Good morning, and welcome to this next session of the Goldman Sachs Global Consumer and Retail Conference. My name is Brooke Roach, and I cover the apparel, softlines, and brand sector here at GS. I am thrilled to introduce our next session with SharkNinja. Here with me on stage today is Mark Barrocas, CEO and Director, and Adam Quigley, CFO. Welcome, Mark. Welcome, Adam.
Thanks, Brooke.
Thank you.
Mark, let's kick it off with a discussion about the strength of the business. You've now delivered 13 quarters of double-digit growth, and last quarter, you materially increased your fiscal 2026 outlook. As you look across each of these drivers of the business, what gives you the most confidence that SharkNinja can continue this momentum?
Well, Brooke, in the second quarter earnings release, I made a point to really focus on the core and base business, because I think it's something that is really misunderstood by investors. They look at our new products, and they look at our international expansion, and I think they miss the fact that underlying all of this is a really healthy core base business growing at mid- to high- single digits. Then you layer on top of that the new products, and you layer on top of that the international growth, and it translates into a really strong growth algorithm, in mid to high teens. Last quarter, we were low 22% growth. But it's that base business strength that I'm most excited about. If you think about this year, take a category like upright vacuum is probably our most mature category.
We launched a product called the Shark PowerDetect Transformer. It raised average sale price. It improved gross margins. In a market that is declining 1%, our business is growing 5%. So there are lots of pieces across 41 product categories. It's funny, you come into a conference like this, and everyone wants to talk about the new water purification, the Ninja HydraSense that we just launched, or big TAM that we're entering into, or the Ninja Crispi Microwave, in the microwave category that we're launching into, or international expansion. But as you look under the hood of the business, it's the strength of the core base business. We don't have a leaky bucket. We do have a very healthy core base business. Then, again, you layer on top of these other growth drivers, and that gives you the really strong growth that you're seeing from us.
Great to hear. I know there is a lot of discussion around some of the incremental new category expansion of SharkNinja, given that you open one to two new categories per year. Your current TAM is $125 billion- $130 billion, and every year you grow these new categories. What categories do you see as most attractive that you're not in today, and what makes these categories desirable? Are new categories coming at a smaller TAM than current products as you continue to build?
Look, again, you come to these investor conferences, and the answer is, are there any more categories to go into? Is there any more places for SharkNinja to expand to? I think if we were sitting here last year at this time, we entered three new categories this year. The first was water purification, a $6 billion TAM. Okay, is the TAM big? The TAM's enormous. Even if we get 10% of that market, a $600 million business. We entered into microwaves, a $4 billion TAM. We've added $10 billion of TAM in those two categories, and we've developed really disruptive products. Who on social media was talking about water purification before the last four weeks? Who was talking about microwaves on social media?
We've got an incredible campaign that's going to be coming out in advance of Thanksgiving, with lots and lots of creators talking about making their Thanksgiving turkeys in a microwave. There's so much excitement around some of these categories that have been dead categories for years. The third category we launched into was the Shark BlastBoss, which was an indoor/outdoor blower, and that is going to give us a big roadmap of products into 2027 and 2028. So you have a category with virtually no TAM, where we're the only product in the category. You've got products like water and microwave, but what it points to is that there's just so many more places for Shark and Ninja to expand into. What I'm so excited about is, in the U.K., we launched our next generation Shark CryoGlow. It's called the CryoGlow Clinic. It has 2X the power.
It has a chest plate together with it, so you can do your neck and your chest area. It's designed so that you can also do your hands. We found that the hands are kind of the third most important spot on the person's body, that they want to get wrinkle reduction or age reduction. In fact, it's the first place on your body that shows aging. I think with the success that we've had in skin, you're going to see us expand into places like wellness. I think wellness is an incredible growth opportunity for us as we move forward. Physical wellness, environmental wellness in your home, I think that's someplace that Shark absolutely has the right to play in.
I think, Brooke, you've heard me talk about the fact that it starts with, can we come up with something where we can honestly say what gives us the right to be in the business? I think when you look at what we've done in something like water purification, where we're bringing performance of a multi-thousand dollar product to your countertop, and making it so easy for you to be able to get clean water is something that is really not just exciting the category, but is disrupting the category. The last thing I would just say on the question that you brought up is every time we enter into these new categories, it's expanding the demographics of the consumers. I can't tell you how many kids went off to summer camp this year with Shark ChillPill.
There's kids that are asking for our products for Christmas. We're outfitting dorm rooms. If you go to college campuses, look at the number of Shark and Ninja boxes during move-in day. We're outfitting your first apartment when you move into your first apartment, or you have a family, or you have more kids, or you move into a house, so we're taking you through the whole life cycle of the consumer. Again, we're doing it across socioeconomic groups. We're not talking about going after the same consumer. We're selling $59, $79, $99 products to the Walmart consumer, and we're selling thousand-dollar grills at The Home Depot or Sephora, more expensive products.
When you look at the categories we can enter into, when you look at the demographic groups we're targeting and engaging with, when you look at the socioeconomic groups, the TAM's going to continue to keep growing.
Very clear. You mentioned social media and some of the ad campaigns that you have for some of these new product launches, but one really exciting area of growth for SharkNinja is TikTok Shop affiliates and social commerce. What percent of the business do these channels represent in 2026 by geography? How quickly do you see this business growing, and what's differentiated about SharkNinja's approach here that can sustain this momentum, even as competitors might start to catch on a little bit?
Well, look, we're the largest brand on TikTok Shop in the U.S. We're the largest brand in the U.K. We're the largest brand in Germany. Up until May, we were only in the U.S. and U.K. In May, we launched in Germany, France, Spain, Italy, and Mexico. By the holiday selling season, we'll have shops up in 12 or 13 countries around the world. As it relates to how large the percentage of business, that's not something we're going to talk about until we get a full year under our belt. Let's keep in mind that the first product that we sold on TikTok Shop was August of 2025. It's not like this is a channel that is usually mature. We haven't even gone through a full fiscal year selling on TikTok Shop.
Now, the other thing I would say is, I think it is a misnomer to think about this as just TikTok Shop. We are growing with Meta affiliates. We had the Meta team in our office last week with a big hack. They are making a big, big push into this. While TikTok has a first-mover advantage, Meta is reacting. YouTube affiliates, we are doing a lot more with. I think you have to look at this as a whole in terms of the view of social commerce, and what role is social commerce going to play in our business moving forward? I think that some of the retailers are going to get involved in this. Mercado Libre has come out and said that they are going to develop their own affiliate program. I think ultimately, people are recognizing that this is a really interesting channel of distribution.
The consumer today opens up their phone, and they have 1,000 QVC channels, just by opening TikTok or Instagram, so it is an incredible way. The other thing I would say about it is, and I ask investors at almost every meeting that I have, "Have you ever shopped on TikTok Shop?" And 99.9% of you say no, which I find amazing because you are investors in the category. This is the biggest change, I think, in consumer retail since Amazon. It is totally frictionless. I go on TikTok Shop, and I buy three things, and I did not even know that I bought the three things. Stuff just shows up at your house. It is a very, very easy interface and user experience. In terms of SharkNinja's advantage in the space, look, you could say the same thing about Amazon. SharkNinja has a great advantage on Amazon.
Our search and our algorithms, consumers are hitting on our products constantly. Consumers are searching for us by name. I think we have a great moat that we are creating from an analytics standpoint. Social commerce does not stand on its own. There is also a spillover effect. Some amount of that revenue is staying on the platform, but some amount of that revenue is spilling over into other channels. Amazon, walmart.com, our direct-to-consumer site, target.com, Best Buy, all of these people are also beneficiaries of marketing and advertising and selling that is being done on these social commerce sites.
Very clear. Let us shift to some topical trends, and one area that has been in focus is the domestic growth rate. You have indicated confidence in the domestic business growing double digits in the back half and into 2027, despite some toughening comparisons. Can you unpack this? What underpins your confidence, even as many of your key retail partners have started to show some recent volatility?
Yeah. Well, look, we came out of the first quarter, and we reaffirmed that we felt like the domestic business was a double-digit growth business for us. First half of the year, we delivered double digits. We believe we will deliver double digits in the back half of the year as well. I think, Brooke, it points to the strength of the core. We obviously track POS on a daily basis at all of our major retailers, of course, our direct-to-consumer site, our TikTok Shop, and our social commerce business. We are seeing good strength in the core base business. Again, you layer on top of that the new categories and the new products that we are launching, and that is what gives us a lot of confidence, and the support that we are getting from the retailers.
I talked about the fact that Walmart was our one major retailer in 2025 that did not grow in Q4. We had the Walmart team in our office last week. We are set up for a great second half of the year with Walmart. I encourage you to go and look at these vignettes that we have created in Walmart with Ninja products, with all different colors. There are influencers that are going into Walmart stores and are doing content in front of these vignettes. The stores that have them are growing at a very significant clip. We are talking to them about doing all types of things in-store that we would never have discussed a year ago at this time, two years ago at this time. Colors, drop-ins, special collabs, things like that. It does not just go to Walmart. We are having that with Target and Best Buy.
We are doing great with Costco and Sam's . I think what you are seeing in the domestic business is our omni-channel model really on display. A strong brick-and-mortar retail business, a strong dotcom business, a strong direct-to-consumer business, a social commerce business. There are just so many ways for the consumer to be able to engage with us. Again, it all starts with, do we have products that consumers love? Are we getting them excited by the marketing that we are putting out and generating? I think the answer is yes. If you just look at the last couple of days, two days ago, we launched a new product in the cookware space. Today, actually, this morning, we just launched a product called the Ninja MultiPot. Two weeks ago, three weeks ago, we just launched a product called the Shark AquaReach in kind of a 2-in-1 floor cleaning space.
There is just a lot of new innovation that is coming and kind of driving excitement within the domestic business. The last thing I would say is, look, we are going to grow our Canada business. I have never spoken so much about Canada, in the 18 years of running the business as I have in the last two quarters, just because we have evolved and changed our model in Canada from being a very heavy direct import business to being a buy out of the warehouse business. That now has flushed through at the end of Q2. We are going to grow our business in Q3. We are going to see strong growth in Q4, and I think that will position us well as we head into 2027.
One question that we commonly get about your domestic business, on wholesale in particular, is that of inventory levels and how to think about sell-in vs sell-through. As well as shelf space. Do you think that there is more opportunity for more shelf space, and are you seeing anything odd when it comes to inventory levels at retail?
Well, look, the first thing I could say to you is that, I think this year in 2026, for a number of reasons, we missed sales due to not having enough supply in our domestic business. I think our domestic business grew faster than what we expected. I think we had some supply and demand forecasting challenges. If anything, I think that we left some business on the table in 2026 due to low in-stocks and low replenishment rates that we will see hopefully as a benefit as we move into 2027. Our POS has, if anything, been tracking with shipments or even a little bit ahead of shipments. I think me personally, I think inventory levels are light at retail, but I do not think that is as a result of the retailers. I think that is as much of our doing as it is the retailers doing.
That is not something that I think is a big concern for us moving forward.
Very clear. One question we are asking all companies at our conference today is one on the health of the consumer. What are your expectations for the environment in the second half of 2026 by geography? And do you expect things to be the same, better, or worse? Then a follow-up on that, do you expect the health of the consumer to be better, the same, or worse in 2027 vs 2026?
Yeah. Look, this is such an interesting question, right? Because I think everyone comes to these conferences thinking the consumer is down, and then a few months go by and you are like, "Oh, the numbers were better than what we expected from a consumer perspective." I will say that like, listen, since 2008, our industry has grown at a compounded growth rate of 1.5% a year. This is not kind of a frothy industry. Other than the 18 months, 15 months during COVID, we have never experienced a high growth, double-digit type industry growth. Listen, I think the consumer obviously continues to be under pressure. As long as gas prices are sitting at $6, as long as sentiment is what it is. That being said, there is a certain amount of dollars that the consumer has to spend, will spend, is excited to spend.
I think they are going to be very discerning about where they spend those dollars. I have said this over and over again, I do not believe that we are competing against what this group would consider our core competition. I do not think we are competing against other home appliance companies. I think we are competing against Olive Garden, and I think we are competing against Royal Caribbean. I think the question is, does the consumer go out to dinner two more times, or do they buy a Ninja Crispi Pro that they can use at home to cook all the time? Is the consumer going to go on vacation, or are they going to pull back on that cruise and invest it more in holiday purchases? So what our job is is we have to continue to develop exciting, disruptive products.
We have to continue to keep telling our story that drives viral excitement from the consumer, and we need to keep driving our omni-channel strategy. I think over the last 18 years, what that has shown us is there is a certain amount of consumer discretionary spend that we have got to give the consumer a reason to invest it with SharkNinja vs investing it somewhere else.
Another big debate in the industry is on pricing. How much of your growth is being driven by units vs price? Within that price, is it mixed, or is it like for like? Do you expect your prices to be higher, lower? Or the same in the second half of the year vs the rate that you delivered in the first half?
Yeah. In 2026, we haven't raised prices. Let's start with the fact that our growth is coming predominantly from unit growth. We've got a little bit of ASP growth that's happening from a mix perspective in the business as we continue to grow our espresso business at $600, $700. As we continue to grow our outdoor cooking business, things like that. So you've got a little bit of benefit due to ASP mix improvement, but for the most part, it's unit growth. Now, what do I expect as we move forward? I expect us, as we head towards the end of the year and into 2027, I expect us to look at taking a little bit of price.
When you think about commodity costs, when you think about plastic prices, we're going to be in a position as we head towards 2027 to have to start taking small amounts in price. The playbook is basically the tariff playbook that we put in place back in 2025, that I think we did a great job of executing. I think what you'll see from us is some small price increases as we get towards the end of the year, maybe as we get to the beginning of 2027. But like everything, we'll do it, we'll watch it very closely, we'll react accordingly, we'll see what sticks, we'll decide where there are products we want to take price and maybe promote a bit more. But I think we've got a really good playbook as to how to manage that.
Very clear. Before we turn to some of the margin implications of what's happening in the business, let's round out the discussion on strategy with a discussion about your international outlook. Can you speak to the growth that you expect out of your most mature international markets relative to your emerging markets into 2026 and 2027? How are you thinking about U.K., France, and Germany vs the other emerging opportunities and some of the business model distribution transition?
Yeah. Let's talk, first half of the year, I think you saw the U.K. business was very strong. Listen, what's so great about that is if I go back to the beginning of 2025, we experienced tremendous growth in the U.K. in 2024. One of our biggest categories, air fryers, kind of peaked in the beginning of 2025. People said to us, "Oh, is the business now in the U.K. going to be down?" We diversified, we got into a lot more product categories, we expanded distribution, and you're seeing the U.K. business just do great. That points to the power of diversification of the business that maybe a quarter or two quarters, you could see a blip from a category. Now, in the case of air fryers, it was kind of an outsized situation, but we rebounded. We've grown now the last four quarters in the U.K.
We've got really nice growth. I think over time you're going to see the U.K. business look a lot like the U.S. business. It's well-distributed across a lot of channels. It's well-distributed across a lot of product categories. I think if you think about Germany and France, I think there's still a lot of growth in both of those markets. France in particular, Germany's a little bit bigger business than France. I think there's tremendous growth that we have in France moving forward. There's still really nice growth in Germany. Over time, I believe Germany will be a bigger business than the U.K., and the U.K. this year will be a little bit over a billion dollars in revenue. So we've got a lot of growth opportunity for us in Germany. We spent the last seven quarters buying back a lot of distributor markets.
We basically completed that at the end of Q2. I'm super excited about what our direct platform looks like. If Mexico is any indication, we're in for some really nice international growth in 2027. Mexico, we put the staff in place in Mexico City. We built the demand generation flywheel. We expanded channels. I think our Mercado Libre business this holiday season is going to approach our Amazon business in terms of size, and this will be our first holiday season that we're in with Mercado Libre in Mexico. I think we're seeing the same playbook now in some of the other European markets. Poland is an example that we just took over at the end of the first quarter. We just launched two weeks ago on Allegro. Allegro accounts for almost 35%-40% of the retail business in Poland. We weren't on Allegro at all.
When I think about Spain, last holiday season, we had a distributor in Spain. We were selling to a few retail stores, very low SKU count. This holiday season in Spain, we are going to have a direct-to-consumer site up and running. We are going to have TikTok Shop. We are going to have Amazon as a one-piece seller in Spain. Now, retailers in Spain are actually coming to us and saying, "Hey, are there any products we could still get for this holiday season?" That was not at all a conversation we were having with any of the European retailers.
As we have more ways of getting to the end consumer, and the retailer is not the gatekeeper or the blocker of getting to the end consumer, the retailers are looking at the data and they are saying, hey, they are going to get left behind here if they wait until June or July when their planograms change, to get more Shark and Ninja products into the store. Listen, I think you saw really nice growth in Q2. I think the back half of this year, we will continue to see strong international growth. I am really excited. South Africa is now expanding. The Middle East is starting to scale. That was a slow market for us with the war and everything in the first half of the year. We are expanding into markets like Kenya and Nigeria and North Africa.
You think, why? Well, why? Because there is consumer demand. It is not because SharkNinja is trying to just sell its products into the market. Go on to social media and look at comments. When is this product coming to Ghana? When is this product coming to Kenya? There are no borders to the social media that we invest in and run. There is demand that is being created in all these markets as we are running. We now have social media content creators in Dubai and Saudi Arabia. That is translating over into Egypt and Morocco. Content that is being generated in London is being consumed in North Africa and the Middle East markets. There is this tremendous kind of spillover ecosystem that is being created, that is driving a lot of the international growth for us.
Adam, let us turn to you for a moment and to margins. There has been a lot of discussion about what is happening with fuel, freight, and product costs. As you are thinking about that, how should we be thinking about that into 2027? What are the most meaningful opportunities or risks, and what are the offsets or mitigants?
Yeah, sure. I think I sat up here last year and said, "Brooke, there's a lot of moving pieces as we head into 2026." I think I'm here to say the same thing about 2027. That's the fact of the matter, right? Mark mentioned the tariff playbook that we put into place. That's the playbook that's alive and well right now. In a lot of ways, that's our SharkNinja problem-solving playbook. As I think about what's underway, we kicked off a 30 Hacks in 30 Days initiative on gross margin. We like to have fun names, just like our marketing team. That's the work that has to happen today so that by January 1st, those things are already in motion. We are looking at price. We haven't had to do that to date.
The refund helped offset some of the commodities that have already come into 2026, so we feel good about the margin that we're delivering this year. Certainly, as you go to 2027, there's a lot of factors at play. Amongst them, we are operating in categories that do have higher margins, so there's a mixed benefit. Some of the channels that we're in have a mixed benefit. Certainly, commodities, certainly freight, certainly tariffs and the movement that happens there. There's enough at play where what we're doing right now is putting it all on the table. Price, value engineering, and then even OpEx. Our goal, as we've said for a long time, is to grow EBITDA margin at a faster rate than sales. That remains the goal this year. That remains the goal next year.
That might mean that operating expenses, we lean on more next year. Those initiatives as well are underway. There's a lot of great opportunities that we've talked a little bit about thus far with AI and other areas where we can optimize the P&L and ensure that whatever comes our way for gross margin, we've got plenty of levers at our disposal.
Very clear. Can you continue to work towards that goal if tariff rates move back to closer to 20%, if Section 301 come back, as you continue to cycle the tariff tailwinds from this year?
Yeah, certainly. I think when you go to Liberation Day, April 2nd, the numbers that were disclosed that day were big, insurmountable, some might have said. We digested it over the course of a couple of hours, maybe overnight, and then we did start moving to that big number. That big number came down. We reacted, we adjusted, and we pivoted. We are doing the same thing now. We are assuming it goes to 20%. That is the information that is in front of us. Let us say it goes to 20% in 2027. We need to be prepared for that. If it does not happen, great. It does give us more flexibility in terms of what we do within the business. Even as you think about 2026, we were given an unexpected benefit with the refund.
We were opportunistic in both raising our guidance to a disproportionate level of EBITDA outside of the sales increase. We did offset commodities with that as well. We also reinvested in the business. We also pulled some things that would have maybe otherwise come in 2027, maybe some projects would have happened in 2027, and pulled those forward. So we will remain opportunistic as we have that ability. I think the work that we are doing today, it is not just about the commodities of 2027 and the tariffs of 2027. It is structural, foundational changes that are going to make SharkNinja a healthier business. We are not just focused on solving 2027. We are focused on growing at this rate for the long term.
Part of the tariff refund reinvestment was also in reserve for potential competitive pressures. Are you seeing something like that and a need to use that? If that is not needed, will you reinvest it in additional growth-driving initiatives into next year?
Yeah, absolutely. We have a very diligent weekly process where we are looking at point-of-sales data, we are looking at retail inventory, we are looking at the promotional environment, looking at how the consumer is reacting to our prices. With 25 new products launching every year, you have a lot of new opportunities to recalibrate what the pricing is going to be. I think some of those levers we are looking at, even as we go into the holiday. Black Friday, you have a lot of levers in terms of how deep is the promotion, how many units are you promoting. So we are still evaluating those. We are still looking at other opportunities to invest in the business. To answer your question directly, have you seen any new or unexpected competitive pressure? I would say no.
Very clear. One more thing that could potentially help your margin, but also help some of your growth is AI. SharkNinja has been very keen and has really leaned in there. Mark, I know you have spearheaded a lot of AI hack initiatives. One question we are asking all companies in our conference is, do you expect a significant increase in efficiency as a result of AI in 2027 vs 2026? What part of the business is going to change the most as a result of AI over the next year?
In answer to your first question, absolutely, in 2027 vs 2026. I think you are going to see a lot of investments in 2026 that are going to pay off in 2027. The most tangible one right now that I can point to is the commercial side of our business. Pricing, promotions, media analytics. The business spends over $800 million a year on marketing and advertising. We spend a significant amount on pricing and promotions. I publicly said we brought in Palantir to help us, and they have really focused on the commercial side of our business, and the results that we are seeing are extraordinary. It is early days. We are kind of five weeks into launching the first phase with them and leveraging it in the business, but it has totally changed the way that we are operating as a company.
It took us days and days to analyze POS data on a weekly basis. It is getting spit out in two hours by agents. I think the commercial side, first and foremost, is the biggest tangible area of opportunity. Adam now is talking to Palantir in areas like finance. We are talking to them about supply chain. How do we manage our supply chain more efficiently on both the demand side as well as the supply planning side? That is our biggest kind of macro project. We are working with Salesforce on a number of things to improve our D2C experience and drive more e-commerce business, and particularly on the service side of the business now that we have implemented Agentforce. You are going to see a lot more of our calls being answered by agents and being done better by agents. It is not just a cost savings.
I think, with all of our products, a live agent just cannot read off of so many manuals, whereas an AI agent can do that a lot more effectively. We have a project that we have called AI/Sharks. We went out, we hired 100 Master's and PhD students to come in as co-ops and work on what we call kind of quick-hit AI projects across the business. How do we just drive greater efficiency? Areas like order management, distribution, logistics. It has also become a great talent pipeline for us, so they are in the company. We are leveraging this incredible talent pool that exists in Boston and London, in our offices, and then we are working to convert some of those people into full-time associates into the business.
And we expect moving forward, that we will have this as an ongoing initiative where we will always have 100 AI/Sharks in the company. It just brings a whole different energy and creativity element of people that have not been in business. They are usually AI proficient, coming out of data science and computer science backgrounds, but now we are partnering them with experts in the functional areas. When you put those two together, it becomes really impactful because I will say there is a lot of functional experts in our business that are not AI literate, that are not understanding how to leverage AI in the right way.
If you can put them together with somebody that is able to do that, where they can verbalize what I am looking to do and then have somebody actually sit there with them and develop the tools from an AI perspective, we found that to be a really, really great benefit. We call it these kind of quick-hit initiatives, and we have already completed about 65 of them across the company. You will see, none of those are going to be the be-all end-all, but when you do 65 or 100 of them, you are going to start to see a lot of efficiency impact as we move into 2027.
Really great to hear. With that, Mark and Adam, I think we are about out of time. Thank you very much for joining us today, and thanks for all of the audience for tuning in.
Thank you.
Thank you.