All right. Good morning, dear investors. I am Venus, head of investor relations, public relations and compliance of JS Global Lifestyle. Ladies and gentlemen, welcome to the third quarter 2022 investors and analyst briefing of JS Global Lifestyle. If you're connected via Zoom, please change your Zoom's name by using your institution plus your name, and you can choose interpretation down there at the toolbar. Before you're asked to raise your hand to start your question, please remain muted. Now, you can check out our webinar at the upper right of our slides. Now, please allow me to introduce our management. They are Chief Financial Officer and Executive Director of JS Global Lifestyle, Ms. Han Run. Financial Director of JS Global, Chief Financial Officer of SharkNinja, Mr. David Stevenson. Also Financial Director of JS Global, Mr. Leon Liu. Board Secretary of Joyoung, Mr. Max Miao.
Me, Venus Zhao, Head of Investor Relations, Public Relations and Compliance of JS Global Lifestyle. Because Madam Han is on a long distance flight, ladies and gentlemen, let's welcome Mr. Leon Liu to start opening remark. Go ahead, please.
Thank you, Venus. Dear investors, good morning. Thank you all for participating in the third quarter 2022 investor and analyst briefing of JS Global Lifestyle. JS Global disclosed yesterday the gross revenue growth of its subsidiary, SharkNinja, in the third quarter of 2022, and the market share of each category by the end of Q3 in this year. I would like to give a brief summary for the Q3 operating updates during Q3.
We have achieved strong growth, sales growth year-over-year across U.S., Europe, Japan, and rest of the world, which not only reflects consumers' trust in SharkNinja products and willingness to buy, but also proves that the resilience of the growth strategy we have been implementing. At the same time, we have also seen that the U.S. dollar remains strong since the second quarter of this year, and major currencies such as GBP, Yen, and continue to depreciate against U.S. dollars. Which has had a certain negative impact on SharkNinja's foreign currency revenue. If calculated at a constant currency basis, Q3 sales growth was even higher, close to 15%.
Although the overall market sentiment is not strong, the market share of SharkNinja's major categories and among the top, especially in two largest countries where SharkNinja is located, the U.S. and the U.K., SN continues to make progress. We launched a series of revolutionary new products, including Shark FlexStyle, a multifunctional styling hair dryer, Shark Stratos, an upright vacuum with odor neutralizer technology, and Ninja Woodfire Outdoor Grill, which is our first outdoor grill, Ninja Speedi Rapid Cooker & Air Fryer. Retailers have more positive feedback on almost all of our product categories than our peers, including new products, and have confidence on us towards the future. In terms of supply chain, it actually resumed to normal a year later, with 0 backlog by now. We continue to optimize ocean freight rates through our close partnership with steamship lines.
SharkNinja is becoming more and more popular with consumers and customers due to its innovative products and capabilities that truly solve consumers' problems, coupled with its advertising and marketing strategies to drive sales globally in various growing categories. Next, I would like to invite Mr. David Stevenson, Chief Financial Officer of SharkNinja, to share with you the performance of SharkNinja in the third quarter. Ladies and gentlemen, let's welcome Mr. David Stevenson.
Great. Thank you, Leon, and thank you to everybody for joining us today. We'll discuss the gross sales and market share data that we released and give some additional context for those numbers. We'll also talk through some key issues that we dealt with in Q3. We're also very excited to give everyone an update on the great new products that we've recently launched that contributed to our success in Q3. For the three months ended September 30th, 2022, the unaudited gross sales of the SharkNinja segment of JS Global recorded a year-on-year increase of 11.7%. On a constant currency basis, that increase would have been 14.9% as a result of the devaluation of the British pound and Japanese yen.
The growth in Q3 came from all of the areas that we've talked about in previous presentations. We've gained market share in our existing categories. We've launched a tremendous amount of new products and new categories that are driving incremental sales, and we've continued to grow internationally. From a geographic standpoint, sales increased in all three geographies that we report on, including North America, Europe, and other parts of the world, including Japan. This reflects the strength of our strategy around the world, the versatility of our operations, and the commitment from our employees to deliver on our strategy with a focus on outsized success. In North America, the gross sales of SharkNinja for the three months ended September 30th, 2022 increased by 11.1%.
In Europe, the gross sales of SharkNinja in that same period increased by 11.2%, which on a constant currency basis would have been an increase of 30.2%. In the rest of the world, including Japan, the gross sales of SharkNinja during Q3 increased by 29.2% compared to last year, which on a constant currency basis would have been an increase of 43.6%. As a reminder, gross sales are different than the revenue that is reported in our audited financial statements, since they do not take into account allowances for customer returns and promotional funding. In the next slide, we've shown the impact our strategy has had on our market share.
As you can see, our market share grew at a respectable pace within food preparation appliances and cleaning appliances in both the U.S. and the U.K. for the nine months ended September 30th, 2022. In the U.S., our market share within food preparation and cleaning appliances grew 320 basis points and 300 basis points respectively year-over-year. In Great Britain, our market share within electrical cooking pots, vacuum cleaners, and food preparation appliances recorded growth of 970 basis points, 170 basis points, and 400 basis points respectively year-over-year. The only category that we did not grow market share in was cooking appliances in the United States, which declined 50 basis points versus last year.
After experiencing the massive growth in this category that we have over the past three years, we are seeing the market soften overall, which has led to many of our competitors heavily discounting their products to deal with excess inventory. We view this as a temporary correction in the market and fully expect to continue expanding our presence within this category in 2023, driven by great new products like the Ninja Speedi that just launched. I would also like to point out that the data in this category excludes outdoor grills, which we also just launched in Q3. We'll cover more on that later, but it's worth pointing out here since we're building off the success that we've had with indoor grills and developing our first outdoor grill, and the outdoor grilling category is a multi-billion dollar category in its own right.
As I mentioned before, we want to spend a few minutes discussing some of our recent new product launches, which is always our favorite part of these discussions. We know that our ability to grow at a market-leading rate is based on our ability to continually innovate, especially into new product categories that we have not been in before. The pace at which we're doing that now is more rapid than it's ever been, and the first example that I'd like to cover is Shark FlexStyle, which builds upon our first entry into the personal care space following the launch of the Shark HyperAIR hairdryer last year. We launched the FlexStyle on August 23rd, and it has quickly become the most successful direct-to-consumer launch in SharkNinja history.
Whenever we launch a new product, we're focused on providing great performance along with highly differentiated features and functionality, and the Shark FlexStyle is a great example of that. You can style your hair while you dry it with no heat damage, and it quickly transforms between a powerful fast-drying hairdryer and an ultra-versatile multi-styler. This product sold out on Amazon and Best Buy in record time and is currently averaging more than 1,000 units per day sold through our direct-to-consumer site. The momentum is just getting started abroad, and consumers and media can't stop raving about us after the Shark FlexStyle has been in the UK market for just a few weeks.
The next slide shows the new Ninja Woodfire Grill, allowing consumers to grill, air fry, and even smoke meats faster and easier than a leading smoker with 100% natural wood fire flavors. As most of you know, I'm sure the outdoor grilling market in the U.S. and globally is massive, and it's a multi-billion dollar category. We're launching into it with a product that is highly differentiated from anything else that's on the market today. This product allows users to grill, smoke, roast, bake, dehydrate, air crisp, and broil all in one relatively compact design, whereas other products on the market usually only allow you to do one or two of those things.
In addition, since it does not require charcoal or propane to operate, it's a great option for folks living in apartment buildings or that otherwise may not want to cook with propane or charcoal. Again, beauty and outdoor grilling are new categories for us, and the results so far have been really exciting. It's ventures into these new categories that give us even more confidence to enter other new categories, disrupt the traditional players, take a market share, delight consumers, and grow. The new Shark Stratos vacuum cleaner represents another key innovative feature in a category where there hasn't been a lot of innovation other than for Shark. Our new odor-neutralizing technology guards against bad odors inside your vacuum for a fresher smelling home. Staying with the Shark brand for a moment, we also launched the Shark HydroVac. This is one tool that does it all.
The Shark HydroVac mops, vacuums, and cleans itself. It tackles wet and dry messes at the same time with its powerful suction and hydro mopping for deeper cleaning on hard floors and faster results. Consumers are able to seamlessly transition between four types of messes with the touch of a button. This product has been selling extremely well, both online and at brick-and-mortar stores. The last product we'll discuss is the Ninja Speedi Rapid Cooker and Air Fryer, which promises one-touch meals in 15 minutes. This unit builds off the success we've had in recent years with Ninja Foodi multi-cookers by giving people the ability to steam and air fry simultaneously for faster, easier cooking. I encourage you to go online and read the reviews of the Speedi, as well as the other products that I've mentioned, the FlexStyle, the Woodfire, the Stratos, and the HydroVac.
They're selling very well and have been very well received on social media. Turning towards the future and what's next for SharkNinja, a strategy of introducing products into existing categories, new products into new categories, and then bringing those products internationally has guided our growth for over 10 years. Our strategy is elemental to what we do every day, and that will not change. With that, I think we'll turn it over to Q&A at this point.
All right. Thank you, Dave, for your introduction. Now let's enter Q&A session. If you need to ask a question via Zoom platform, please use Raise Hand function. The moderator will announce your name and then ask you to unmute yourself. At that moment, please confirm and unmute yourself and start your question. We can see there are some hands online right now. First of all, let's welcome Rennie Pan to raise the question. Welcome.
Thanks, Dave, for the presentation. This is Rainie Pan from UBS. I got a couple of questions for you. The first is, can you elaborate the driving factors of SharkNinja's gross revenue growth in the third quarter? Also, can you share with us the market supply and demand situation, especially in the U.S. market? Finally, can you talk about how to deal with the decline in the European and U.S. overall markets? Thank you.
All right. Thank you so much. Let's welcome Dave to answer the question.
Great. Thanks, Rainie. Appreciate the question. As far as the drivers of growth for SharkNinja go in the third quarter, there are several. We talked about the international growth that we've been able to experience. We've also launched into several new categories that we just talked about, both last year and this year, which are providing incremental sales. Those include air purification and beauty, both launched last year, as well as outdoor grilling and two-in-one vacuums that we launched this year. For the new categories that we launched last year, we have now been able to introduce new products to those lineups and secure additional placements both in the US and overseas.
We've also continued to gain market share in nearly all of our existing categories in both the U.S. and the U.K., our two biggest markets. That market share gain is a result of the continued innovation that we're bringing to the market in those categories, whereas others are not. Third, we're growing sales in international markets, including Japan and Continental Europe. These three areas are all part of the growth strategy that we have discussed in recent years. As far as some of the growth in Q3 is concerned, and touching on the supply side more specifically, last year we had a tremendous amount of supply chain challenges. We had many difficulties producing product in China and importing it into the U.S., in time for it to ship out.
As a result, many of our sales last year were delayed from Q3 into Q4. Part of the growth year-over-year that we saw in Q3 was simply a function of the fact that we're not seeing those same supply chain disruptions this year. We're actually seeing the supply chain run very smoothly at this point. We're not seeing the same types of delays in the ports that we saw last year and are generally not seeing any shortages with components or anything else like that. Part of the growth in Q3 is driven by just the fact that the supply chain is operating on a normal basis this year compared to last year.
Therefore, we wouldn't expect the 11%+ or close to 12% growth that we saw in Q3 to continue for the full second half. We are still excited about the different drivers that we're able to accomplish and build on to generate some of that growth in Q3. From a demand perspective, we are seeing some of the categories that grew tremendously over the past couple years pull back somewhat, most notably within cooking appliances in the U.S., and in some of the cleaning categories in the U.K. We're also seeing growth in certain areas of the market.
For example, cooking appliances, including air fryers, in the U.K. are selling extremely well, since consumers are concerned about energy prices, and they realize that using an air fryer or a countertop oven to cook their meals is more energy efficient than using a full-sized oven. Overall, many of the categories that we're in are stable from a demand perspective. There are a few that are down. Those decreases are being offset by the new categories and the new products that we've launched into, as well as via international growth and via additional market share that we're gaining, in the U.S. and in Europe. The summary is that supply side is very stable.
Demand side is seeing some softness in certain areas, but we're compensating for that by growing market share and in growing the new categories that we've recently launched into.
Thank you, Dave, for this very detailed explanation and answering. Now let's come to the second question. The second question, let's have Lina Yan from HSBC.
Hello? Can you hear me?
Yes.
Okay. Thanks so much for taking my question. My question is on the gross margin of SharkNinja in third quarter. What are the main reasons for the changes in the GP margin in 3Q? I would appreciate your comments. Thank you.
谢谢你的问题，那这个问题我请Dave来回答。
Thank you so much. I will also have Dave to answer this question. Thank you.
Sure. Thanks for the question. We obviously can't speak about specifics regarding our gross margin rate in Q3 since we haven't released that as part of the operational results update that we just released. Speaking about high level about some of the factors and from a macro perspective, several of the headwinds that we were facing in 2021 have turned into tailwinds in 2022. For example, the Section 301 tariffs have mostly been excluded through the end of the year. We're also starting to see ocean freight costs come down as well. In addition, we're seeing the cost for some of the materials and commodities that had escalated in 2020 and 2021 come down, in addition.
These benefits are partially offset by the negative impact that the devaluation of the British pound and the Japanese yen are having on our gross margin in those markets. We're also reinvesting some of that benefit that we're seeing into promotions and sell price in order to ensure that we maintain a strong top line and continue to grow market share. In general, many of the headwinds that we'd faced in 2021 have started to reverse. Overall, I think many of those factors that impacted our gross margin last year are starting to turn into tailwinds for us in the second half of this year.
Oh, thank you very much, Dave. Like, I think you mentioned about commodity price down, so I think that's also related to the RMB depreciation versus US dollar. Did you enjoy the full tailwind in third quarter, or we will expect more in fourth quarter? That's all of my question. Thank you.
Yeah, sure. We do buy our products in U.S. dollars, but as you know, the majority of them are sourced from China and other areas of Southeast Asia. As the RMB is devaluing or is depreciating, we are able to negotiate lower costs with our suppliers since relative to the dollar, the cost for those commodities and their labor and other costs are relatively less. Yes, we have used the devaluation of the RMB to negotiate lower prices with our suppliers. In general, it takes several months for that to flow through our cost of goods sold since on average it takes, you know, about a month for a product to arrive at the U.S. from China, and we generally carry two to three months' worth of inventory in our warehouses.
It usually takes, you know, three months, maybe four months for those types of things to actually flow through our cost of goods sold. We are starting to see some of those benefits now.
Thank you.
[Non-English content]
Okay, thank you, Dave. Now let's come to the third question. Now let's have CMBI Walter Woo to do the question.
Hi. Hello. Can you hear me?
Yes.
Hi. Hello Max Miao, David Stevenson, and all the management. This is Walter from CMBI. Congratulations on the really amazing third quarter sales growth. Thank you for taking my questions. My first question is about your performance during the Amazon Prime Early Access Sales. Was it as good as your third quarter results or even better? Can you comment a bit on that? Also, can you share about your focus and expectation for the upcoming Black Friday sales as well? The second question is about your marketing and advertising expenditure behind the pretty impressive third quarter growth. Was it driven by a step up on the marketing efforts, or especially when you have more product and category launches?
What aspect and what categories or regions did we focus on? Going into fourth quarter, are we seeing the same trend? These two are all my questions. Thank you.
Yeah, sure. Thanks, Walter. I'll talk about the advertising and marketing spend first. As we reported during our half year results, we spent a little bit less on marketing as a percentage of sales than we had in the previous year. As we mentioned at that time, we were planning still to spend on a full year basis, roughly, you know, the same amount as we had last year on a percentage of sales. With that being said, we are investing heavily in sales and marketing expenses and selling and marketing expenses here in the second half of the year.
As we've spoken about before, all of the categories that we sell in, we always invest in advertising in order to make sure that consumers are aware about all of the new products and features that we're introducing to the market. We use that to make sure that we're generating strong demand for those products, and then ultimately consumers are going to the retailers to seek our products out and buy them. We're also investing in all the new categories that we're launching.
With the success that we've seen with the new beauty products that we've launched as well as the outdoor grill, we wanna make sure those categories are well supported by advertising, since we believe they're very big opportunities for us to grow moving forward and we want to establish ourselves in those markets. We are investing in all categories. In particular, in the newer categories that we're relatively new to in order to grow market share. Specifically regarding Amazon Early Access in our upcoming expectations for Black Friday, you know, as we mentioned earlier, there is some softness in the market, but overall, our performance with Amazon Early Access was relatively strong.
As we look forward to Black Friday, you know, I think that we've got a lot of great placements at retailers, a lot of great promotions lined up. Again, I think, you know, we're gonna continue to see some softness in the market, but I think you're gonna see the trend of us continuing to grow market share by having secured even more placements and deals with retailers for Black Friday continue through the second half of the year. Overall, we're still relatively excited about the upcoming Black Friday selling period.
Thank you. Thank you, Dave. Now let's come to this telephone meeting investors. Now let's see the next question.
The next question comes from George Hsu, JP Morgan. Please go ahead. Thank you.
Thanks management team. Congrats to a strong third quarter result print. We observed some, you know, bright spots in several regions during the quarter where macro has been quite muted. Could you please share more details about the business development across different regions that can help drive growth? Thank you.
Yeah. Absolutely. Happy to speak in a little more detail about some of the results we've seen in specific countries. Overall, we're really pleased with the development of our business in all regions during Q3 and the continued strong consumer demand for our products. We continue to explore the needs of different consumers in local markets and introduce products to those markets. Specifically in the U.K., for example, you know, I think the market is down in many categories, but as I mentioned earlier, we're seeing really strong demand for cooking appliances, in particular air fryers in that market. Consumers are looking for faster, easier ways to prepare meals rather than using larger conventional ovens.
We're generating a lot of growth from that category, and that's, you know, more than offsetting some of the declines that we're seeing in the market for our existing categories, and then we're also still taking market share in those categories too. In the United States, you know, I think a lot of the trends that we've spoken about on this call apply to the U.S. where, you know, again, with these new product categories that we're in are doing extremely well. I think we as a company do a much better job of launching into new product categories on a regular basis in order to generate growth.
As a result, although there may be softness in some of the product categories that we're in, we're able to overcome that softness and still generate growth on the back of the new product categories that we've launched in, as well as the great innovation that we're bringing to market within existing categories that's allowing us to continue to take market share. The Shark Stratos, which is new technology that we're adding to our vacuum cleaner lineup, is a great example of that. Germany and France and the rest of continental Europe, we are still growing in those markets. Those are all still relatively new markets for us.
I think the momentum that we're building is very exciting, and particularly in particular in Germany, where we're focused the most right now. As I said earlier, on a constant currency basis, our sales in Europe were up tremendously. A lot of that growth is coming from continental Europe and in particular from Germany. In Asia Pacific, we're seeing great growth in Japan. I think we've got a great lineup of products that is allowing us to continue to broaden our portfolio that we're selling in that country and take market share. We're also growing through some of the distributors that we use in other markets, including Australia, New Zealand, and South Korea.
I think overall, you know, we're finding ways to grow in really every region that we're in as a result of the fact that we're able to grow our market share and also introduce all of these new product categories that we've launched into each of these markets, which is allowing us to find growth in what is a you know a relatively difficult market at this point.
All right. Thank you so much, Dave, for your answer. Now let's take another question from the telephone dial-in.
Hello, everyone. If you need to raise a question, please press star one. Next we have from Kay Chen. Please raise your question now.
Hello, management. Thank you so much to have my question. Here I would like to ask, will the company adjust guidance for the FY 2022? Thank you.
All right. Thank you. Now we'll ask Mr. Leon Liu to answer the question.
All right. Thank you so much for the question. So far in 2022, the overall economic environment and demand are actually weaker than last year. In such a difficult external environment and with the effort of the management, JS Global Lifestyle actually still achieved a flat revenue in the first half of the year with a significant growth in the gross revenue in Q3, which is not an easy task. Regarding the annual performance guidance in terms of revenue, we maintain our earlier guidance that the revenue in the first half of 2022 compared to that of 2021. The profit figure will continue to trend in the first half of the year.
The investment in omni-channel marketing, promotion expenditure, European market expansions, or the sharp depreciation of the currency such as the pound and the yen has actually had a certain impact on the net profit. In addition, some one-off expenses might be recorded at the end of the year. Although it has yet to be finalized, our prudent consideration in considering all the factors that might affect net profit, we adjusted the expected net profit for the year to a decline of 15% year-on-year. We firmly believe that these investments actually going to respond to the market changes in the current year and will bring sustainable returns in the future. The management team will do its best to execute its established strategy in Q4 to promote the industry. Thank you.
Thank you, Mr. Liu, and let's check out the next question.
Next, let's take the question from He Wei.
Hello, management. Okay. So under the current market and you achieved a growth in Q3, which is really good. I would like to know what is your view on the performance prospects for Q4 this year as well as 2023, and what will be the strategic planning of the company in the future?
All right. Thank you, Mr. He Wei. We'll throw this question to Dave.
Yep, great. As far as the underlying demand for our products is concerned, I think, you know, we're still very excited about the performance that we're gonna be able to achieve in Q4. From a shipments perspective, in terms of how that shows up in our revenue, as I mentioned earlier, I think some of the sales were accelerated this year as a result of the fact that we did not see the same types of supply chain disruptions that we had last year. I think, you know, that product is going to sell well at the retailers through throughout Q4 and throughout the holiday season, in particular, all the new products that we've launched and all of the new categories that we've launched.
Overall, we're optimistic that sales are gonna continue to be strong. You know, as Leon just mentioned, we believe full year sales for a total JS Global perspective will still at least be what they were last year. Ultimately, you know, we're gonna prevail in the holiday season and come out winners in the industry with the new product categories that we've launched.
Thank you, Dave. Due to time limitations, now we'll be entering the closing session. We'll ask Mr. Liu to do a wrap-up. All right.
Thank you, Venus. Thank you all. After more than half hour of communication, I would like to thank all the investors' concern and questions. Thank you so much. Just like Dave mentioned, we're very confident that we're going to navigate through our global macroeconomic challenges. Continue to exceed our overall market performance with our growth strategy by upholding the three growth pillars. I hope that all the investors can continue to pay attention and support JS Global Lifestyle. Thank you all.
Thank you. Ladies and gentlemen, thank you so much. That concludes today's meeting.