Good evening. Thank you for taking the time to participate in the 2023 first quarter call. I am your host today, Mark Chen, IR Manager of JS Global Lifestyle. We have the management team following today. Ms. Han Yun, CFO and Executive Director of JS Global Lifestyle. Mr. Lian Liu, Financial Director of JS Global Lifestyle. Mr. Paul Carbone, CFO of SharkNinja. Matt Miao, Board Secretary of Joyoung. I'm Mark Chen, IR Manager of JS Global Lifestyle. First of all, let's welcome Madame Han Yun, CFO and Executive Director of JS Global Lifestyle to deliver an opening speech. Okay, thank you. Dear investors, good evening. Welcome you to take part in this first quarter call of JS Global. Today, we have just released some unaudited first quarter operational data of SharkNinja, including the gross revenue and the market share information for core product categories.
We hope to have a thorough discussion with all of you in the next hour. In Q1, SharkNinja's gross revenue achieved a solid overall growth with an increase of 8.6% on their constant currency basis. This growth primarily came from our continuous increase in market share within existing categories and the outstanding performance of our international business. In the context of a relatively weak global economic environment, our Q1 performance once again validates the resilience of our growth strategy that our company has always adhered to. Due to SharkNinja's innovative products and capabilities that truly discover and address consumer problems, as well as advertising and marketing strategies aimed at driving sales in continuously growing categories worldwide, SharkNinja is increasingly favored by more consumers and clients. Next, I would like to invite Mr.
Paul, Chief Financial Officer of SharkNinja, to share with you the performance of Q1. Let's welcome Paul.
Thank you, Ms. Han Yun. Thank you all for joining us. Today, we'll discuss our gross sales and the market share data that's been released to the public. We'll also share with you some additional information that may help you better understand our business. Regarding the first quarter, 2023, the unaudited gross revenue of JS Global Lifestyle's SharkNinja division recorded a year-over-year increase of 5.4%, and an increase of 8.6% on a constant currency basis. As Ms. Han Yun mentioned, the overall growth in the first quarter once again validates the resilience of our growth strategy and the diversity of our global operations. Let's look at the breakdown by geography. Gross revenue in North America decreased by 7.9% year-over-year. In the first quarter, we continued to face destocking by U.S. retailers, which impacted our revenue during the quarter.
Importantly, POS sales in North America during the same period, the first quarter, grew by mid-single digits. We see this as an encouraging leading indicator, laying a solid foundation for our North America business in the second quarter. In Europe, the performance in the first quarter was very exciting. With gross revenue growing by 69% or nearly 87% on a constant currency basis. We remain confident in the long-term development of our European business. Additionally, in Japan and other regions, first quarter gross revenue increased by nearly 3% year-over-year or 10% under a constant currency base. In terms of Q1 market share, the majority of our core categories continue to grow steadily.
For example, in the U.S., our market share for cleaning appliances, food preparation appliances, and cooking appliances increased by 90 basis points, 40 basis points, and 10 basis points respectively, compared to the same period last year. In the U.K., the market share for electric cookers increased by 420 basis points year-on-year. Vacuum cleaners decreased by 120 basis points, while the food prep category grew by 540 basis points. Additionally, our U.S. market share in the hair care market, including hair dryers and hot hair stylers, grew significantly to more than 17% compared to just above 2% a year ago.
In terms of supply chain and inventory, compared to the same period last year, our transportation time and cost for goods have both significantly decreased, which is having a positive impact on our gross profit margin. As a result, our inventory is at a very healthy level and our gross profit margin, as previously discussed, is on an expanding trend. In terms of new products, we have begun to gradually launch new products to the market. Up to now, Ninja has launched a two-in-one double layer oven, a new coffee maker, a portable blender, and a new ice cream maker this year. As always, we expect Shark and Ninja will release several innovative new products this year, and we remain very excited about their potential. In terms of international market expansion, we have made some encouraging changes in the Asia Pacific region in the first quarter.
In South Korea, we started a comprehensive collaboration with a brand new distributor with an extensive local network. In Australia and New Zealand, we successfully acquired our distribution partner, which will help us carry out long-term direct sales in the Australian and New Zealand markets. In Europe, we recently launched products such as the Shark FlexStyle and the Ninja Woodfire Grill, are generating a lot of excitement, and we have strengthened our leadership by hiring senior leaders in key sales, marketing, product development, and analytics roles. Lastly, I would like to emphasize the three pillars of our growth. SharkNinja will continue to adhere unwaveringly to our growth strategy of, one, introducing new products into existing categories. Two, entering new categories. Three, expanding in international markets.
We will persist in maximizing the synergies between SharkNinja and Joyoung in R&D and supply chain to improve the quality of life for consumers worldwide. That's a summary of SharkNinja's operations in the first quarter of 2023. Let's move to the Q&A session, and we are happy to answer all your questions.
Okay. Please, the operator, tell people how to raise questions. If you want to raise questions, please press star and one to raise. First Star and number one. When you hear the beeping sound, start raising your question. Now let's have with us from Huaxing Capital, Dong Yue to raise a question. All the management team, hello. I have two questions because actually of the surprise increase of this raw material. What is the current profit rate in Q1 and in Q2 and in the future, what is the future trend? That's the first question. The second question is about this stock in the channel. First, I would like to ask about this in North America. This is overall destocking. How is that? If SharkNinja, since March, we have actually going through this low stock one.
What is the future trend of the stock? How do you want to expect for the future? Thank you.
Thank you for your question.
I will just conclude the previous question. The first question is he wants to ask about this essence current growth margin. The prospect, because we have already seen about this raw material and the sea freight costs all being lowered, what is the gross margin expectation in this year? Second question is about this retailers' destock cycle of North America and how would they plan to replenish. Let's have the CFO Paul from SharkNinja to answer this question. Thank you.
Thank you for your question. On the gross margin, as we've discussed, we are seeing lower input costs, component costs, and seeing significantly lower transportation costs. While we are not supplying our gross margin rate in the first quarter or an outlook for the full year, I will reiterate that we see gross margin tailwind in 2023 and expect gross margin expansion during the year of 2023 based on these factors. On your second question about retailer destocking. First, it is mainly I think this is part of your question. It is mainly a U.S.-based comment. Secondly, we expect this to continue through the first half and then normalize in the second half. Today, we don't believe retailers will increase inventory levels back to where they were last year or the year before.
Again, we believe the destocking will go through the first half of this year, and then really normalize in the second half of 2023. Next question, please.
Okay. No more question. Thank you. Please have the second question, operator. We will first have Feng Xianru from Xingye Securities to propose a question. Dear management team, I have three questions I would like to ask. First is we have already seen this Q1 operational data. I would like to know that for European spin-off business and what is the future development trend and space. Second one for H2, for this new product in overseas market, what are the major categories? For APAC question, I would like to ask current APAC team what is the deployment in the future? What is the strategy of the APAC development and what is the growth expectation? Thank you. Okay. For the first of two questions, I still would like to invite Paul to answer.
For the third question, we will have Ms. Han Yun to answer that.
Great. Thank you. We're very excited about our European business and the continued growth. We are confident that we can continue to grow that business across all markets in Europe and see our increased market share as just one of those signs of that of that continued growth. From a new product development, you know, across the second half of this year, we expect new product development to cross both brands, both Shark and Ninja. We are excited about some of the items that we've already launched. I talked about the Ninja Double Oven. We launched the Ninja Blast cordless blender, the Ninja CREAMi, which is our ice cream maker, some cutlery, some Our Shark Matrix Robot Vacuum.
We also have new products that we launched in the back half of 2022, which are getting its first full year across both Shark and Ninja.
Okay. Now let's welcome Madame Han to answer the third question. The third question is for APAC, for this APAC team deployment. Okay, Madame Han. For this question, I also would like to reiterate with all the investors. Part of the investors, as you know, that we have invited Udaya, the former Dyson APAC leader, to join our team. After the spin-off, he will take this JS APAC to lead the whole APAC business. For some emerging markets like Japan and South Korea, we also have certain business, and we will do this Udaya's report. Udaya himself will also report to this JS Global CEO and the Board of Directors. For this APAC strategy of development, we also will do as what we did in Europe.
We will make a more localized method to enter the market to develop more localized products to cater to this APAC customer's demand. We also will fasten this localized R&D and sales team to improve our R&D competence. At the same time, for different APAC countries, we also will use this distributor and the director sales as the two selling models for the growth expectation. I believe you definitely have a great interest to know that our own operational team, we are very confident that in the next three to five years, the APAC team would maintain this very strong and robust growth. This is my preliminary answer for the question. Thank you. Thank you, Paul and Madame Han. Let's have the operator to have the next question from the next investor. Let's have Shi Jingxin from China Merchants Securities. Hello.
Thank you. For this JS leaders, I have three different questions. First one is about this decline of revenue from North America. Do we have a breakdown of all the different categories? For example, by different categories, do you have this brief introduction of different breakdown of different categories from a different dimension? Is we have already known that we have a lot of discounts and promotion in Q1 last year, so generally speaking, it has a little bit decline. From this macro economy, I don't know for this market competition, what is the trend of this price change down to the market? The second one is we have already considered the current US post-sales for this sales terminals. These have all been very good from US market in Q2.
Do we expect to come back to this growth track? The third question is for this current valuation level is actually quite low. We would like to know that whether the company is actually thinking of some other different methods about like a buyback. I still have Paul to answer the first two questions. Thank you.
Great. Thank you. Overall, on a category basis, to your point of the decline in North America revenue, if I look at categories, it was really driven by the cleaning appliance category was down and the food prep category was down. Cooking appliances overall were up in total, and our other, which includes our beauty category, was up significantly year-over-year. Again, I just want to reiterate once again that while our sales to our shipments were down in the first quarter, as we announced, the retailer POS, so the consumers taking product off the shelves, which is the most important sign of consumer demand, was positive in up single digits in the quarter. We are very confident in our growth strategy.
We are very confident in the consumer demand for our brands and our products. We believe that we have a bright 2023 ahead of us.
Now let's give the floor to Madame Han to answer the question about the buyback, the repurchase. For buyback has always been this basic work plan for the company. We also will base on the current working cash flow and the overall operational status to evaluate this possible buyback. Also we'll appropriately evaluate the possible alternatives to buyback when we stick to this sustainable and healthy development. We also try to maximize the benefits of all the investors and shareholders. It has always been this consistent target of our operation. Except for buyback, after doing a split off, we also will do the issuing of this dividend. We also hope to have like increased incentives. We also hope that when we maintain this good development of the company, we will do this continuous and long-term payback of our shareholders. Thank you.
Thank you so much, Ms. Han Yun. Now let's have the operator to invite the next investor to propose the question. The next question comes from Walter Woo of CMB International. Please go ahead. Thank you.
Hi, management. Thank you for taking my questions and congrats for your first quarter results. Sales have finally resumed. My first question is about your sales decline in North America. I know you have mentioned about the category performance and, but, when do you think we can resume a positive growth in North America? This is the first question. The second is about your market shares for the vacuums in Europe. While we have done very well in Europe, I saw a lot of pump, food preparation and cooking appliances. We have experienced a decline in market share for the vacuums. Do you mind sharing the reasons behind? Also my first question is about our geo- focus this year.
Do you mind sharing your major priority for our work this year? Is it a clear inventory? Is it gain market shares? Is it protecting our margins or anything else? Which one is more important? Thank you.
Great. Thank you. I'll start with the North America. I'll talk about our share in the U.K., and then I will address priorities. On the North America revenue. We believe that while sales were down in the first quarter, and as I mentioned, POS was in that mid-single digits, we have some levers to drive the business for the balance of the year. The annualization of newer products such as FlexStyle and the Ninja Woodfire Outdoor Grill, a rebound in the indoor heated cooking category, and the launch of new products will be key performance drivers in North America. Also as a reminder, it was during Q2 last year where competitors were highly promotional in the indoor heated cooking category.
Compared to that, we expect the promotional environment to be more normalized this year. Turning to your question about the decline in the UK vacuum cleaner category, let me give you a little bit more color on that. The decline came primarily from the upright category. While we commanded an unusually large market share of more than 70% last year, that said, we continue to gain share in the cordless category this year. It really, while we lost market share overall, it was really in the upright category, and we are gaining share in the cordless category. As far as priorities, I will tell you it is hard to rank them, and you hit some of our main ones. Let me reiterate as we think about this.
Gaining market share and driving top line sales is an absolute priority of the company. Secondly, expanding our gross margin. As we talked about this year, we do have tailwinds with lower costs, that will be a priority. Lastly, we are looking and have reduced inventory levels. As I think about inventory and wanting to drive top line sales, that is where we will place bets and ensure we have the inventory to drive market share and top line sales. Where appropriate, we will use our balance sheet to ensure we can capture the upside of consumer demand. Thank you.
Thank you very much.
Thank you. Thank you, Paul, for the answer. We first invite the operator to re-announce the way of proposing the question. If you wanna propose a question, please press star and one to wait, and then after hearing the beep sound, please start proposing the question. Please get us connected with the next investor. Now let's have Maggie from HSBC to propose a question. I have three different questions. The first question is for SharkNinja for this split-off, and what's the timeline of this independent listing, and can you give us some more updates? Do we have like a... I cannot hear Maggie anymore. I'm sorry. Okay. Got it. I have already heard the first question from Maggie. The first one is about this update schedule of SharkNinja split-off.
I will first have Madame Han to answer the question. Thank you so much, Maggie, for the question. For this, the structure of this split-off is not having a lot of reference cases available in market. There are a lot of different problems yet to be solved. With our consultant team and our own team, we already have this corresponding solution. For example, like for this withdrawal of all the Hong Kong Stock Exchange investors, how do we withdraw from that? These are actually solving all the different questions. We will all have this very detailed disclosure in this announcement letter. For the solutions have already been well equipped. For the timeline, we hope to have another announcement as soon as possible.
For this targeted listing time, we still hope to finish that before the end of this year. Thank you so much for Madame Han. I have a another question, another two questions. The second question is about APAC market. For this process of the APAC market, can you share with us in the next one to two years, how do you expect the market? How will you break even? The third question is about, like, for this overall marketing expense of SharkNinja. Last year, because in Europe we had some expansion, it has led to this marketing expense was on the rise. I wanna know that this year, for the marketing expense, what is the situation? Okay. Got it. I will first answer the second question about APAC market. Later, the third question will invite Paul to answer that.
For APAC, we have done a lot of work like what Paul has introduced. In South Korea, we have established another distributor relationship. In Australia and New Zealand, we have done this M&A of our original distribution partner maybe for two years later or three years later. We expect the APAC market growth is actually quite sizable, and then the speed is also quite considerable. For the specific number, I cannot share with you now. However, we are very confident. We believe this is actually quite aggressive data. For break-even, in Japan, we have long achieved the break-even. We believe for APAC market in the future we wouldn't have too much cost to be invested. For APAC market, generally speaking, I think it has already reached this break-even point.
For example, like the new markets of Australia and New Zealand, we may invest in a short period of time because we switch from this distribution partner model to this direct sales model. We need to better establish our brand image to help the consumers to build brand confidence. We have to tell the consumers what are our products, what are the advantages. These all require some expenses there. However, we believe for the Australian market, it will be very soon, like Japanese market, in a short period of time. It wouldn't take a long time, I would say. It will soon reach the break-even point. For other markets, it's a similar situation. We will use a more localized team to do this operation.
We hope this overall APAC market, not just about revenue for profit, we also hope to have this a better performance shown to all of you. The third question, we will have the floor to Paul.
Thank you. On marketing expense to your point of last year, I'll start there. We continued to invest in the brand through marketing to drive product awareness, consumer demand. That has continued into 2023. We will leverage our marketing muscle to continue to share the messages about new product development, exciting new ways of using our product. It is a lever that we will continue to use. As we think about the overall P&L, you know, we feel very comfortable where our marketing is, as a % of sales.
Okay. Thank you, Paul. Because of the limited time, we will have the operator to introduce the last question today. Now let's have Yinhe Wealth Management to propose the question. The management team, good evening. I have a question. I would like to know that for the current revenue structure, including cleaning appliance, including like a scraper and vacuum cleaner, kitchen small appliance, what are the different proportions taken by all the different categories? I will still have Paul, CFO from SharkNinja, to answer the question.
Yeah. Thank you for the question. Overall, if I look at Q1, the cleaning appliance category was the largest and is about 50% of the business. Cooking appliances were about 30%, and then the balance of food prep is about 15, and then other is the balance. Roughly 50% cleaning appliances, 30% cooking appliances, approximately 15% of food preparation, and then all other was the balance.
Okay. Got it. Thank you. I also would like to add some answer to Paul for other categories. For example, like the newly promoted hair care category, the growth speed is very obvious. You can see the Q1's growth, and for the proportion taken by that in revenue, it's totally higher than last year. I hope for other different categories will still keep the current speed, and I believe it will help our business to be more diversified. That's all for my answer. Okay. Thank you very much for everyone's questions and the comprehensive answers from the management team. Now I will allow Madame Han to provide a brief summary of today's meeting. Okay. Thank you so much for all the questions proposed by investors. SharkNinja's performance in Q1 has, as we did in the past, surpassed the overall industry performance.
Despite the challenge of the macroeconomy, we are still confident in the long-term growth. We hope that everyone will continue to follow and support us. We look forward to further investment communication with all the investors together with our IR team.