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01/11 03:36
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call highlights strong international growth, robust innovation, and strategic partnerships, which are positive indicators. Despite challenges in the U.S. Drinkware market, the company's strategic initiatives and confidence in Q4 sales growth suggest a positive outlook. The Q&A section reinforces this with optimism about international expansion and new product launches. While there are some uncertainties regarding tariffs and long-term guidance, the overall sentiment is positive, especially with the $300 million share repurchase plan. Given the market cap, a positive stock price movement (2% to 8%) is expected over the next two weeks.
Sales Growth 2% increase year-over-year, reaching $487.8 million. This was driven by double-digit growth in Coolers & Equipment and international business, despite challenges in the U.S. Drinkware market.
Drinkware Sales Declined 4% year-over-year to $263.8 million. The decline was attributed to challenges in the U.S. market, including promotional activity and cautious wholesale ordering. However, international Drinkware sales showed growth.
Coolers & Equipment Sales Increased 12% year-over-year to $215.4 million. Growth was driven by strong demand for bags, soft coolers, and recent innovations.
Direct-to-Consumer Sales Grew 3% year-over-year to $288.7 million. Amazon Marketplace performed strongly, and corporate sales exceeded expectations. However, yeti.com faced conversion challenges despite increased traffic and average order values.
Wholesale Channel Sales Increased 1% year-over-year to $199 million. U.S. wholesale saw strong Coolers & Equipment performance but a decline in Drinkware due to cautious ordering and promotional intensity. International wholesale showed good growth.
International Sales Grew 14% year-over-year to $100.4 million, representing 21% of total sales. Europe, particularly the U.K., showed strong growth, and early contributions from Japan were noted.
Adjusted Gross Profit Decreased 2% year-over-year to $272.5 million, with a margin of 55.9% compared to 58.2% last year. The decline was due to higher tariff costs and a lower mix of Drinkware sales, partially offset by product cost savings and selective price increases.
Adjusted SG&A Expenses Increased 3% year-over-year to $205.9 million, representing 42.2% of sales compared to 41.7% last year. Investments in product development and technology contributed to the increase.
Adjusted Operating Income Decreased 16% year-over-year to $66.6 million, representing 13.7% of sales. The decline was attributed to higher tariff costs and increased SG&A expenses.
Adjusted Net Income Decreased 18% year-over-year to $49.6 million, representing 10.2% of sales. The decline included a $0.14 net impact from incremental tariff costs.
Inventory Decreased 12% year-over-year to $324 million. This was due to strategic inventory management and supply chain constraints.
Share Repurchases $173 million year-to-date, with a target of $300 million by year-end. This represents approximately 14% of shares outstanding.
Product Innovation: YETI launched over 30 new products in 2025, including insulated food jars, travel bottles, updated Rambler Jug, ceramic lined Drinkware, cast iron Ranch Pan, and the Silo Jug. Upcoming releases include the YETI Shaker Bottle targeting a $2.5 billion market. The company also expanded customization capabilities for coolers and launched the GoBox 1 for the holiday season.
Coolers & Equipment: Double-digit growth in this category, driven by demand for Daytrip soft coolers, Camino totes, and hard coolers like Roadie and Tundra families. Expansion of storage and protective case platform planned for 2026.
International Expansion: Strong growth in the U.K., Europe, Australia, and Canada. Japan saw rapid scaling with 270+ doors opened, aiming for 400+ by year-end. New markets planned for 2026 include Malaysia, Singapore, and the Philippines. Partnerships with global sports teams and clubs are expanding.
New Partnerships: New wholesale partnership with Nordstrom and collaboration with Fanatics to expand sports licensing market presence.
Supply Chain Diversification: Less than 5% of total cost of goods sold will be exposed to U.S. tariffs on goods sourced from China by year-end. New innovation centers in Thailand and Vietnam to enhance product development.
AI Integration: AI is being used for product customization, customer support, marketing analytics, and operational efficiencies. Initiatives include AI-enabled product customization and a conversational shopping assistant.
Brand Campaigns: Largest-ever U.S. brand campaign launched, focusing on major sporting events and social media platforms like TikTok. Partnerships with Wieden + Kennedy and new media partners to amplify reach.
Sports Partnerships: Expanded partnerships with NBA, NFL, NHL, MLS, MLB, and League One Volleyball. Internationally, partnerships include Tottenham Hotspur, New Zealand All Blacks, and Oracle Red Bull Racing.
U.S. e-commerce performance: Softer performance in the U.S. e-commerce market, with conversion rates under pressure and a greater prevalence of deal shopping by consumers, impacting overall performance.
Wholesale inventory pressure: Ongoing wholesale inventory pressure and promotional intensity in the U.S. market, leading to cautious ordering and tighter inventory management by retail partners.
Tariff costs: Higher tariff costs, with a 320 basis point unfavorable impact on gross margins, contributing to a decline in adjusted gross profit.
Supply chain transformation: Supply chain diversification efforts causing inventory supply disruptions, with an approximately 300 basis point unfavorable impact on full-year sales.
Drinkware category challenges: Decline in U.S. Drinkware sales due to elevated promotional intensity and conservative ordering from wholesale partners, though international growth in this category continues.
Consumer caution: Persistently dynamic macroeconomic environment and heightened consumer caution, impacting conversion rates and overall sales performance.
Geopolitical risks: Exposure to geopolitical risks, though mitigated by a multi-country sourcing strategy that is not yet fully operational.
Operational costs: Increased operating expenses due to strategic investments in product development and technology, partially offset by cost optimization efforts.
Revenue Growth: YETI expects full-year 2025 sales to increase between 1% and 2% compared to fiscal 2024, with mid-single-digit growth in Coolers & Equipment and a slight decline in Drinkware. International business is projected to grow between 15% and 20%, while U.S. sales are anticipated to decline slightly.
Product Innovation: YETI plans to launch over 30 new products in 2025, including the YETI Shaker Bottle targeting a $2.5 billion market. The company is also expanding its Daytrip line and customization capabilities for coolers. A new innovation center in Vietnam will open in early 2026 to focus on bags and soft coolers.
Global Expansion: YETI is expanding its presence in Asia, with launches planned in Malaysia, Singapore, and the Philippines in 2026. The company also sees long-term growth opportunities in Korea, China, Indonesia, Taiwan, and Hong Kong. In Japan, YETI expects to have 400+ stores by year-end 2025.
Supply Chain Diversification: By year-end 2025, less than 5% of YETI's total cost of goods sold will be exposed to U.S. tariffs on goods sourced from China. The company’s multi-country sourcing strategy will be fully operational, enhancing resilience and scalability.
Capital Allocation: YETI has increased its 2025 share repurchase target to $300 million, up from $200 million, bringing the total repurchase to $500 million across 2024 and 2025. Capital expenditures for 2025 are projected to be approximately $50 million, focusing on technology, product innovation, and supply chain improvements.
Financial Projections: Gross margins for 2025 are expected to be between 56.5% and 57%, with operating income between 14% and 14.5% of adjusted sales. Adjusted earnings per diluted share are projected to be between $2.38 and $2.49. Free cash flow is expected to reach approximately $200 million in 2025.
Share Buyback Program: YETI has executed $173 million in share repurchases year-to-date and has increased its 2025 share repurchase target from $200 million to $300 million. This brings the total repurchase to $500 million across 2024 and 2025, representing approximately 14% of the company's shares outstanding.
The earnings call highlights strong international growth, robust innovation, and strategic partnerships, which are positive indicators. Despite challenges in the U.S. Drinkware market, the company's strategic initiatives and confidence in Q4 sales growth suggest a positive outlook. The Q&A section reinforces this with optimism about international expansion and new product launches. While there are some uncertainties regarding tariffs and long-term guidance, the overall sentiment is positive, especially with the $300 million share repurchase plan. Given the market cap, a positive stock price movement (2% to 8%) is expected over the next two weeks.
The earnings call summary indicates mixed signals: strong product innovation and international growth expectations are overshadowed by supply chain challenges, declining EPS, and lower gross margins. The Q&A section reveals concerns about the supply chain impact, promotional pressures, and lack of specific guidance. Despite innovation and expansion efforts, the financial outlook and management's evasive responses suggest a negative sentiment. Given the company's market cap, the stock price is likely to react negatively, with an expected decline of 2% to 8% over the next two weeks.
The earnings call highlights mixed results: a slight sales increase driven by Coolers & Equipment, but a decline in EPS and Drinkware sales. The guidance shows modest revenue and EPS growth, but the free cash flow outlook was reduced. The Q&A section reveals uncertainties in demand and tariff impacts, with management providing limited specifics. The company's market cap suggests a moderate reaction. Overall, the positive elements are balanced by negative factors, leading to a neutral stock price expectation over the next two weeks.
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