Conference Transcript - SN 2026-09-15

Brooke Roach, Analyst — Goldman Sachs

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, soft lines, and brand sector here at GS, and I'm thrilled to introduce our next session with Shark Ninja. Here with me on stage today is Mark Barocas, CEO and Director, and Adam Quigley, CFO. Welcome, Mark. Welcome, Adam.

Adam Quigley, CFO

Thanks, Brooke.

Brooke Roach, Analyst — Goldman Sachs

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 26 outlook. As you look across each of these drivers of the business, what gives you the most confidence that Shark Ninja can continue this momentum?

Mark Barrocas, CEO

Yeah. 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 you know underlying all of this is a really healthy core-based business growing at mid to high single digits and you know then you layer on top of that you know the new products and you layer on top of that the international growth and it translates into, you know, a really strong growth algorithm, you know, in mid to high teens. You know, last quarter we were low, you know, 22% growth. But it's that base business strength that I'm most excited about. I mean, if you think about this year, I mean, take a category like Upright Vacuum is probably our most mature category. We launched a product called the Shark Transformer. It raised average sell price. It improved gross margins in a market that is declining 1%. Our business is growing 5%. You know, so there's lots of pieces. I mean, across 41 product categories, you know, it's funny, you come into a conference like this, and everyone wants to talk about, you know, the new water purification, the Ninja Hydra Sense that we just launched, or, you know, Big Tam that we're entering into, or the Crispy Microwave, you know, and 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-based business. We don't have a leaky bucket. We do have a very healthy core-based business. And 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.

Brooke Roach, Analyst — Goldman Sachs

It's 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 to $130 billion. 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?

Mark Barrocas, CEO

Look, again, you come to these investor conferences And the answer is, like, are there any more categories to go into? Is there any more places, you know, for Shark Ninja to expand to? And I think if we were sitting here last year at this time, you know, we entered three new categories this year. You know, the first was water purification. I mean, a $6 billion TAM. Okay, so is the TAM big? I mean, the TAM's enormous. Okay, even if we get 10% of that market, you know, it's a $600 million business. We entered into microwaves, you know, a $4 billion TAM. So we've added $10 billion of TAM in those two categories, and we've developed really disruptive products. I mean, who on social media was talking about water purification before the last four weeks? Who was talking about microwaves on social media? I mean, 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. You know, I mean, there's so much excitement, you know, around some of these categories that have been dead categories for years. And then the third category we launched into was the Shark Blast Boss, which was an indoor-outdoor blower. And that is going to give us a big roadmap of products into 27 and 28. So, you know, you have a category with, you know, virtually no TAM, where we're the only product in the category. You've got products like water and microwave. But, you know, what it points to is that there's just so many more places for Shark and Ninja to expand into. I mean, what I'm so excited about is, you know, we just launched our next 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 kind of 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, you know, as we move forward. Physical wellness, environmental wellness in your home. You know, I think that's someplace that Shark absolutely has the right to play in. And I think, Brooke, you've heard me talk about the fact that it starts with, you know, 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, you know, where we're bringing, you know, performance of a multi thousand dollar product to your countertop, you know, and making it so easy for you to be able to get clean water, you know, is something that is really not just exciting the category, but is disrupting the category. And then 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 mean, I can't tell you how many kids went off to summer camp this year with shark chill pills. You know, I can't you know, there's there's kids that are asking for our products for Christmas. You know, we're outfitting dorm rooms. I mean, if you go to college campuses, I mean, look at the number of shark and ninja boxes, you know, during move in day. You know, we're outfitting your first apartment when you move into your first apartment or you have a family, you know, you have more kids or you move into a house. So we're taking you through the whole life cycle of the consumer. And again, we're doing it across socioeconomic groups. We're not talking about going after the same consumer. I mean, we're selling $59, $79, $99 products to the Walmart consumer, and we're selling $1,000 grills at Home Depot or Sephora, more expensive products. So I think 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 is going to continue to keep growing.

Brooke Roach, Analyst — Goldman Sachs

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 Shark Ninja 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?

Mark Barrocas, CEO

And what's differentiated about Shark Ninja's approach here that can sustain this momentum, even as competitors might start to catch on a little bit? yeah well look um you know we're the largest brand on tiktok shop in the u.s we're the largest brand in the uk um we're largest brand in germany we uh up until may we were only in the u.s and uk uh in may we launched in germany france spain italy and mexico uh by the holiday selling season We'll have shops up in 12 or 13 countries around the world. So, you know, as it relates to, like, how large is a percentage of business, I mean, that's not something we're going to talk about until we get kind of a full year under our belt. I mean, let's keep in mind that, like, the first product that we sold on TikTok shop was August of 25. I mean, it's not like this is a channel that, you know, is usually mature. I mean, we haven't even gone through a full year, you know, full fiscal year selling on TikTok shop. Now, the other thing I would say is I think it's a misnomer to think about, you know, this as just TikTok shop. You know, we're growing with meta affiliates. You know, we had the meta team in our office last week with a big hack. They're making a big, big push into this. While TikTok has a first mover advantage, TikTok is, meta's reacting, YouTube affiliates we're doing a lot more with. So 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're going to develop their own affiliate program. I think ultimately people are recognizing that this is a really interesting channel of distribution. I mean, the consumer today opens up their phone and they have a thousand QVC channels, you know, just by opening TikTok or Instagram. So it's an incredible way. And 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 like 99.9% of you say no, which I find amazing because, you know, your investors in the category, this is the biggest change, I think, in consumer retail since Amazon. It's totally frictionless. I mean, I go on TikTok shop and I buy three things and I didn't even know that I bought the three things, you know, stuff just shows up at your house. And so, you know, it's a very, very easy interface and user experience. Now, in terms of, you know, Shark Ninja's advantage in the space, look, I mean, you could say the same thing about Amazon. You know, I mean, Shark Ninja has a great advantage on Amazon. I mean, we, you know, our search, you know, and our algorithms, you know, consumers are hitting on our products constantly. Consumers are searching for us by name. I think we have a great moat that we're creating from an analytics standpoint. Social commerce doesn't stand on its own. There's also a spillover effect. So, you know, 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, you know, Best Buy. I mean, all of these people are also beneficiaries of, you know, marketing and advertising and selling that's being done on these social commerce sites.

Brooke Roach, Analyst — Goldman Sachs

Very clear. Let's shift to some topical trends. And one area that's been in focus is the domestic growth rate. You've 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?

Mark Barrocas, CEO

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. I mean, we believe we'll deliver double digits in the back half of the year as well. I think, Brooke, it points to the strength of the core. You know, 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. And we're seeing, you know, good strength in the core-based business. You know, again, you layer on top of that the new categories and the new products that we're launching. And that's what gives us a lot of confidence and the support that we're getting from the retailers. You know, I talked about the fact that Walmart, you know, was our one major retailer in 25 that didn't grow in Q4. We had the Walmart team in our office last week. We're set up for a great second half of the year with Walmart. I encourage you to go and look at these vignettes that we've created in Walmart with Ninja products, with all different colors. There's 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. I mean, we're 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. And it doesn't just go to Walmart. I mean, we're having that with Target and Best Buy. We're doing great with Costco and Sam's. So I think what you're seeing in the domestic business is our omni-channel model really on display. You know, a strong, you know, brick and mortar retail business, a strong dot com business, a strong direct to consumer business, a social commerce business. There's just so many ways for the consumer to be able to engage with us. But again, it all starts with do we have products that consumers love and are we getting them excited by the marketing, you know, that we're putting out and generating? And I think the answer is yes. I mean, if you just look at the last couple of days, I mean, 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. You know, two weeks ago, three weeks ago, we just launched a product called the Shark Aqua Reach in kind of the two-in-one floor cleaning space. So there's just a lot of new innovation that is coming and kind of driving excitement within the domestic business. And the last thing I would say is, look, you know, we're going to grow our Canada business. I mean, I've never spoken so much about Canada, you know, in the 18 years of running the business as I have in the last, you know, two quarters, just because, you know, we've evolved and changed our model in Canada from being a very heavy direct import business to being a buyout of the warehouse business. And so that now has flushed through at the end of Q2. We're going to grow our business in Q3. We're going to see strong growth in Q4. And I think that'll position us well as we head into 27.

Brooke Roach, Analyst — Goldman Sachs

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 versus sell-through, as well as shelf space. Do you think that there's more opportunity for more shelf space? And are you seeing anything odd when it comes to inventory levels at retail?

Mark Barrocas, CEO

Well, look, the first thing I can say to you is that I think this year in 26, 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. So if anything, I think that we left some business on the table in 26 due to low in stocks, you know, and low replenishment rates that we'll see hopefully as a benefit as we move into 2027. You know, our POS has, if anything, been tracking with shipments or even a little bit ahead of shipments. So, you know, I think me personally, I think inventory levels are light at retail, but I don't think that's as a result of the retailers. I think that's as much of our doing as it is the retailers doing. So that is not something that I think is a big concern for us moving forward.

Brooke Roach, Analyst — Goldman Sachs

Very clear. One question we're 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 26 by geography? And do you expect things to be the same, better or worse? And then a follow-up on that. Do you expect the health of the consumer to be better, the same or worse in 27 versus 26?

Mark Barrocas, CEO

Yeah, you know, look, this is such an interesting question, right? Because, I mean, I think everyone comes to these conferences thinking, you know, the consumer is down. And then, you know, a few months go by and like, oh, the numbers were better than what we expected, you know, from a consumer perspective. um as i will say that like listen since 2008 our industry has grown at a compounded growth rate of one and a half percent a year uh this is not kind of a frothy uh industry i mean other than the 18 months 15 months during covid uh you know we've never experienced you know in a high growth you know double digit type industry growth um listen i i think the consumer obviously continues to be under pressure. I mean, as long as gas prices are sitting at six dollars, you know, as long as, you know, sentiment, you know, is what it is. That being said, you know, there is a certain amount of dollars that the consumer has to, you know, has to spend, will spend, is excited to spend. And I think they're going to be very discerning about where they spend those dollars. And, you know, I've said this over and over again, like, I don't believe that we're competing against what this group would consider our core competition. I don't think we're competing against other home appliance companies. I think we're competing against Olive Garden, and I think we're 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 Crispy 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, you know, and invest it more in, you know, holiday purchases. So, you know, what our job is, is we have to continue to develop exciting, disruptive products. You know, we have to continue to keep telling our story, you know, that drives viral excitement from the consumer. And we need to keep driving our omni-channel strategy. And, you know, I think over the last 18 years, was that what that has shown us is there is a certain amount of consumer discretionary spend that we've got to give the consumer a reason to invest it with Shark Ninja versus investing it somewhere else.

Brooke Roach, Analyst — Goldman Sachs

Another big debate in the industry is on pricing. How much of your growth is being driven by units versus price? And within that price, is it mix or is it like for like? And do you expect your prices to be higher, lower, or the same in the second half of the year versus is the rate that you delivered in the last half.

Mark Barrocas, CEO

So in 26, we haven't raised prices. Okay, so let's start with the fact that, I mean, our growth is coming predominantly from unit growth. We've got a little bit of ASP growth that's happening from a mixed 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, you know, it's unit growth. Now, what do I expect as we move forward? You know, I expect us as we head towards the end of the year and into 27, I expect us to look at taking a little bit of price. you know when you think about commodity costs when you think about you know plastic prices we're going to be in a position you know as we head towards 27 to have to start taking small amounts in price and the playbook is basically the tariff playbook that we put in place you know back in 25 that I think we did a great job of executing and so I think what you'll see from us is, you know, some small price increases as we get towards the end of the year, maybe as we get to the beginning of 27. But like everything, you know, we'll do it. You know, we'll watch it very closely. We'll react accordingly. You know, we'll see what sticks. You know, we'll decide, you know, 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.

Brooke Roach, Analyst — Goldman Sachs

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 27? And how are you thinking about UK, France, and Germany versus the other emerging opportunities and some of the business model distribution transitions.

Mark Barrocas, CEO

Yeah. So, so let's talk, I mean, first half of the year, I think you saw, you know, the UK business was very strong. Listen, what's so great about that is if I go back, you know, to the beginning of 25, you know, we experienced tremendous growth in the UK in 24. You know, one of our biggest categories, air fryers kind of peaked, you know, in the beginning of 25, you know people said to us oh you know is the business now in the UK going to be down we diversified you know we got into a lot more product categories we expanded distribution and you know you're seeing the UK business you know just do great and you know that points to the power of diversification of the business that you know 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, you know, we rebounded, you know, we've grown now the last four quarters in the UK. We've got really nice growth. And I think over time, you're going to see the UK business look a lot like the US business. You know, 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. You know, France in particular, you know, 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. You know, 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. I mean, if Mexico is any indication, we're in for some really nice international growth in 2027. Mexico, you know, we put the staff in place in Mexico City. We built the demand generation flywheel. We expanded channels. You know, I think our MercadoLibre 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 MercadoLibre in Mexico. And I think we're seeing the same playbook now in some of the other European markets. I mean, 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 percent of the retail business in Poland. We weren't on Allegro at all. You know, when I think about Spain, you know, last holiday season, we had a distributor in Spain. We were selling to a few retail stores, you know, very low skew count. This holiday season in Spain, we're going to have a direct to consumer site up and running. We're going to have TikTok shop. We're going to have Amazon, you know, as a one piece seller in Spain. You know, we're now, you know, retailers in Spain are actually coming to us and saying, hey, you know, 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. But 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're saying, hey, you know, they're going to get left behind here if they wait until June or July when their planograms change, you know, to get more Shark and Ninja products into the store. So, listen, I think, you know, you saw really nice growth in Q2. I think the back half of this year, you know, will continue to see strong international growth. You know, and I'm really excited. I mean, you know, South Africa is now expanding. The Middle East, you know, is starting to scale. You know, that was a slow market for us with the war and everything in the first half of the year. You know, we're expanding into markets like Kenya and Nigeria and North Africa. Now, you think, why? Well, why? Because there's consumer demand. It's not because SharkNinja is trying to just sell its products into the market. I mean, go on to social media and look at comments. You know, when's this product coming to Ghana? You know, when's this product coming to Kenya? I mean, there's no borders to the social media that we invest in and run. And so there's demand that's being created in all these markets as we're running. We now have social media content creators in Dubai and Saudi Arabia. You know, that's translating over into Egypt and Morocco. You know, content that's being generated in London, you know, is being translated, you know, is being, you know, consumed, you know, in North Africa and the Middle East markets. So there's this tremendous kind of spillover ecosystem that's being created, you know, that's driving a lot of the international growth for us.

Brooke Roach, Analyst — Goldman Sachs

Adam, let's turn to you for a moment and to margins. There's been a lot of discussion about what's happening with fuel, freight, and product costs. As you're 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?

Adam Quigley, CFO

Yeah, sure. I mean, I think I sat up here last year and said, Brooke, there's a lot of moving pieces as we head into 2026. And I think I'm here to say the same thing about 2027. You know, and 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 Shark Ninja problem-solving playbook. As I think about, you know, 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, you know. And 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. And so we feel good about the margin that we're delivering this year. But certainly as you go to 27, there's a lot of factors at play. Amongst them, we are operating in categories that do have higher margins. And so there's a mixed benefit. Some of the channels that we're in has a mixed benefit, but 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, you know, and then even OPEX, right? 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, you know, 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.

Brooke Roach, Analyst — Goldman Sachs

It's very clear. Can you continue to work towards that goal if tariff rates move back to closer to 20% if Section 301s come back as you continue to cycle the tariff tailwinds from this year?

Adam Quigley, CFO

Yeah, certainly. I think when you go to Liberation Day, April 2nd, right, the numbers that were disclosed that day were big, insurmountable. Some might have said we digested it over the course of a couple 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're doing the same thing now. We're assuming it goes to 20%, right? That's the information that's in front of us. Let's say it goes to 20% in 27. We need to be prepared for that. If it doesn't happen, great. It does give us more flexibility in terms of what we do within the business. Even as you think about 26, 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 but we also reinvested in the business we also pulled some things that would have maybe otherwise come in 27 maybe some projects would have happened in 27 and pulled those forward so we'll remain opportunistic as we have that ability and i think the work that we're doing today it's not just about the commodities of 27 and the tariff of 27 it is structural foundational changes that are going to make shark ninja healthier business right we're not just focused on solving 27 we are focused on growing at this rate you know for the long term.

Brooke Roach, Analyst — Goldman Sachs

Part of the tariff refund reinvestment was also in reserve for potential competitive pressures. Are you seeing something like that and need to use that? And if that's not needed, will you reinvest it in additional growth driving initiatives into next year?

Adam Quigley, CFO

Yeah, absolutely. I mean, we have a very diligent weekly process where we're looking at point of sales data, we're looking at retail inventory, we're 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. And I think some of those levers we're looking at even as we go into the holiday. Black Friday, you've got a lot of levers in terms of how deep is the promotion, how many units are you promoting. So we're still evaluating those. We're still looking at other opportunities to invest in the business. But to answer your question directly, have you seen any new or unexpected competitive pressure? I would say no. Very clear.

Brooke Roach, Analyst — Goldman Sachs

One more thing that could potentially help your margin but also help some of your growth is AI. And Shark Ninja has been very keen and has really leaned in there. And Mark, I know you've spearheaded a lot of AI hack initiatives. One question we're asking all companies at our conference is, do you expect a significant increase in efficiency as a result of AI in 27 versus 2026? And what part of the business is going to change the most as a result of AI over the next year?

Mark Barrocas, CEO

So in answer to your first question, absolutely in 27 versus 26. I think you're going to see a lot of investments in 26 that are going to pay off in 27. The most tangible one right now that I can point to is the commercial side of our business. You know, pricing, promotions, media analytics. You know, the business spends over $800 million a year on marketing and advertising. You know, we spend a significant amount on pricing and promotions. uh you know i publicly said you know we we brought in palantir to help us and they've really focused on the commercial side of our business and the results that we're seeing are extraordinary um you know it's early days we're kind of five weeks into launching you know kind of the first phase with them and and leveraging it in the business but it's totally changed the way that we're operating as a company. I mean, we, you know, it took us, you know, days and days to analyze POS data on a weekly basis. It's getting spit out in two hours, you know, by agents. So I think the commercial side, you know, first and foremost is the biggest tangible area of opportunity. You know, Adam now is talking to Palantir in areas like finance. You know, we're talking to them about supply chain you know how do we manage our supply chain more efficiency efficiently on both the demand side as well as the supply planning side um so so that is you know our biggest kind of macro project i mean we're working with sales force you know on a number of things you know to improve our d2c uh experience and and drive more e-commerce business and particularly on the service side of the business, now that we've implemented agent force, you know, you're going to see a lot more of our calls being answered by agents, you know, and being done better by agents. I mean, not just, you know, it's a cost savings. I think, you know, with all of our products, you know, an agent, you know, a live agent just can't read off of so many manuals, you know, whereas an AI agent, you know, can do that a lot more effectively. And then, you know, we have a project that we've called AI sharks. Uh, we went out, we hired a hundred masters 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. Um, but it's also become a great talent pipeline for us. So they're in the company. You know, we're leveraging this incredible talent pool that exists in Boston and London in our offices. And then we're working to convert some of those people into full-time associates into the business. And we expect moving forward, you know, that we'll have this as an ongoing initiative where we'll always have 100 AI sharks in the company. It just brings a whole different, you know, energy and creativity element of, you know, people that haven't been in business, they're usually AI proficient, you know, coming out of data science and computer science backgrounds. But now we're partnering them with experts in the functional areas. And when you put those two together, you know, it becomes really impactful. Because I will say there's a lot of functional experts in our business that are not AI literate, you know, that are not understanding how to leverage AI in the right way. And so if you can put them together with somebody that's able to do that, where they can verbalize what I'm 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. And we call it these kind of quick hit initiatives. And we've already completed about 65 of them across the company. and you'll see, you know, none of those are going to be the be all end all. But when you do 65 or a hundred of them, you know, you're going to start to see a lot of efficiency impact as we move into 27.

Brooke Roach, Analyst — Goldman Sachs

It's 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.

Mark Barrocas, CEO

Thank you.