Market Outlook and Guidance
Q: What's your outlook for industry growth and company guidance?
A: The market remains challenging, with the industry down in low single digits. We expect it to be flat in the second half of the year after declines in 2022 and 2023. Despite this, we've raised our guidance based on strong demand, not just on hopes for new products. We're taking a conservative position and will update guidance at the end of the second quarter as we gain more visibility. " " "

Gross Margin and Promotions
Q: How do you view gross margins amid a promotional environment?
A: Our gross margin improved this quarter, and we're focused on delivering compelling innovation with great quality at an extraordinary value. While the market is promotional, we're investing over 6% of sales in R&D and over 9% in marketing, creating unique products and strong demand. By balancing innovation, messaging, and pricing, we aim to maintain robust margins. "

Inventory and Restocking Dynamics
Q: Can you clarify the restocking impact on your sales?
A: We ended 2023 with significantly lower weeks of supply due to strong holiday sell-through. In Q1, we replenished some inventory, but we're still down to 8 weeks of supply, one less than last year and three less than two years ago. Going forward, we expect shipments and point-of-sale to align, and any changes in retailer inventory levels will influence our results. " "

International Expansion
Q: What's the progress and outlook for international growth?
A: We're seeing strong international growth, especially in Europe. In the UK, our largest market outside North America, we're expanding into more categories, now offering about 20 of our 33 categories. In Germany and France, we experienced triple-digit growth and are selling about 10 product categories, with a long runway ahead. We're investing in teams and infrastructure to support this expansion. " "

Category Expansion and New Products
Q: What are your plans for category expansion and new products?
A: We're excited about new category launches like the Ninja FrostVault cooler, which sold out completely, and the Shark FlexBreeze fan. There's significant opportunity outside the home, and we're expanding into outdoor segments and beauty beyond hair care. We plan for each of our brands to launch at least one new product category a year, with 25 new products coming to market in '24. "

Contributions to Growth
Q: What's driving your strong sales performance?
A: Our growth is driven by a healthy core business in vacuums, blenders, and cooking products; expansion into new categories launched in '22 and '23; and increased distribution through new retailers like Sephora, Ulta, and DICK's Sporting Goods. Inventory replenishment after strong Q4 sales also contributed. Combined, these factors led to a 22% sales increase in North America in Q1. "

Strategy and Capital Allocation
Q: Has your strategy changed since going public?
A: Our strategy remains the same as it has for the past 16 years. We focus on positively impacting consumers by turning proprietary insights into disruptive innovation and driving efficiency in our global supply chain. We continue to invest in storytelling and creating consumer demand through various channels, maintaining a dominant omnichannel strategy. "

Consumables and Recurring Revenue
Q: How is the recurring revenue opportunity developing?
A: Beyond Thirsti, we're seeing high attach rates for proprietary chemicals in our carpet and hard floor cleaners, as well as strong accessory sales in outdoor cooking. For Thirsti, we're learning which flavors resonate and are refining our offerings. We'll launch Thirsti in the UK later this year and plan to apply these insights to other consumable categories in our pipeline. "

Cleaning Segment Outlook
Q: What's your outlook for the cleaning appliances segment?
A: Our global vacuum business grew a few percent, gaining share in a declining market. We expect to accelerate growth in the cleaning category through new product launches over the next few months and expanded retailer placements in markets like Germany and France. Overall, we're optimistic about continued growth in the cleaning segment throughout the year. "

Balancing Pricing and Margins
Q: How do you balance pricing and gross margin?
A: We aim to deliver innovation and quality at extraordinary value, carefully balancing pricing and margins. Even in a promotional market, our investments in R&D and marketing help us create unique products that offer great value to consumers, supporting our gross margins. For example, our Ninja FrostVault cooler was well-received for its pricing and value compared to premium competitors. "