction, businesses were standouts in the quarter offset, slightly by quartered vacuums.
Our family of shark stain, Stryker products, and extraction. And our power detect franchise across both robots and cordless led the way.
Net sales and food preparation category increased 53% year-over-year to 405 million compared to 265 million.
This strong growth was driven by the continued viral success of our slushy, Frozen drink maker as well as our creamy ice cream platform. Put simply consumers around the globe. Want their frozen treats and they are turning to our ninja products in a big way.
Net sales in the cooking and beverage category, decreased 4% year-over-year to 366 million compared to 379 million.
Continued, Global momentum of the Ninja Lux. Cafe Espresso business was offset by our air fryer and outdoor grill. Subcategories mostly related to lapping a strong second quarter of 2024.
Finally our Beauty and home environment category, increased 25% year-over-year to 173 million compared to 138 million primarily driven by continued strength of our air purifiers and fans like the shark Flex Breeze and shark turbo blade as well as momentum behind our Sharp cryoglowsf.
Profit.
In the second quarter, adjusted gross profit, increased 16% year-over-year to 714 million or 49.4% of net sales.
Adjusted gross margin increased, approximately 30 basis points. Year-over-year with cost optimization in favorability on pricing and promotional activity partially offset by the impact of tariffs with mix being a secondary offset in the quarter.
With our ever expanding product and category offering focused on solving consumer problems. Shark ninja continues to prioritize investment across our growth driving engines of R&D product Innovation sales and marketing. Geographic expansion in supply chain diversification
The power of our sales growth and profitability profile enable us to reinvest purposefully in these areas while also working to drive down operating expenses as a percent to net sales.
We achieved Opex leverage in the quarter consistent with our focus on cost discipline and remained confident. We will see leverage for the full year.
Research and development. Expenses were roughly flat year-over-year at 89 million compared to 90 million in the year ago. Period.
We continue to invest aggressively in key Talent as you've seen from recent announcements to support our growth initiatives in new product development while driving efficiencies by incurring lower, professional, and Consulting fees.
Sales and marketing expenses. Increase 18% year-over-year to 358 million compared to 303 million in the year ago. Period.
As with previous quarters. This increase was driven primarily by our Strategic investment in advertising and Personnel to support our new product, rollouts and expansion into new markets as well as hired delivery and distribution costs from increased order volumes.
within D Toc, we are seeing greater efficiency in our distribution expenses, driven by Warehouse consolidation in favorable outbound, and transfer Freight negotiations in North America,
General and administrative expenses. Decreased 11% year-over-year to 92 million compared to 104 million in the year ago. Period.
This decrease was driven primarily by reduction in legal, professional and Consulting fees compared to the prior year.
Our Gap effective tax rate was 22.8% in Q2.
While our non-gaap effective tax rate was 23.2%.
Adjusted net income for the second quarter was 138 million or 97 cents per diluted share compared to 100 million or 71 cents per diluted share in the year ago. Period.
And as mentioned adjusted ibid do for the quarter increase by 33% year-over-year to 223 million, or 15.5% of net sales compared to 168 million or 13.4% of net sales in the prior year.
Turning to the balance sheet and cash flow. The size and profile of our balance sheet is a critical strength for shark ninja. As we grow internationally, and exercise flexibility on inventory purchases
We continue to pre-build inventory, based on evolving terrorist policies, but to a lesser degree with the dollar amount in the second quarter less than half of what we added in the first quarter.
at the end of the second quarter cash and cash, equivalents totaled, 188 million,
36% year-over-year with total debt outstanding of 759 million.
We also have nearly 490 million of capacity available to us on our 500 million revolving credit facility.
Total inventories reached 1.1 billion dollars exiting the quarter of 25% year-over-year as we continue to invest behind a growth initiatives globally.
Let's move to our updated outlook for 2025.
As we discussed last quarter, our internal teams continue to model, a wide range of macro and policy. Scenarios is an ongoing part of our tariff mitigation strategy.
All 3 major components of this plan.
How we Source how we sell an operating expense management are contributing employees to deliver more savings as we put our strategy into operation.
A tariff outlook for our business.
As a result, we have incrementally higher confidence in the rigor of our analysis, and how this is reflected in our guidance ranges.
Our revised Outlook assumes, tariffs remain where they are today including 30% for China. 20% for Vietnam in 19% for Indonesia, Thailand, Malaysia, and Cambodia.
our guidance ranges incorporate, these tariff assumptions and are mitigation efforts to offset, including the incremental headwind, from tariff rates, in our southeast Asia footprint, moving higher compared to the 10% rates, we assumed in our guidance update, in May,
It's important to note that the impact of tariffs will be more weighted towards the second half of the Year based on the phasing of when the higher costs fully impact the p&l.
With the above context in mind, let's review our updated Outlook.
For the full year 2025. We now expect net sales to increase between 13% and 15% compared to our prior guidance of an 11% to 13% increase.
Adjusted net income per diluted share is now expected to be in the range of $5.00 to $5.00 compared to $4.90 to $5.00 previously.
Adjusted ebitda is now expected to be in the range of 1.1 billion dollars to 1.12 billion dollars. Representing growth of 16% to 18% year-over-year.
Compared to 1.09% of growth of 15 to 17% year-over-year.
Is still expected to be flat to 2024 and our Gap effective tax rate. Expectations remain in the range of approximately 24 to 25%.
On Capital expenditures, the cost control. We are applying to our operating expense.
Extends to our discipline on capex.
We are reaffirming our previous guidance of 180 to 200 million dollars for the year, but would no longer point you to the higher end of the range.
To close our performance in Q2 is a credit to the resiliency of our business model and our tenacious execution to deliver on behalf of our consumers, retailers employees and shareholders.
As we have reinforced several times today, shark ninja is all about solving problems and remaining resilient.
We enter the second half of the Year knowing that whatever new challenges come our way, we feel energized and confident in the path ahead.
I would like to join Mark in thanking the entire shark ninja team worldwide for their tireless efforts and ongoing commitments to Our Success.
With that, I will hand it back to mark.
Thanks Patrick.
We're proud of our Q2 results and Incredibly optimistic about the future because of how shark ninja operates we took on enormous challenges in the second quarter and did what we always strive to do stay agile act quickly and determine a path to win.
A big part of this is connecting with consumers in a way, we feel stands out considerably from the competition.
We listen, we innovate, and we deliver disruptive 5-star products.
And we do this all globally, at massive scale while spanning more than 3, dozen product categories.
The reality of the current macro and policy environment is that we'll need to stay just as Nimble to drive continued success.
accomplishing this at our size requires, careful attention, new product, introductions continued supply chain diversification, Geographic expansion and more
For all of this complexity, our business strategy is actually quite simple.
Drive, a solid base business franchise, add new, and adjacent categories, and rep, replicate our success internationally.
This 3-part growth strategy is powerful and we're excited to play offense and push shark ninja forward.
Thank you, this concludes our prepared remarks and I will now turn it over to the operator to kick off, Q&A operator.
Thank you, Mark. We will now begin the question and answer session. If you would like to ask a question, please press star. Followed by the number 1 on your telephone keypad.
If you change your mind, please press star followed by 2.
Tuesday.
We'll pause here briefly while ask questions are registered.
The first question comes from Brooke roach with Goldman Sachs. Please go ahead.
Good morning and thank you for taking your question. Mark, you spoke about being fully on offense in the back half, how are you thinking about what that means for the growth opportunity between us and international. And then for Patrick, can you
In your tariff, commentary, how should we be thinking about gross margins for the year and the Tariff pressure that you expect in each of the third and fourth Quarters on a mitigated basis. Thank you.
Yeah, thanks Brooke. So look we um you know we're excited that we had strong demands in our domestic business. Our North America business, and the second quarter and um, you know, we're continuing to see nice demand from the, the core domestic business. We've we've got a lot of new product, introductions that are coming over the next 60 days.
Um, we've got a lot of strong retailer commitments, um, in the back half of the year.
So we, we, we feel good about, you know, the domestic business in spite of the market being down. I mean, when you remove shark ninjas numbers, you know, the market was down, kind of mid, you know, almost mid to high single digits in the second quarter. So we're we're not seeing a strong Market overall but we're seeing strong consumer demand for our products domestically
When we look at the international business, you know, we talked about our, our business in the UK accelerated as we moved out of the second quarter, we're continuing to see those new product launches from last year, you know, move into the uh, UK business. So, you know, we're expecting some acceleration from our UK business. As we go into the second half of the Year, Germany and France continues to be strong. You know, I've talked about the commitments that we have from retailers in those markets as we go into the the third and fourth quarter. And we're starting to see some great traction, you know, Mexico. Uh, you know, we obviously have the transition in the first quarter, uh, we didn't really get up and going until kind of mid May in the second quarter, but we're seeing really nice posos growth in Mexico, uh, you know, countries like the nordics spend alux Poland, you know, we're seeing nice, PS growth. So overall, you know, we we feel like there.
There's kind of balanced growth in the second half of the Year driven by, uh, you know, lots of new product, introductions in North America in the UK and, you know, just continued Market penetration in in the rest of the world.
Yeah, and then Brooke on on like a gross margin in in tariff questions. So, you know, 1, if we go back 90 days ago, um, you know, the biggest variable in, in our p&l and outlook for the year was, uh, the clarity of, of tariff assumptions for the balance of of year. And so, you know, we took our best guess at that point in time. And uh, you know, if you remember our assumption was uh, roughly 145% for China, it was uh, roughly 10% for the balance of the southeast Asia countries and so we we set at the time, you know, the thing that we were craving the most in terms of, you know, putting together what the balance of our year looks like was Clarity. And, you know, we now feel like we're getting more clarity in terms of what the Tariff rates look like for balance of years. So now that we see China at 30%, uh, the uh, Vietnam at 20, the rest of Southeast Asia, at least for right now at 19%. Uh, as you saw in the prepared remarks that we we put forward, we feel like that gives us, you know, the clarity that we need uh to operate.
And so that is reflected in terms of um you know what, you see it uh relative to our our raised guidance uh for the balance of year on the IBA dot. Um what I would say is the China rate going from 145 to 30, um that's not a massive economic impact to us uh because you know we weren't planning on shipping a lot of product at the 145 rate but what it does do is it gives us you know increased flexibility in our supply chain um which you know gives us the flexibility and balance of year, you know from a shipment standpoint if we choose to make in a certain decisions of product coming out of China. So you know, I you know, kind of addressed that question saying that, you know we feel better than where we did 90 days ago, uh, in terms of clarity on on tariffs
Great. Thanks so much. I'll pass it on.
Your next question comes from, Randy cronic with Jeffrey. Your line is open.
I guess, Mark. I want to key in on the, um, the comments made around the talent acquisition. I think he's hired at least 5, uh, key Executives over the last, uh, you know, few months here, since the beginning of the year, you know what, what's the, what's the approach are you adding, you know, additional types of capabilities is the organization added muscle that you didn't have before. Um, I think you said you, there's less use of external Professional Services as a result. Just maybe tenant dimensionalized a little bit more. You know, what these these different, uh, leaders bring to the table and and other capabilities that are going to be adding to the business, to help, you know, continue to elevate the growth rate of the business over the long term. Thanks.
Yeah, Ramsey. I mean, look, you know, we we've grown our business so much over the last 24 months, and, you know, not just in dollars, but in, you know, complexity and scale. I mean, you know, we're we're much more, uh, international business than we were 24 months ago. I mean, we're in more new product categories. I mean, our product categories, you know, our products are getting much more complex. I mean, when you think about, you know, hires like Mike Harris, uh, you know, we're seeing a lot more software and a lot more electronics and mechatronics being driven into our products. Um, you know, we think that's only going to continue to escalate as we move forward on the product development side. Um, Howard.
Milk coming on board. Uh, we got to drive a, a big pipeline of innovation, um, you know, and, you know, we're we've got a great Advance development team. Uh, but you know, we, we needed kind of strong leadership, you know, over that advanced Development Group, uh, reporting to Ross. That would be able to keep driving that pipeline. So, um, you know, we're really excited. I mean, I, in fact, just got out of a meeting last night, you know, for products for 2026 that I'm, I'm so excited about, um, you know, ads like Michelle, you know, in the growth area, um, you know, we we've got to deliver, you know, significant growth every year, significant organic growth. And so, where is it coming from by product category? Where is it coming from by geography? Um, you know as we keep expanding into these new markets, there's you know operational challenges there's compliance challenges and so we felt like we really needed to develop this growth group.
Uh, you know, in a big way, um, you've heard me talk about, you know, the opening of our New York office, that's going to be a real creative epicenter for us. Um, you know, I think that, you know, 1 way of driving demand obviously is is efficiency in our media, but I think a big area is continuing to drive better and better content that consumers engage with, and we're not just developing content now in the English speaking.
World. You know, we've got to develop it and the Spanish speaking world, we got to develop it in French, we got to develop it in German, you know, I mean we've got to really scale that globally and so, you know, on the creative side, that is an area that, um, you know, we need a lot more sophistication and then and then on the beauty piece. Um, look, I mean, we're not, you know, we believe Beauty Tech is a real white space area for us to continue to develop in over the next 5 years. You know, we've got some new hair care products that are coming out in the next 60 days. We've got some new skin care products that are coming out. We think there's other places for us to go in Beauty Tech and so we felt like we needed to bring in, you know, a much stronger Beauty marketing team to be able to um to support that growth. So look it's just a you know Natural Evolution of the business and and how do we stay ahead. And you know, we have this saying that we talked about
Here internally, which is, you know, we want to build Unstoppable teams and we want to build teams that you would never want to compete against and I think in a lot of areas of the business. Now, you know, we're building teams that you would not want to compete against and and so I'm excited about that.
Over the coming years. Thanks.
Yeah, I mean let's start with that. You know, the the F1 movie um, was a huge success for us. I I think that sometimes you go into these things and and you're not sure exactly how it's going to play out. But, um, you know, that, you know, the awareness that we've gotten, I mean, how consumers, you know, have really looked at, you know, the car and and you know what Brad Pitt was wearing and, you know, really Associated kind of shark ninja, with Formula 1. I mean, we, we have every Formula 1 team after us right now. In terms of, you know, how do we engage with them? Um, it just seems like such a natural partnership from a performance and Engineering standpoint, um, and things like that. Um, you know, I would say Randy that, you know, the next Evolution to that is going to be the launch of this website, you know, where the consumer is going to land on a shark ninja website for the first time in our history. Um,
...where the consumer is going to have access to all of our Shark and Ninja products. We're going to be able to much more easily cross-sell consumers. We're going to be able to drive much better loyalty programs, um, you know, across brands. So, I think it's an evolution. I mean, I think the consumer is starting to recognize that there's this great company behind these two great brands. And I think we need to take it in stages.
I think the website you know will give us a lot of great data through the holiday season for us to to Think Through. I I think there will be more and more opportunities for us to market the shark ninja business and not just the shark or ninja brands.
Um, but it's, it's an evolution and I, you know, I I I think we'll kind of take it, you know, as we get more data around it, you know, we'll we'll keep evolving our thinking.
And Randy just 1 1 final point on that. Uh, as you as you brought up uh, the website and Mark talked about it is, you know, 1 of the reasons. We're so excited to kind of, you know, co-brand and bring these uh Brands together on on the website. Is if you think about from a consumer experience right now, you know the consumer is going to uh, shark clean and Ninja Kitchen 2 separate websites to kind of come together. And now we see just a lot of synergy uh in a lot of uh benefits for the consumer coming in through through 1. So we're super excited about this. Is it lands in Q4?
Really helpful. Thanks guys.
Your next question comes from Alex Perry. With Bank of America, your Line's open Alex.
Hi, thanks for taking my questions here and congrats on a strong quarter. I guess, just first, as a follow-up, could you speak about, you know, sort of the de domestic growth upside in the quarter, I think, prior year to expect, you know, you had been expecting quite a lower growth rate domestically but it came in materially better did the China shipment pause sort of not have as great an effect and then how should we be thinking about back? Half domestic growth. Does it Accelerate from here and what are the key drivers? Thanks,
Yeah, um, look, you know.
I think, you know the the the China supply chain
You know still had a little bit of impact in the quarter uh, you know, but but we really experienced good PS growth. Um, you know, we we saw a lot of great demands for our products.
Um, you know, that we actually saw that accelerate as we went through the quarter, um, you know, and, and into July. So I I think Alex is just really a, a virtue of, you know, strong demand. Now, in terms of how do we think about the back half? I mean, look, I think we've guided ourselves conservatively in the back half. Um, you know, there, there obviously continues to be uncertainty, um, you know, all be it. There is, I think a clearer playing field, uh, being laid out now, as it relates to tariffs and, and what that tariff landscape is going to look like, um,
Overall, you know we we feel good about, you know, the domestic consumer.
Really helpful, and just a follow-up. Um, what categories and products do you expect to drive outside back half growth? Um, you know, what categories do you have, you know, sort of with more outsized innovation coming? Thank you.
I think for the balance of this year, Alex, I think we have outsized innovation coming in Beauty.
And I think you'll see that over the course of the next, you know, 6 to 8 weeks, um, with the products that we have coming out and the beauty space, I think we have a really Innovative product that's going to be launching in the Ninja Brand Outdoors. It's a new category that we've never been in. Um, I can't say that, you know, we don't plan any of these categories to be a home run, uh, but I think it just again puts us, you know, in more places outside the home for the consumer. So I'm excited about some of the, the new categories that are launching but I I I think Beauty presents a a real exciting opportunity for us.
Hey, Alex. The other thing you could do in terms of reading the tea leaves on, uh, in that space and beauty is, uh, last call, we talked about some key hires and, you know, the, the marketing space in in Beauty. And so, you know, that's kind of a little bit of, uh, insight into how we're thinking about teeing up the strength in the back, half in the category and then going forward into 2026,
That's incredibly helpful. Best of luck going forward.
Thanks.
We now have Steve fulps with Google home.
Good morning. Mark Patrick.
mark,
I, I was curious if you can maybe
I was curious if you could maybe give us a glimpse right into the conversations you're having with your Retail Partners.
And and the thought here, or what, I'm trying to explore is, you know what, what opportunities are sort of being presented to you?
uh, via those conversations, you know, as it pertains to, you know, distribution Point share
Opportunities or even just market share opportunities as you look to sort of solve.
You know, all the pain points, right? Or friction points that are out there for the retailer Network in general.
Yeah, I mean, look, it's timely, uh, you know, next week myself and, uh, you know, a chief commercial officer Neil or or off to, uh, you know, see the senior leaders at, at Walmart and Target and talk to them about the back half of the year. Um, you know, listen the conversations are, you know, that they're excited about our Innovation. I mean, they're they um, you know, how do they
Partner with us, you know, in in a better way, you know, upfront. I mean, how do they get um, a leg up from a, you know, fair share standpoint when new products come out into the market. So I I I think those conversations domestically have been great. Um you know I think we've got a lot of support from our retailers, um, but I think what's most exciting for me is that we've got a lot of great support internationally. I mean, I I'll give you a good example, like I was on the phone with the president of a really strong retailer in Latin America and South America and he was really pushing us, you know, how do we get more products in there, faster? How do we take advantage of the holiday season? Um, you know, really pushing us, you know, to get into Market, you know, and, and turn on our our demand generation engine. I have the same conversation with a CEO of a European retailer, uh, in
Italy.
Again, you know, Italy hasn't been a direct market for us, it's going to become a direct Market, you know, him asking us, you know, can we accelerate it? Can he get certain products this holiday season? Um, you know, to get a leg up on things into 2026? So I I, I think for me, Steve the most exciting thing is, you know, we've been working with the US Canadian retailers. You know, even the British retailers for so many years. It's the engagement that I'm getting, you know, at the CEO levels of, you know, European and South American retailers that are, you know, really, really excited about. You know, how shark and Ninja can can drive growth for them.
Yeah.
The 10 products, right? Being offered in France and Germany currently versus the portfolio as a whole. So
Right as it pertains to sort of product category expansion in some of those key markets, right? Or even, even some markets that you haven't really.
Um, you know, framed up for us in the past Spain. Italy. Uh, in a broader detail like where where does that 10 go? And and and and how big 2 category expansion, B internationally in 2026 and Beyond.
Yeah. So you know I mentioned it to an earlier question. Um you know the the higher of our chief growth officer and um you know, we have a product project here internally you know which is called our Global growth, high impact initiative.
And that is, is really focusing on how do we drive 50% of our sales outside of the US? I mean, that was something that, you know, we we started earlier this year and I guess I can just say Steve that, you know, that's where I think we're headed. I mean I I I think you know, I don't know that we get there in 2026 but I I think in the near term you know we believe the 50% of our sales come from outside the US. We think that there's a lot of white space opportunity and as you mentioned, Spain and Portugal and Italy, and the nordics and and you know, Poland and Benelux and South America and the Middle East.
Um, but I I I think you can think about our business over the next.
Few years as as being a business that's going to be, you know, 50%, you know, of our sales coming from outside of the US.
That's great. Thank you, Mark.
Thanks.
Thank you. I can confirm that does conclude today's call.
Thank you all for joining you may now. Disconnect and thank you.
And please enjoy the rest of your day.