This is part 2 of my three part thesis on SharkNinja (SN) and why it could be interesting on the heels of their spinoff. If you missed part 1 yesterday, you can find it here. Today’s post is going to provide an overview of what SN is and the bull thesis.
Andrew, are they doing anything differently? You seeing flavors of Dyson here?
I see a fast follower model with distribution wins the last couple of years. They're now going into headwinds. Numbers show gross margin decreasing, EBITDA margins decreasing...
What's the bet here? - more distribution wins, white space geographies and increased demand?
The 2022 margin tank was an indutry-wide thing, due to the tight supply in 2021 (high base) and overstocking in channel in 2022 (probably it was because retailers was too optimistic). Plus SN was and is doing R&D and marketing for new products and new markets, so it's reasonable for SN to have a bit higher-than-usual expenses.
The indsutry is not going headwinds. Instead, the destocking of retailers has come to an end in the middle of this year. So given there's no huge economic downturn, we can expect retailers to start restocking and the whole industry will benefit on both growth rate and margin.
For the whitespace, SN's new products in the US such as grill is one. But I'm more excited in Europe. It's the number one in various categories in the UK now. And Europe Continent is groing even faster.
Great stuff Andrew, and great find on the massive RSU grant.
Great insights Andrew! THe infomercial gene transfering to TT is very interesting.
Great find and DD Andrew. Any thoughts on index inclusion and the benefits of passive flows in the coming months?
Thanks as always Andrew!
Andrew, are they doing anything differently? You seeing flavors of Dyson here?
I see a fast follower model with distribution wins the last couple of years. They're now going into headwinds. Numbers show gross margin decreasing, EBITDA margins decreasing...
What's the bet here? - more distribution wins, white space geographies and increased demand?
In analyzing the business, what am I missing?
The 2022 margin tank was an indutry-wide thing, due to the tight supply in 2021 (high base) and overstocking in channel in 2022 (probably it was because retailers was too optimistic). Plus SN was and is doing R&D and marketing for new products and new markets, so it's reasonable for SN to have a bit higher-than-usual expenses.
The indsutry is not going headwinds. Instead, the destocking of retailers has come to an end in the middle of this year. So given there's no huge economic downturn, we can expect retailers to start restocking and the whole industry will benefit on both growth rate and margin.
For the whitespace, SN's new products in the US such as grill is one. But I'm more excited in Europe. It's the number one in various categories in the UK now. And Europe Continent is groing even faster.
Hope that helps.