Can SharkNinja's Gross Margin Expansion Set the Tone for 2026?

SharkNinja, Inc. SN delivered a robust fourth-quarter 2025, underscored by meaningful margin expansion driven by sustained operating discipline and efficiency. Despite a challenging macroeconomic backdrop, the quarter represented the third straight period in which adjusted operating expenses declined as a percentage of net sales, highlighting the scalability of the company’s operating model.

Adjusted gross profit increased 18.4% year over year to $1,012 million compared with $854.7 million in the prior-year quarter. Adjusted gross margin expanded by nearly 40 basis points to 48.2% from 47.8% a year earlier. For the full year, adjusted gross margin improved by 30 basis points to 49.4% of net sales. Management highlighted that quarterly gross profit exceeded internal expectations.

The margin expansion was supported by ongoing cost optimization initiatives and a more favorable channel mix. In addition, overall sales mix trends were stronger than anticipated, providing incremental margin upside. While tariffs began to weigh more heavily on domestic gross margins during the quarter, these pressures were partially offset by mix benefits and the continued execution of well-established mitigation strategies. Adjusted operating expenses improved by 280 basis points year over year during the quarter.

SharkNinja’s adjusted EBITDA also delivered strong growth, rising 36% year over year, underscoring improved profitability and operating leverage. On a full-year basis, adjusted EBITDA margin expanded to 17.7%, representing a 50 basis point improvement versus the prior year and highlighting continued margin discipline.

Looking ahead to 2026, the company remains focused on expanding adjusted EBITDA margins through a diversified set of gross margin levers and continued operating expense discipline. Management expects adjusted EBITDA in the range of $1,270 million to $1,280 million, representing year-over-year growth of 11.8% to 12.7%. Although tariffs are expected to create a notable gross margin headwind in the first half of 2026, ongoing cost optimization efforts are expected to help offset these pressures. Additionally, the supply chain transformation, which enables nearly 100% of U.S. volume to be produced outside China, positions 2026 as the first full year of optimization and a catalyst for further efficiency gains.

How Spectrum Brands & Ulta Beauty Fare

Spectrum Brands Holdings, Inc. SPB reported weaker profitability in the first quarter of 2026, with gross profit declining 6.3% year over year to $241.6 million and gross margin contracting 110 basis points to 35.7%. Margin pressure stemmed from lower volumes, higher spend and tariff costs, partially offset by pricing, cost actions, operational efficiencies, and favorable FX. Spectrum Brands’ adjusted EBITDA fell 19.5% year over year, with margins down 190 basis points due to tariff-related disruptions.

Ulta Beauty, Inc. ULTA in the third quarter 2025, delivered solid top-line and margin performance during the period. Net sales increased 12.9% to $2.9 billion, reflecting strong overall demand. Gross profit rose 14.9% to $1.2 billion from $1.0 billion in the prior period, outpacing sales growth. Ulta Beauty’s gross profit margin expanded to 40.4% of net sales, up from 39.7% previously. The margin improvement was primarily driven by lower inventory shrink and higher merchandise margins, which more than offset the impact of an unfavorable channel mix.

The Zacks Rundown for SN

In the past three-month period, SN’s shares have gained 45.5% compared with the industry’s growth of 21.6%. SN presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

From a valuation standpoint, SN trades at a forward price-to-earnings ratio of 21.04X, higher than the industry’s average of 17.67X.

The Zacks Consensus Estimate for SN’s current & next fiscal year earnings suggests year-over-year growth of 14%.

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This article originally published on Zacks Investment Research (zacks.com).

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