• Revenue: Increased 9% to $464 million.

• Coolers and Equipment Sales: Increased 14% to $206 million.

• Drinkware Sales: Increased 6% to $247 million.

• International Revenue: Increased 34% to $77 million, representing 17% of total business.

• Gross Margin: Increased to 57.7% from 54.9% in the prior year.

• Operating Income: Increased 19% to $80 million, or 17.3% of sales.

• Net Income: Increased 20% to $60 million, or $0.70 per diluted share.

• Cash: Ended the quarter with $213 million.

• Inventory: Increased 17% year-over-year to $378 million.

• Total Debt: $80 million, compared to $84 million in the prior year.

• Full-Year Sales Growth Outlook: Increased to 8%-10% from 7%-9%.

• Adjusted Earnings Per Share Outlook: Expected to increase 16%-18% to between $2.61 and $2.65.

• Capital Expenditures Outlook: Between $50 million and $60 million.

• Free Cash Flow Outlook: Between $150 million and $200 million.

• Warning! GuruFocus has detected 2 Warning Sign with YETI.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• YETI Holdings Inc (NYSE:YETI) reported a 9% sales growth in the second quarter, exceeding expectations, driven by strong performance in coolers and equipment, and international markets.

• The company achieved significant gross margin expansion, with a 280 basis points increase, attributed to lower inbound freight and product costs.

• YETI Holdings Inc (NYSE:YETI) is on track to achieve record-high gross margins for the full year, with an updated target of approximately 58.5%.

• International revenues increased by 34%, now representing 17% of total business, showcasing strong growth potential in Europe and Australia.

• The company continues to innovate and expand its product portfolio, including the introduction of new coolers, Drinkware, and upcoming cookware products, enhancing its market presence.

Negative Points

• Approximately 40% of YETI Holdings Inc (NYSE:YETI)'s total cost of goods is tied to products sourced from China, posing potential risks due to geopolitical tensions.

• The company faces ongoing challenges in the macroeconomic and geopolitical environment, which could impact future performance.

• There is cautious corporate spending, which may affect the growth of the corporate sales channel.

• Inbound freight costs are experiencing peak season surcharges earlier and at higher levels than in previous years, which could impact margins.

• The wholesale environment in Canada remains challenging, despite positive sell-through performance at major accounts.

Q & A Highlights

Q: Can you provide an update on current demand trends for YETI in the US, especially as you head into the back-to-school season? What gives you confidence to sustain momentum into the holiday season and 2025? A: Matthew Reintjes, CEO, explained that YETI saw strong performance in coolers during Q2, with both soft and hard coolers fully in the market. The company introduced innovations and provided consumers with choices across form factors and price points. Positive wholesale trends and well-managed inventory levels in the US and globally contribute to their confidence. Despite a choppier market, YETI focuses on driving consideration and purchase over traffic, leveraging innovation and brand strength.