Dive Brief:
- SharkNinja plans to manufacture nearly all of its household appliances outside of China by the end of the year, CEO Mark Barrocas said during the company's Q1 earnings call on May 8.
- The appliance maker has also cut costs through product modifications and negotiations with suppliers and factory partners as part of its tariff mitigation strategy, Barrocas said.
- "While navigating an evolving tariff landscape, we’ve developed and begun implementing a comprehensive mitigation strategy through manufacturing efficiencies, strategic retail partnerships, and targeted operational optimizations," Barrocas said in an earnings press release. "Furthermore, our proactive supplier diversification has positioned us with significant and improving supply chain flexibility."
Dive Insight:
SharkNinja’s ongoing manufacturing shift from China to other countries in Southeast Asia aims to mitigate the impact of U.S. tariffs on imports from the country, which have led to higher costs and supply chain uncertainties.
The company’s manufacturing pivot comes as other brand manufacturers that maintain significant China-based capacity reevaluate their supply chains, including Clorox and Colgate-Palmolive.
SharkNinja began its migration out of China in 2018 following the previous Trump administration’s imposition of tariffs on imports, Barrocas told investors. The company has shifted manufacturing operations to countries such as Cambodia, Indonesia, Malaysia, Thailand and Vietnam.
"Due to our proactive supplier expansion, we expect to have moved roughly 90% of our U.S. volume outside of China by the end of the second quarter and nearly all by the end of 2025," Barrocas told investors.
To further combat higher levies, SharkNinja has reduced costs by negotiating concessions from Tier 1 and Tier 2 suppliers, he added. The company has also lowered product expenses through adjustments to configurations, features, packaging and finishes, and has increased profitability by replacing low-margin products with higher-margin versions.
Additionally, SharkNinja has increased pricing and will continue to do so as "we strategically identify areas where we can drive increased average sell price for our products, not just in the United States, but globally," Barrocas said.
"We're already selectively increasing prices for several of our key products, and we'll continue to look for additional opportunities," he said.
Despite SharkNinja's tariff-defense moves, the Trump administration's tariffs have cost the company “hundreds of millions of dollars,” according to Barrocas.
