New Event Invite (SN)
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We are hosting a Consumer Staples Black Book on Wednesday, July 19th. JS Global (SEHK:16891) has announced plans to spin off 100% of SharkNinja, a household products company based in the U.S. & EU. JS Global shareholders will receive one share of Shark Ninja for every 25 shares held in the company as of the record date of July 4, 2023. SharkNinja is anticipated to trade under the ticker SN on the New York Stock Exchange by the end of the month. SharkNinja will continue to focus on the North American and European markets while JS Global will remain focused on the SharkNinja APAC region and Joyoung segment. The two companies will continue to cooperate on product development, R&D, engineering, and supply chain management. The company is splitting to enhance growth in both regions, not for balance sheet reasons.
SharkNinja's current CEO & President, Mark Barrocas, has been with the company since 2008 when it predominantly sold vacuum machines. Revenue has grown at a 26% CAGR between 2018 through 2022 to $3.7B. Today, the company operates in 26 markets and has expanded into 27 sub-categories. The Shark brand, which has a focus on household cleaning supplies, operates in 11 total sub-categories and had $2B in sales in 2022. Shark was the number 1 selling vacuum brand in the U.S. for the past four years. The Ninja brand, which has a focus on household kitchen appliances, operates in 16 total sub-categories and had $1.7B in sales in 2022. Ninja was the number 1 small kitchen appliance brand in the U.S. for the past three years. During our presentation, we will outline the company's addressable market and positioning, competitive environment, future opportunities, findings from our model, innovation history, and much more.
Australian Flu (PRGO)
Health officials look to Australia and other countries in the Southern Hemisphere to help predict what our flu season will be like. Australia has seen an early start to its flu season as seen in the chart below. Confirmed influenza cases in Australia are well above the five-year average (excluding the COVID-19 years of 2020 and 2021).
The influenza strains that are circulating in Australia this year are influenza A(H1N1) and B, both of which affect children more than the elderly. Children represent a significant proportion of the confirmed cases this year. About 10% fewer children have also received the flu vaccine this year. Last year’s early flu season in Australia was an accurate indicator of what our flu season would be like. We were effectively sold out of some cough/cold medicines last winter. Cough/cold is between 15-20% of Perrigo’s revenues.
Busy legislation (DEO)
The Distilled Spirits Council of the U.S. (DISCUS) recently outlined its legislative focus aimed at providing tax relief and increased market access for spirits.
- Enabling sales on Sunday: Montana recently allowed liquor sales on Sunday and legislation is currently being considered in North Carolina. DISCUS is focused on six states where sales on Sundays are prohibited.
- Spirits-based RTDs accessibility and tax relief: There are state-level advocacy groups focused on legislation in California, Ohio, North Carolina, Alabama, and Pennsylvania. DISCUS is focused on adding more states to the effort.
- Cocktails to go: Laws enabling to-go sales are now in 22 states with Connecticut, Maine, Louisiana, and Washington recently being added. Extensions have been passed in three states.
- Tax reduction: An excise tax increase was vetoed in New Mexico, a surcharge was defeated in Oregon, and in Kentucky, a barrel tax was phased out.
- The organization is also monitoring pending rules from the Alcohol and Tobacco Tax and Trade Bureau including new serving facts label regulations for spirits, the expiration in January of the trade agreement with the EU that allows for zero duties for American whiskeys, and possible expansion of bottle fill sizes for distilled spirits.
In a mature market, incremental legal and regulatory changes can add to growth. Reducing the tax rate for spirits-based RTDs from the level of spirits to the level of beer and widening distribution to doors that sell beer would have the biggest impact on the industry. However, the beer lobbyists have been effective in opposition.
