JS Global Lifestyle Company Limited

Good evening. Thank you for taking the time to participate in the 2023 first quarter call. I am the host today, Mas Chen, I am manager of JS Global Lifestyle. We have the management team following today. Ms. Hai Ren, CFO and Executive Director of JS Global Lifestyle. Mr. Lian Liu, Financial Director of JS Global Lifestyle. Mr. Paul Carboni, CFO of Shark Ninja. Board Secretary of Joy Young. I'm Mats Chen, IR Manager of JS Global Lifestyle. First of all, let's welcome Madame Hai Lin, CFO and Executive Director of JS Global Lifestyle to deliver an opening speech. Okay, thank you. Dear investors, good evening. Welcome you to take. hosting this first quarter call of OJS Global today. We have just released some on audit of the first quarter operational data of ShaktNinja, including the gross revenue and market share information for a core part of categories. We hope to have a thorough discussion with all of you in the next hour. In Q1, ShaktNinja'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 Chuck Ninja's innovative products and capabilities, they've truly discovered and addressed consumer problems, as well as advertising and marketing strategies aimed at driving sales in continuously growing categories worldwide. Chuck Ninja is increasingly favored by more consumers and clients. Next, I would like to invite Mr. Paul, Chief Financial Officer of Chuck Ninja, to share with you the performance of Q1, and let's welcome Paul.

Thank you, Ms. Han, and 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 Shark Ninja division recorded a year-over-year increase of 5.4%, and an increase of 8.6% on a constant currency basis. As Ms. Hahn 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 US retailers, which impacted our revenue during the quarter. But 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 basis. In terms of Q1 market share, the majority of our core categories continue to grow steadily. For example, in the United States, 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 UK, 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 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 Flex Dial 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. Dark Ninja will continue to adhere unwaveringly to our growth strategy of one, Introducing new products into existing categories. Two, entering new categories. And three, expanding an international market. We will persist in maximizing the synergy between Shark Ninja and Joy Young in R&D and supply chain to improve the quality of life for consumers worldwide. That's a summary of Shark Ninja's operations in the first quarter of 2023. Now, let's move to the Q&A session, and we are happy to answer all your questions.

Okay.