By Teresa Rivas
SharkNinja stock was falling 14% on Thursday despite another beat-and-raise earnings report, as investors fretted about its guidance. The CEO says the company is "in a category of its own."
The small-appliance maker said it earned $1.21 per share in the third quarter, on revenue that climbed 33% to $1.43 billion. Consensus estimates called for earnings of $1.13 a share on revenue of $1.31 billion.
For the full year, the company boosted its outlook and now expects to earn between $4.13 and $4.24 a share, with a midpoint below the $4.24 consensus estimate. Its raised revenue guidance for a year-over-year increase of 25% to 26%. That corresponds to roughly $5.22 billion to $5.26 billion, compared with the $5.23 billion average analyst estimate.
SharkNinja shares, at a recent $95.71, had more than doubled this year through the end of trading Wednesday, and roughly tripled since Barron's recommended them in August 2023. Their gains reflect consistent earnings growth: The company has delivered better-than-expected earnings per share every quarter since going public in summer 2023. That string of wins has raised expectations, leading to today's tumble with less-than-stellar guidance.
We spoke with CEO Mark Barrocas before the results. While the home-appliance industry might seem stodgy and low-margin, SharkNinja's two brands have developed a "consumer problem-solving engine" that help it stand out from the crowd, he says.
SharkNinja's success is a product of the diversity of its product lineup -- the company sells items in nearly three dozen categories -- and its demographic base, from teens buying hair products to their parents looking for outdoor cookware. Likewise, SharkNinja items cut across the income spectrum, appearing on shelves at Walmart and LVMH Moët Hennessy Louis Vuitton's Sephora stores. More than a third of sales come from outside North America.
"The goal of the business is to deliver this affordable, accessible innovation for all consumers," says Barrocas.
While consumers are clearly under pressure, as years of inflation have taken their toll, they are still willing to spend when it comes to value, the CEO notes. Though SharkNinja's offerings might not be the lowest-price products, shoppers will reach for them again and again, he says; it's a niche the company fills well.
The company is "not only seeing consumers buying more than one product within a brand, but also across our brands," he says. "For us it's about building lifetime of engagement with the consumer as opposed to selling them a product hoping they come back four years later; we love to sell the consumer two products a year."
Social media is helping fuel that trend, with consumers finding items they might not know they needed -- like the Ninja Slushi professional frozen drink maker or Cripsi air fryer.
According to the CEO, SharkNinja has seven times the engagement on social media as its closest competitor, and the company encourages consumers to "hack" their products and post videos of their tricks and tips.
As Barrocas notes, the comment sections are often filled with happy customers, who say things like "I need a larger kitchen to fit all my Ninja products."
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
October 31, 2024 10:30 ET (14:30 GMT)
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