YETI - Earnings call transcript Q4 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and welcome to the YETI

Holdings Fourth Quarter 2024 Earnings Conference Call.

[Operator Instructions] This call is being recorded on

Thursday, February 13, 2025.

I would now like to turn the conference over to Maria

YETI. for Relations Investor Lycouris,

Maria Lycouris

Good morning, YETI us discuss for thank you joining to and

Holdings' Leading XXXX fiscal fourth and quarter results.

the call today CEO; will be Matthew Reintjes, President and

Mike McMullen, and CFO.

remarks prepared our Following

we'll open your the for call questions.

of like you begin, to we we'd that Before some the remind

statements that call considered on may be make we today this

and statements are forward-looking such forward-looking,

various to uncertainties cause that subject could and risks

differ from actual our materially results to these

statements.

information, please to risk the refer more For

factors We detailed in our most recently filed Form XX-K.

or obligation any to revise update no undertake

of the statements new a made forward-looking today result as

information, future events as otherwise, required or except

by law.

measures financial discussed our stated, otherwise Unless on

a on be this basis. We will call non-GAAP non-GAAP use

measures believe more represent accurately as they we the

our true operational results underlying performance and of

business. Reconciliations of these non-GAAP measures to

directly measures comparable their in most GAAP included are

the press or the morning presentation posted release in this

to website at the our of Relations Investor segment

yeti.com.

I'd now to over turn Matt. call like to the

Matthew Reintjes

good Thanks, morning. XXXX Maria, and an was

excellent with year bottom for YETI strong top and

our strength, by brand expanding line growth, fueled

global portfolio growing product and presence.

clearly XX past months, has team our executed the Over

YETI priorities. our strategic against with Starting Brand.

consumer strong and to studies owner show passion continue

expansion support and brand the our for In product strategy.

XXXX, we XXX over events the consumer around participated in

with ended roughly XXX year ambassadors global world, the

meaningful and secured addressable partnerships, growing our

consumer key market across groups.

impactful we innovation, in delivered In additions

drinkware, bags, plus color our food, coolers and expanded

options. and grew our DTC Within we our omnichannel,

geographies and continuing across meaningful find to wholesale

ways And where with consumers they shop. to intersect

brand global YETI's is internationally, finally, residence

tremendous in international markets. unlocking white space

Additionally, delivered excellent margin adjusted YETI gross

and expansion year throughout adjusted the margin operating

a competitive despite and environment. domestic macro choppy

year with position We ended $XXX cash the approximately of a

our sheet. on strong million, building balance

Our momentum

continued signs as in we fourth even of the quarter, saw

discerning consumer buying more promotional activity and

in particularly the competition, U.S. market. heightened

diversification drive and to continued Innovation product

across demand strength YETI in the particular quarter with

in Coolers the hard category, Equipment in specifically &

internationally. growth strong with and We bags and coolers

$XXX over free for the in million delivered cash second flow

strong expect in we year another year in and row, a XXXX.

robust cash us This to gives flexibility generation a pursue

is strategy, allocation which capital centered targeted a

around driving delivering and growth long-term sustainable

levers: in X key through shareholders Investment to value

building upon our the business, and accelerating innovation

we year, In cadence share XXXX. repurchase started the in

meaningfully delivered on these allocation capital

share buybacks in million and $XXX announced with priorities

the and roughly representing of X% shares outstanding

These Pat. acquisition of and Mystery Ranch deals Butter

YETI Cookware and accelerated cast launch of enable the iron

the XXXX. Bozeman of This release is in limited the backpack

our mean capital we allocation talk about we what when

driving strategy innovation.

Notably, acquired fourth we also quarter, in the

with us capabilities, provides a IP that technology and

and engineer develop cooler powered a to unique foundation

this We highly complementary is system. believe technology

portfolio another and existing example to is Cooler our Hard

opportunity of product the we significant see future for

innovation.

supply on we made great year, also progress the our Over

our of of achieved diversification. We target chain XX% our

global capacity shifted Drinkware by China the outside of

XXXX. And we firmly importantly, ahead are of of plan end

to have expect and now that U.S. by of XX% of XXXX end the

outside capacity China. Drinkware located of

team's Our

across strong sourcing, operational execution process and

cost as automation as well improvements service and

optimization gives us ability our in tremendous confidence

our global effectively demand. growing cost to support

Looking I'm beyond, than and to more ever ahead XXXX excited

and about the our to our drive business opportunities

growing global brand.

plan, execute we our to we expect As

line anticipated continue top to performance deliver despite

will and market in dynamics headwinds FX that Mike discuss

detail more shortly.

expanding also strong While margins adjusted operating and

growth, earnings while maintaining all a healthy very

sheet. balance

While pressures we in expect macro persist to

XXXX, our strategic remain long-standing priorities growth

we will believe which our same, to the ability support

sustainable growth. long-term deliver

Turning to enthusiast brand. are at Numerous the communities

core of what do, we and their supporting activities

connectivity deep pursuits. and fostered The have trust we

and of the in owners evident testimonies strong is a YETI

over engagement we've seen the last year.

most Our recent

underscores U.S. completed the owner December in study

consecutive brand. our seventh was of XXXX year the strength

responded of XX% YETI owners that have they surveyed

highlighting recommended our YETI to peers, incredible brand

loyalty and our products. a to testament

consumers the Moreover, to study that shows be us our want

the particular, newer we're categories bags in scaling, in

design This, travel. our of and along attributes with key

performance in and design durability, confidence gives us

differentiation and in market. the positioning unique our

To that continue fourth to expand quarter, end, we the in

awareness strategic and presence events through our

throughout ambassador broadening partnerships engagement and

communities. notable target our We the progress in made

world and and diverse hospitality global large, sports of

we where to traction continue significant drive for our

brand.

we a with partnerships number of In hospitality, secured

premium, excursion experiential and focused lodges travel

across In and resorts YETI also and U.S. Europe, the Globe.

key an film in presence X at had unmistakable our festivals

European largest the quarter. notably during Most markets

in Outdoor Festival European XXXX the off Film kicked

XXX,XXX XX spectators October, attracting over across

each stop, products branded different countries. At YETI's

were featured. prominently

sports collegiate Sports and front, our professional

quarter, fourth benefiting the in accelerated partnerships

from playoffs, such NFL events One's the as Formula

Championship playoff Finale the Football College and

partners featuring in Nostradame X Ohio State. our of In and

the quarter, custom and at were bottles YETI gifted cups

Gold Baseball's Rawlings Major awards as XXXX League Glove

XXXX Trophy Heisman the as ceremony. well

just that recent are the anecdotes highlight These few a

our of brand relevance and and resonance across occasions

pursuits and on stands the field, in YETI's home. at the

Bull Oracle Red with partnership racing the team expanding

of quality we partners is great another testament to the

brand. have trust in and the our

Our and successful

Cooler which partnership not and Drinkware long-standing

crude hydration pit driver but also supports only

Austin Prix at was on performance full display Grand the in

Las in Vegas GP where October November, in Maxesoppin the

Driver's straight Formula One World fourth its secured

Championship.

at supporting YETI team and MAX products a is the Image

organic Austin earned our GP Race weekend highest

impressions in The fourth the collaboration strong quarter.

as with culminated and named YETI also team's the being

into head and luggage bags the official we partner as XXXX

the sports most traveled of season, outfitting one

the on planet. organizations

incredible beyond, and XXXX to forward look we we As see

to to partners and grow new with runway and existing

to our reach and extend new communities to markets, continue

consumers.

landmark year to turning innovation. product a was XXXX Now

for new and innovation, with XX launches record new product

of adoption and demand strong driving reductions, and color

Drinkware geographies. on and innovation led the categories

from into to broadening portfolio hydration front, new the

areas as and cookware. barware, such the Overall, tableware

category breadth Drinkware of offerings depth our and

clearly differentiates with products for developed YETI

consumers' consistency and across daily use of frequency

ownership while consideration broadening lives, and

balancing portfolio. and diversifying our

we products demand consumer saw The for these across our

channels gives our confidence us that diversification

strategy a resonating, crowded and despite is more

very on market of set a hydration narrow focused promotional

solutions.

On the cooler Equipment side, saw hard & Cooler

excellent new innovation both legacy growth across and

the with sustained in year throughout products performance

cooler our Rod Strong and holiday Tundra hard families.

demand price supports the premium and product point

we discussed strategy in quarters. innovation previous

In tile backpacks our soft and coolers, lunch thermal bags

continued positive momentum their the year-end. into

Turning

Bags. to

Our great with portfolio had a fantastic quarter

performance in packs, totes Crossroads Camino YETI our and

backs. Dry Panga and Sidekick

also We launched our limited

Pack starting nodding coming, to what's run in the Bozeman

first Everyday XXXX and half of a new range in of

all-weather bags. This YETI product run by limited inspired

excitement and significant and Mystery Ranch designs drew

sold out quickly.

front We massive of have a in us with a big opportunity

packs addressable across global market bags, and premium

exciting highlight and launches that unique luggage our

and designs capabilities, strong all our leveraging

major strides in engine brand. making commercial After and

our X over product new years, last innovation focus on the

center the of packs, around lunch new will XXXX first half

to and boxes, bags style insulated updates food transport

roadie our an extension in and cooler exciting flagship 'XX

the premium chairs in our a come to with few, more to name

of XXXX. half second

Hiding broadening and awareness and ownership consideration

suite key while is our priority, of products also of a

continuing to address for areas with expansion our new

road we map. innovation a Coolers, see In growth path strong

in more soft both hard solutions and we cooler address as

day-to-day consumers' lives our smaller from across areas

format thermal bags to powered cooler systems. This

of is the powered acquisition around IP one coolers example

MYSTERY leveraging how balance like much of our we're sheet

to Pak strategic and the globally Butter and RANCH support

our further relevant expanding business, evolution of our

capabilities opportunity. market technology, and

As our further extend into and innovation ramps pipeline we

emerging categories, and we're consumers more legacy giving

reasons compromising to YETI without choose the on

durability, performance known we're for. and design

omnichannel Turning strategy. to now our

of our As portfolio

continue from diverse our we to grows, products benefit

wholesale across DTC. footprint and

shift flexibility Our to

dynamically between channels allows us to maximize buying

position opportunities where products our and strategically

consumers our shop. to want

wholesale. with Starting

channel wholesale was strong Our

with the year well innovation new with throughout resonating

our partners us to and a their maintain allowing shoppers,

solid channel In quarter, the our inventory position. fourth

from benefited hard coolers highlight, were a and shelf we

at retailers. space expansion key

Additionally, holiday

points merchandising in around price our giftable Drinkware

our Camel and tableware relaunch and barware particularly

saw strong demand.

of year actively XXXX Notably, the wholesale was first

which in Garage participated drove YETI's Event, Gear

sell-through We in the remain and excellent demand channel.

the with pleased wholesale relationships and our very

interest innovation. in our

also We to continue evaluate

opportunities address expansion that during new consumers

occasions importantly purchasing but differentiated

our complement go-to-market. overall

continuation softer On the we of while saw a DTC side,

we our overall impact traffic able maximize were trends, to

nimble staying strategically marketing by allocating and

channels various our to dollars major shopping through

Garage Year key during a for moment was periods. the us

quarter, with huge demand, sparking our Camo drops prompting

led high to consumer purchase and which engagement intent,

the of larger baskets and continuation increased consumer a

in saw third value we the quarter.

we competition promotional increased and While observed

practice market, past the continued YETI of in intensity

periods. promotions targeted noise high these in using

YETI launch the following program of Additionally, ID our

increase a account significant last we in quarter, observed

and deeper our enabling customers engagement creation, with

experience and unique personalized more a the brand. with

Amazon team continues our to as perform very well drives

the strong operational efficiencies across marketplace

consumers effectively reaching In shop who channel. that

growth all across robust saw we regions sales, corporate

and with inbound great domestically strong performance sales

traction our markets through ongoing in international

execution.

our retail the hit stores plan of the On end we front, XX by

the adding XXXX, over the the of year. X fleet to of course

stores our play to an continue perspective, strategic a From

full in portfolio important consumers to role exposing our

of products brand. and of our raising overall awareness

performance omnichannel in Importantly, lifting markets our

located. where they're

we next presence our to Over plan year, growing continue the

similar on XXXX The a to cadence international XXXX. front,

was XX%, total our year, reaching growing a XX% terrific of

business mix.

traction We to across continue see great

and go-to-market resonating with our our product markets

saw momentum. significant gaining we In strategy Europe,

in the growth full for and the remarkable quarter fourth

led by the strong Germany and year, and in U.K. performance

across demand broad and channels partners.

While early with our in expansion still we relatively are

ahead, significant grow our we continue ground to our

presence at across ending retailers, and local events key

the X,XXX with region. over year doors the in

Over the next

year, continue to expansion on we focus will our omnichannel

by increasing our wholesale footprint ramping up

Australia and our its customization growing brand. continued

strong year-end, capping the into momentum off an

year. exceptional

partners the In wholesale national quarter, fourth our

delivered strong performance our DTC channel from benefited

robust particularly Drinkware in Drinkware. custom demand,

taken root a this YETI The strong brand market, and has in

continue we we're see energized opportunities about the to

broaden our to base grow consumer omnichannel our and

presence.

saw and full for quarter In growth Canada, we steady the

In year. wholesale, saw we at our key sell-through healthy

consumer challenging and more a despite backdrop retailers

Drinkware in performance strong custom business DTC, in our

drove corporate our and sales the performance in quarter.

to want we double continue ahead, year the to Looking to

customization efforts corporate on and sales our down

and our in presence growing offerings our brand expanding

market. the

next the will forward drive Over continue we year, to our

key and international initiatives, growing brand awareness

will successful our XXXX, building In we omnichannel. also

held expand our the Asian presence In January, market. in we

Tokyo event with introduction team our market first our in

brand all in partners attendance. ambassadors and

We have

already the lay the begun groundwork next for step. to And

in proven the coming executing begin months, our we will

by go-to-market launching our market playbook expansion

footprint building up a and wholesale localized ramping

establish activities building the brand as YETI we brand and

future scale and for prepare growth.

the turn I call Mike, my Before I to over want reiterate to

path excitement and optimism ahead the for YETI. about

Our

diverse product brand, growing and compelling portfolio and

opportunity, well to position us market execute our global

growth we forward To end, potential. that long-term look to

our providing more of priorities detail about each strategic

translate and into growth future and long-term how they will

this Day year. at an Investor shareholder later value

possible discussed Finally, what would be today None I of

partners our outstanding with all and without our of team

efforts to brand drive commitment and tireless YETI our the

growth, continued for us margin position and forward vision

and expansion balance our profitability alongside healthy

sheet and strong cash generation.

over call now the I'll Mike. turn to that, With

Michael McMullen

morning, I'll start good Matt, Thanks, and everyone.

few by our items impacted fourth highlighting a that

quarter GAAP results in year prior the current and

of fourth a provide review periods. our Then I'll

performance. and XXXX full I'll then quarter year

outlook year XXXX full discuss opening before it our

questions. up to your

an reported First, today our include GAAP results

of unfavorable This recall reserve adjustment $X.X million.

was the related in is to product first announced recall that

early fiscal XXXX.

As recall reviewed claims of we trend the

out in costs the and we and projected that XXXX reserve

need this we made the going would forward determination that

necessary. adjustment, sales was In this adjustment reserve

higher to impacted by million $X.X unfavorably due were

participation rates. recall Cost estimated consumer of goods

benefited by to recall-related due $X.X costs million lower

and unfavorably primarily was SG&A impacted $X.X million, by

volume. claim recall due to higher

in period, As a the we made reminder, favorable a prior year

recall the trend reserve adjustment recall on based of

claims at time. that

For our standard reporting practices

of nonoperational other and nonrecurring the impact these or

non-GAAP results. items excluded results are from All

will adjusted non-GAAP today's be metrics on discussed call

better the performance of on to order operating focus in the

quarter business fourth and year during XXXX. the fiscal

YETI XXXX. strong just incredibly completed year an We in

growth grew our to all X% across with $X.XX sales of billion

operating grew channels, categories and geographies. We

future income XX% investing $XXX still million, to in while

growth grew our opportunities and We infrastructure.

per share by to earnings $X.XX, which reflects the XX%

of million repurchases accelerated impact in $XXX share

executed during the year.

million generated and free flow We of $XXX maintained cash

balance sheet, executing on while incredibly also strong our

to which X acquisitions, in of growth XXXX. some contributed

all while to did we the that And expand of continuing

the grow and portfolio the both U.S. brand in and product

world. the around

increased results. fourth quarter our to now Sales Turning

X% our which was expectations. above to $XXX million, We

pleased with very teams during execution the our the were of

quarter. Three strong performance include growth highlights

XX% our Equipment, & grew which Coolers in XX%. growth in

continued our strong channel momentum in DXC and

XX% QX. International business, in which grew

I'll discuss review our I detail in these as more each of

and performance each of categories, in our channels

geographies.

In quarter First, fourth category. the by

$XXX Coolers sales to increased & XX% million. Equipment

was expectations, driven our above excellent This by

performance in hard coolers and in bags. Notably, was this

our double-digit growth fourth in consecutive quarter of

C&E.

our as anticipated, coolers, XX hard performed ROTE In

extremely well during in launch holidays following the its

soft QX. late In coolers, our coolers backpack and

also to thermal perform lunch continued smaller-sized bags

well.

In Equipment, bags had We outstanding saw quarter. an strong

Camino, and Crossroads, our for demand Panga Sidekick

branded and Mystery our performed families products in Ranch

expectations. our with line

incredibly are we said, Matt As

new excited about our upcoming launch lineup of of the YETI

Mystery first the inspired Ranch half packs branded of in

XXXX.

product accessories Within and cargo, family our goBox also

growth, there our to is believe and contributed we

opportunity to scale through category both this tremendous

consumer awareness in overall higher and innovation product

XXXX and beyond.

& For the Coolers sales full year, in

to Equipment increased XX% $XXX million.

X% grew sales $XXX Drinkware, For million. QX to

Matt As

overall U.S. higher market experienced Drinkware said, the

the and levels competition of during promotions elevated

quarter.

was U.S. the in business Drinkwear overall Our down

in good slightly year-over-year but we saw QX, performance

highly areas including of portfolio, our several our within

bottle giftable lineup. barware, our our stackable cups, and

believe efforts speaks of importance over to this We the our

diversify the our last few Drinkware and years to broaden

the over XX individual to portfolio Outside products. U.S.

Drinkware over our significant room XX% business grew with

for growth existing and new both further markets. in

For the

Drinkware year, full

sales $X.X grew X% approximately to

in region with billion, every the globe around growth

including the U.S.

performance Turning to our channel. by Direct-to-consumer

million, in quarter the XX% $XXX fourth were sales growing

sales. across growth We total of XX% saw of representing all

in channels sales DSC our strength with corporate notable

business. Amazon our and

One of the key success stories with

quarter Drinkware was the our during NBC customization

both which for offers, are now globally e-commerce live and

customers. sales corporate

to X% year, For sales the DSD billion $X.X full increased

in our of line sales XX% mix, with overall representing full

XXXX. DXC approximate The year remained mix within

from with XX% relatively consistent our year-over-year

from websites XX% YETI the global and stores, Amazon YETI

and corporate wholesale XX% from sales. In marketplace,

to million X% $XXX to prior compared increased the sales

year quarter.

rates In grew at the U.S. similar sell-through and sell-in

with Equipment and QX, Drinkware in both in & Coolers in

growth sell-through strong C&E. particularly within

the For

$XXX full wholesale sales year, to increased XX% channel

positive and growth sell-through by sell-in driven million,

in in operate, the every U.S. market which including we

Shifting to business. another our International We saw

excellent of with quarter internationally growth our

increasing U.S. in $XXX XX% the million to outside business

QX.

with All regions of Australia grew our and Europe

growth. double-digit exceptional their continuing

Our

efforts to grow brand distribution our drive awareness,

And model and out network working. roll omnichannel are our

significant see to we ahead we runway as continue us of

for opportunity global YETI. the on capitalize

sales year, $XXX International XX% For full the grew to

up of XX% representing million, XX% from total sales, of

year. last sales

wrapping on up note the that sales, Before

gift included card quarter fourth million of $X.X

to redemptions related remedies to offered customers

by in the to $X.X recall, million compared product impacted

period last during card gift same redemptions the year.

increased gross margins, $XXX On million or profit X% to

which flat the prior of is sales versus year period. XX.X%

margin freight gross inbound included of Drivers costs lower

offset higher lower and product costs costs customization by

other cost smaller within our and goods items of a number of

sold. Full to $X.X XX% increased year billion profit gross

sales. to expanding XX.X% XXX points of basis

The led full gross expansion profit was by lower year

lower and product inbound costs. freight costs

Before moving

on to expenses we like would our SG&A the quarter, to for

be of note shifting SG&A will our breakout that expenses

following expenses from variable and to non-variable the

costs, marketing and employee compensation groupings:

and benefits fulfillment costs, distribution costs

expenses; amortization and general depreciation and finally,

costs. and administrative

to expenses the fourth increased In $XXX SG&A quarter, X%

of flat sales, compared to the XX.X% or which million is

and fulfillment distribution period. expense year prior

leverage on sales offset higher was higher employee by

and higher general costs benefits and and compensation

year Full SG&A costs. administrative XX% expenses increased

million, to $XXX of XX points XX.X% increasing basis to

sales.

$XXX of income million increased X% or XX.X% to Operating

increase XX sales, quarter the point over fourth basis a

year. last

For income the XX% grew full to year, operating

point increase $XXX million, XXX a to year-over-year basis

$XX $X million X% Net income or XX.X% to sales. increased of

per growth the of diluted versus XX% share, representing

$X.XX per the period. share diluted prior in year

basis, income to full $XXX million On a grew XX% or year net

XX% growth diluted per $X.XX versus representing of share,

the during last same $X.XX period share the per diluted

year.

sheet. We Now turning with balance our $XXX ended to XXXX

as million compared at end cash, in to of the million $XXX

XXXX. flow free during $XXX of cash the We million generated

helped enable the which year, deployment strategic of

mentioned million earlier, I that in including $XXX capital

RANCH the repurchases share of and acquisitions MYSTERY

a and cooler Pat the powered future for Butter IP platform.

$XXX Inventory Total decreased X% to million. year-over-year

unamortized leases deferred and finance excluding debt,

$XX was fees compared million $XX million financing to at

the end quarter fourth year. last the of

to turning for XXXX. fiscal Now our outlook

We full expect

X% and X% year sales approximately to increase between

XXXX sales. fiscal net to adjusted compared

With the growth

the of our and International business, recent strengthening

the approximately of dollar, an basis we XXX expect U.S.

point FX in headwind from XXXX.

total perspective, a From phasing we expect be growth to

stronger year second half the the of versus in the first

the by of Drinkware. half driven specifically Drivers year,

include our the of Drinkware pacing this dynamic of

into which is second much weighted innovation, the heavier

half stronger in of the year and Drinkware compare a growth

the first the of year versus half half the of second the

year.

in expect low we to Specifically, mid-single-digit growth

to first single high with growth low the half, the in

half. double-digit range in second channel the From a

perspective, we expect businesses to DXC and wholesale our

in line in relatively XXXX. other each with grow By

we continue expect growth Coolers Equipment category, & to

Drinkware in to outpace growth XXXX.

have great We momentum

our in several planned categories within C&E and given

that another set we believe strong we innovation, for up are

year.

expect mid-single-digit in range We to Drinkware grow the in

includes That is that growth half approximately XXXX. first

that flat and half will growth approach digits second double

first quarter, engine innovation our as resumes. the in By

expect down slightly we Drinkware year-over-year half, to be

growth but in in returned to QX. QX

I that the Drinkware growth dynamics call also to out want

the first within in of year primarily the are half U.S. the

market.

to the We Drinkware expect U.S. our outside business

at a consistently double-digit quarter during grow each rate

XXXX.

we perspective, total geographic a domestic From expect

growth in total range International the mid-single-digit and

in approximately with growth mid-teens, basis XXX the even

FX. points headwinds of from growth

We International expect

during be relatively to the growth year, while consistent

the in growth the half versus U.S. stronger see will second

half. first the

Matt mentioned, are very also excited we As

our during commercial of business launch Japanese the about

YETI with XXXX. We XXXX foundational year for see Japan as a

first year XXXX the of full serving as operations.

We gross remain to for the relatively flat expect margins

with product costs year continued benefits offset by from

FX and headwinds. phasing mix perspective, a sales we From

impact the mix the from the be largest sales in expect to

roughly a and quarter expect we first therefore, XX basis

margins year-over-year in gross The in QX. decline point

the year, year-over-year small expect we of rest increases

margin as sales gross quarter in normalizes. each mix

for have One our included the dynamic that we in not outlook

is tariffs. year

As fluid you all know, it a remains

which we closely. are situation, monitoring

we said, As Matt

plan our in our are efforts shift strategically ahead to of

outside This progress China. made chain been supply has of

our possible extraordinary of our work through and team the

existing our strong, long-standing with relationships

suppliers.

through progress we year, we will the continue As

mitigating actions us, all at look available to including to

price.

expect to slightly be SG&A, For growth year-over-year we

in growth sales our below XXXX.

We will invest continue to

key our global chain behind expansion, initiatives, supply

diversification, innovation and continued DXC growth

acceleration. timing of some these The discrete of

investments will SG&A drive roughly XXX basis points of

expect we through go but deleverage we QX, as in improvement

the we XX to end year roughly the expect year with basis and

points in SG&A. leverage of

income expect we operating result, increase a to As adjusted

XXXX. and X.X% in approximately between X.X%

We expect a

year-over-year decline but for operating QX, in in income

we quarters, X remaining the to grow operating income expect

to estimate line above in FX sales. We that slightly will

on impact point have a XXX roughly basis our operating

growth XXXX. income in

operating tax line, expect of the rate we Below an effective

approximately in XX.X% with fiscal the for XXXX, line prior

diluted year. on outstanding Based year full shares of

million, we $XX.X adjusted approximately expect per earnings

$X.XX to X% share between diluted and increase to X% between

in XXXX. $X.XX to estimate and compared $X.XX, We fiscal

$X.XX approximately of will share a be FX that per headwind

in XXXX.

As it relates to Board our repurchase program, our share

our repurchase recently share increased authorization by

the our million total $XXX bringing under available

as million today. $XXX of to authorization

our outlook While

from future include any not share repurchases impact does

to XXXX, leverage repurchases do share as during we expect

allocation capital of part year. our strategy this

expect We

capital of million between $XX and expenditures $XX million

investments continued technology, new reflects which in

chain. product innovation supply and our

free expect cash We

in flow approximately million $XXX of XXXX, representing

flow another strong business. free year the cash for

summation, results we In are proud of very delivered we the

in context of challenging XXXX, and even in a the macro

consumer backdrop.

While and we FX anticipate headwinds from

market, the U.S. inconsistency in believe we continued we

are outlook. well our positioned against deliver to

will We

continue priorities, we to which execute on our strategic

believe will our ability to support long-term deliver

XXXX YETI, sustainable and growth. an is year for exciting

to continue eager brands, are we delivering growing our

growth driving global omnichannel basis. and a on innovation

like would to over I turn operator Now to call back the the

to take questions. your

Operator

[Operator Instructions] Your Peter question comes from first

with Baird. Benedick

Peter Benedict

maybe Mike, on tariffs.

So was you if wondering

looks could frame it like maybe for XX% us, the

that's certain most China tariff, maybe the one

know ahead of plan being I you talked here. about in

out terms China. of of Maybe diversifying would what

kind of of outlook tariff the to level due that

could curious And offsets? no assuming if you maybe

frame your some other on exposure to markets

have in that the been Mexico like places imports,

late. of question. first That's news my

Michael McMullen

Peter, thanks for the question.

if yes, So took you the

effect that went X February announcement tariff into on on

goods is which on essentially X, tariff the XX% February

China. of We that think that, less would have out coming

million the terms year impact in additional than a of on $XX

cost. a few outlook in We reasons. -- that for our is not

a it's dynamic situation. fluid obviously And very One,

a two, as mean, that's a that manageable number view -- I we

number to we're to that work, we and are continue going

going via that to additional do cost optimization.

also, we're we we are to said And going as consistently,

at But kind of to idea of price. continue gives that an look

referenced stay place to in were if tariff that the that you

the looking could we for at. what In That's full be year.

Mexico I of the guess, call I'd regions, is one terms other

our it piece but a is of out, far lower than business what

about And with same running talked we're we the China.

we're there. in We're playbook running that Mexico running

our continue to work partners with find well, ways to as to

potential offset obviously, any has But cost. been nothing

officially announced there.

Peter Benedict

Got it.

My follow-up helpful. really That's Okay.

that around would be kind of you did the acquisition

that fourth it expect the -- quarter. in you Do to

to doesn't sound contribute like sales going to it's

don't it maybe but year, a bit. little I this is

is or if you that frame more maybe this could know

development of situation? type a

And how speak how do maybe -- just you're to Matt, you

thinking about maintaining within discipline M&A.

You

of get a I'm cash have lot you flow. obviously sure guys

sun, under that's the anything shown even remotely

tangential your your maybe just business, to about talk

you M&A, approach to how and about how you're thinking it

that front? disciplined remain on

Matthew Reintjes

question. Peter, thanks start with the I'll the for

powered we cooler technology IP and acquired that in

the excited fourth incredibly quarter. We're about

our within architecture fits overall of that how

underneath and YETI hard how coolers the that fits

it. for opportunity global the and brand

So we're very excited that. about

we you don't As said,

in-development to contribute an XXXX, to expect it it is

platform some of we had off a that spent program time

to at and opportunity had looking an that to in bring

we we believe deliver accelerate what -- will think what

will deliver that a unique fits powered cooler solution

our rest and roadies the of our alongside and funders

portfolio.

So more working to we're come on but that,

actively on now. and aggressively that right program

to I it as think relates think broader I I M&A, would what

is we in how good really X to point of XXXX, illustrations

M&A. think things look bring for about that ingredients We

or technologies to stuff know-how bring bring accelerate or

road already very product it is that map. our likely on And

fitting gives us a chance programs to accelerate those

underneath the YETI brand.

we're disciplined about So highly

think we as how M&A of it's said, -- there's a about you lot

there. out things

have We lot of a conversations. And when

all of the different areas we getting enjoy see kind to

we'd go, we as believe where spend much could YETI probably

does we how time go on then should there? And that

the acquisition technologies or how does the acquisition of

materials, capabilities, for our vision know-how accelerate

map. the the expansion of product road YETI

Operator

from comes with question Brooke Next Roach Goldman

Sachs.

Brooke Roach

you was elaborate your I hoping on could comments

the in regarding U.S. growth XXXX and dynamics that

you're seeing, specifically in the U.S. Drinkware

you are versus wholesale in business. What seeing

DTC growth And for U.S. enter Drinkware as you XXXX?

that in confidence half you gives what second

stabilize to inflection return the in a to growth

U.S?

Michael McMullen

Brooke, the part question your first of I was,

muted. think,

So if address everything don't we you

let please me know. asked,

terms in U.S. of So

we Drinkware we -- XXXX, in like called out, said so

will in the -- in U.S. be we general, think the

mid-single-digit growth range. We think Drinkware

range in as well. We want globally that did will be

time to on provide really the color first some for

U.S. kind of that Drinkware at what level. see we

And essentially we be the in or think it will -- flat

will the in QX. total down Drinkware be flat half, first in

the half, there's to look think we as But second a couple I

phasing we to or the One, the do things call have of out.

second more much weighted is innovation half our of pacing

this of is drivers the year. all And I think that one of the

work and around we're our diversification chain supply doing

on that I does have an it is of impact sort mean that. of

pacing road map our -- did product impact in the that our

this year, number one.

why at of terms look when confident In the we're because we

have out we in the half, what coming second I -- planned

it's mean, robust will allow us we feel lineup like a that

to to growth that get back rate.

The thing say other I'd is

perspective, strong from a first Drinkware compared had a

year. I in last quarter XX% the of first mean grew half it

XXXX. of

as compare so from a standpoint at we And look it

rate growth in in of pretty a big difference there's terms

half half first the versus Drinkware. for the second

so And

I think that's as a role well. playing

Matthew Reintjes

The thing Matt. one is this Brooke, Yes, would I

January, add, our visiting was early I in in

factories, factories that we're the Drinkware

I transitioning out of say that China. And would

piece focus YETI at in half of a first of the big

successful the diversification of year is our the

have to us allows we which think what chain, supply

innovation exciting map road in really a is the

second Drinkware. half within

you when quarter-to-quarter, think there's I so think And

about Overall, we the feel some great movement there.

continued Drinkware, adoption expansion potential in of the

and then Drinkware our in both new the in U.S. innovation

outcome of continued expect outside the we obviously, growth

U.S. it. in of front with runway incredible

Brooke Roach

I And discuss could up. follow you Can if the just

versus for dynamics outlook the DTC wholesale in

going market U.S. seems forward? It like got you've

with great legacy, ongoing some consumers momentum

of the brand, some levers and good innovation

out in coming, versus how that play does DTC

wholesale in your market? core

Matthew Reintjes

Yes.

in think U.S., as interesting I the been it's

period went the XXXX we hard into the and to shift

what and we've our is ability about DTC been excited

acquired that we customers to retain the through

what's business DXC strong a build and period that

been as exciting is come watching back wholesale

time. that over

so got I really omnichannel. we And balanced we've think a

we the the and have underneath diversification think DTC

diversity have, we I a gives us of partners think wholesale

lot can to of areas and find opportunity to we where win

continue to grow.

any think we updated sort I haven't And so

on wholesale, I view long-term versus of think DTC but

they're a We way complementary working in right now. really

have partners. incredible wholesale

DTC have We strong

channels.

that's -- focus really so do how is we our And

when drive getting where and YETI in front of they consumers

And we following shop. has to want we're a think been what

on they changing dynamic shop. to choose where consumer

Operator

Lap Morgan question comes next Your from with Stanley. Megan

Megan Christine Alexander

one first Just thing. wanted to clarify

think you I

the release week XXrd a mentioned in press don't XXXX. in I

think that's in most something consensus we're modeling.

just I to that week in clarify the wanted included is XXrd

your top line? play And half that how into the first does

growth? line dynamics my half I'm If or second top doing

of kind think points I correctly, be to could the it math X

back half.

So that of is part acceleration expected the in

the well? as half back

Matt Koranda

Megan, thanks the question. for

the think I So XXrd

minor a for impact. is It less relatively is week us

total than year. the last The X point on growth of

this we in saw -- out we we XXXX, time called call

X and when was that growth, less that point than of

were It's are our much now. smaller we than we

year. lowest week of sales of the

So impact minimal

if perspective. top a from anything, line And from

income, operating an slightly it's slightly it's --

year. the on dilutive

So no we impact real that

XXrd from that week. out call would

Megan Christine Alexander

maybe Okay. as That's super Great. a helpful. follow-up And

wanted on bit to Drinkware, more I little just a ask about

intensity the promotional competitive the environment and

Is fourth you're anything seeing. in did -- you the see

quarter describe anything year-to-date you or as that would

potentially irrational competition? And think you from I

remarks your mentioned prepared the that continued you in

But strategy more of you promotions. if targeted maintaining

seeing how you more bit are a promotional do intensity,

adjusting your about your or think promotional strategy

that pricing to strategy category, make you're sure in

share? maintaining

Matthew Reintjes

I while or rationality to speak won't Megan, the

behaviors the in the of market. others irrational

What and I is would say we to continue we believe

Drinkware show diversification our of that our

with and resonance approach is working it's showing

use consumers that promotions continue we as to can

and of in tool as for a products transitioning out

innovation, the to we we continue drive more up as

our innovation. of cadence

think it's backdrop I about more market the think I -- don't

and consumer mindset kind of than that the something we're

react to. I also mentioned think, strongly going in I to as

my broaden to and idea remarks, the continue that we

reasons diversify is people the use to the and cases buy for

against the Drinkware where is bit of in going a the focus

which right a to tends pretty category around now, be

products. set of of set consolidated

And so think I I feel

I strategy. short-term feel our about good about good really

growth drive continue and YETI strategy and midterm our to

the Drinkware, and and relevance in both YETI U.S.

obviously, world. around the

Operator

question from Jefferies. Konik Randy next with comes Your

Randal Konik

a couple things. of guess I

the on Just map. When

ramping, about innovation maybe talked you you and

on how you think perspective some us can give about

next XX months like XX what that over to makes the

or that's and perhaps from the different how same

of or perspective amount that units footing the

of Just last seen in the couple of we've kind years?

for that us. contextualize

maybe the the give also side Bag ledger, just of And just on

perspective some category how that us kind now is on big of

and of what kind about think you in opportunity the

to as innovation there, long-term relates question. it the

Matthew Reintjes

Yes. Thanks, Randy.

is I think would say what I you

in up innovation that saw XXXX, was and in an tempo

really of little the a result catch-up bit from of

the getting back XXXX with period and XXXX, online

our by partners an product incredible our work

team. development

I largely going consistent think going be is to that pacing

to opportunities see We forward. to vitality bring continue

We've in talked Drinkware. our about and expansion couple a

of times on call. this

You've us seen bring and vitality

our and expansion called hard out we into the coolers,

that of work. success

in see I think same we thing our the

And in GoBox out of line products. case protective called I

even into chair on call our expansion things the some an

franchise, which small a great really chair fun our and is

is I very, think that YETI. product very

I think we've about it relates talked as to this Bags, early

coming bags new out. X families of year,

One of a those,

think what direct is thoughtful result we of to approach our

M&A.

acquired So it the of ingredients the some that has we

capabilities we in the MYSTERY and design that with RANCH

YETI. at had

So think a great be of would I it kind step new

we large really a what into think really, is bags global and

travel opportunity.

We haven't of the business our Bags size dimensionalized

today. But did the call XXXX, out growth the we strong in

kind of innovation of cadence acceleration of we that the

think have that coming I in category in XXXX. And

specifically, us and to you're do more of going see more

is fits that. think And it that YETI the -- with and I

fits consumer, both it brand, with the existing the YETI

the acquired. and ones ones we

So excited we're about very

can that what become.

Randal Konik

question. help you Maybe Last us Great. would

dimensionalize in International vantage from a

point.

I think maybe you mid-teens growth. said And

talk countries of kind that's about what primarily

kind looking maybe then a out from? coming And of

the years more few from country now, opportunities

focus or be of may that maybe in that not you

starting of just to into go part that growth

to just XXXX, of give for kind us forecast some

perspective in enduring of opportunity growth that

and are international markets markets where the the

at?

Michael McMullen

Randy.

of terms in the of the first So part

I'll think -- all of first question, I take, well,

in the growth or plan got 'XX we've including

outside region U.S. the every we in outlook talked

about the strength and in XXXX of Australia. Europe

say And I it's fair think to that's planned to continue that

the coming the growth with XXXX Europe, faster in given from

our of business -- that size of there.

there been haven't We

or as Australia we've and in long been as Canada frankly

we market overall have the of that in opportunity front just

Europe. us in

going that's -- our to that's So be

XXXX. region fastest-growing in

The other will was we talked thing Japan that start about we

not there. commercial overly sales But our an it's

'XX. in impact significant

the really first think I full

a that to be -- we as meaningful expect will driver year,

XXXX.

Matthew Reintjes

me let add Randy, on color a little of Yes, just bit

that.

Europe U.K. about the and think So, when we

so early in stage the potential we're alone,

there. And an we team opportunity have incredible

market that's building in of momentum that kind the

that the to talking I think we're about be going

for a for Europe growth and as YETI U.K. driver

got think of I years that's to come. that And kind

opportunity.

what product based size, market relevance Just on we're

both speaking countries, English multiple across seeing the

the and and the of U.K. Europe. non-English speaking parts

launch I Tokyo in of the brand In early our January, was for

there.

all have or over from We region the partners

the that of region up to all from partners showed potential

tell in we that Tokyo. And you will fair trade many I held

like got it what I the felt seen we going when in had early

early days days the in early the the Australia U.K. in in

I in Germany. days The potential and energy really the

away team, up we're and our walked from that for fired with

can Asia what bring.

Operator

with Keith comes question Peter next Piper Your from

Sandler.

Peter Keith

very talked diverse DTC you having a about know I

as as well base customer cookware diverse

wholesalers. Could things some of you talk the about

customer to raise awareness just around doing you're

launches. product tempo this higher have you And as

does launches, of maybe spending a require that also

bit on advertising? more little

Matthew Reintjes

on of couple a Yes. Peter, that. things

I think what

diversity channels does our the -- of is whether

flagship our from everything and DTC that's

to sites the to e-commerce sales corporate is Amazon

pretty ways in us get efficient to gives it out

front of consumers.

a And cost it's in so efficient

ways, many creating way a cost-efficient of

sales, corporate our marketing our partnerships

Amazon, in particular, in there.

I start looking the we're and you'll thing to at, that think

is shift actually of us some moving see we're marketing our

funnel mid-funnel up bit the combination to create that a to

product marketing between brand and and awareness awareness

is funnel lower versus think more which transaction, I

the right contested of part contested marketing spend now.

kind is review doing So we what of constant we're have

our between broad awareness performance spend brand and

we're on period-to-period And marketing. dynamic pretty

putting the where out keep hum pressure we're We the there.

the building many brand of overall of the halo through

things that partnerships familiar ambassadors you're with

our sponsorship type relationships.

more the And then launch product as we go kind down into of

awareness move mid-funnel type between we things,

product and brand-focused focused.

I say I So would wouldn't

big about our pop It's a in the marketing expect more spend.

a make adjustments we think micro within is what really we

marketing budget. of kind thoughtful

Peter Keith

Helpful. then just related And a Okay. maybe as

you're is some leaning question, into categories

that like existing whether they're new or Bags

about Cookware, expanding thinking Chairs, you are

wholesale relationships maybe niche some with

this is leverage something Or where the players? you

in wholesale you place relationships have existing

today?

Matthew Reintjes

I'll out a called start with as -- -- we have you

of and I wholesalers a mishear we have set diverse

think our can product that portfolio. we represent

all Now aren't as our portfolio evolves, wholesalers

probably just the right everything for based place

on of that the the in customer comes what nature and

represent. they

of one our we the So with existing work things closely very

is partners merchandising and the on what inside makes sense

their and that, the I stores. it Alongside in mentioned

prepared at that partners remarks, we're looking constantly

and fill we complement think our and could in wholesale then

our complement Whether that omnichannel. entire ultimately

some kind of places type for is some of more our homewares

recent portfolio or as launches as in Bags expands, XXXX our

a creates for opportunity new it expands, places potential

wholesale for in placed. YETI be to

different think, position from, we've where shift no or So I

build been is over years, -- XX X, we to want the last which

a strong wholesale and wholesale a is complementary network

the network we can support to that map road as we product

product road that's coming. have map and the

Operator

Bausa Sabrina question next with comes from Your

Blair. William

Unknown Analyst

Could This is Blee. for some provide you Sabrina Philip on

into been how insight demand trends tracking have

into then quarter-to-date? insight or any sell-through And

sell-in trends?

Michael McMullen

commentary provide So we don't of sort traditionally

we of the current earnings. do quarter release when

in of sell-through. say is I'd What But terms and

all, overall saw first for growth we sell-through of

the year, last year in region, including every

[indiscernible].

thing I'd QX in The say other

were sell-in specifically, and QX and sell-through

each for category. aligned

really saw strong we So

growth in within sell-through and C&E both sell-in

sell-through Drinkware kind and the of matched

sell-in saw. that we

where So I is left that's think

inventories we are. feel channel good about where

They're the healthy into heading year. of And sort

into we'll to go -- we go as continue we that manage

through XXXX.

Unknown Analyst

going then to kind Great. of And promotional the back

environment, of you kind

[indiscernible] on competitive and

you fourth the during Do pressures promotional quarter.

expect forward? those headwinds to elevated going remain

throughout that of some normalizing Does your guide embed

year? the

Matthew Reintjes

Yes.

we I a that expect think Drinkware that do --

this think related to I of particular, some is in

assortment the a it's pretty that consolidated fact

out narrow there that's competing for a relatively

a of I And market. the there's of lot portion think

around playing into competition -- of kind creating

the value piece.

to contemplate that in all wouldn't I expect So of end. We

guide. our

importantly, more think I expansion our strategy

think of we've which is had number we underway a years, for

kind and ultimate long-term the mid- the of to defense

now. right competitive we think environment exists that And

persist to XXXX. we'll in continue

Operator

with Altobello Raymond Joe from comes question next Your

James.

Unknown Analyst

on you martin wholesale It's Where see do growth Joe. for

Or is it Is space? shelf it coming expanded new doors? from?

And wholesale did expansion mention additionally, you

that consumers. new What address that opportunities might

look like?

Michael McMullen

Yes.

In terms I first the of part the question, of

Matt think it's said, -- constantly we're a like

new We at wholesale. opportunities within looking

don't have a significant door expansion planned in

of I'd What a say is outlook. our combination it's

sell-through growth as expansion assortment of our

product We're conversations grows. portfolio having

our with looking partners wholesale existing about

at ways to

[indiscernible]

Matthew Reintjes

the kind of expansion of the piece At question about

on opportunities. is I people where mean our focus

And what. for our portfolio as shop to continues

to analyze continue we our evolve, wholesale

say, and match those we footprint do and do

in occasions. shopping those consumers the intercept

range a independents to small it's so And from bigger broad

are players opportunities wouldn't us. that for the I say

the has changed. opportunity set fundamentally

analysis Our

of them is what on. we kind calibrating of keep

So nothing

are call out, we on we been to specific have and but focused

wholesale for years on want we that strong partnerships

to to innovation grow, want continue and to them. bring we

newness So are their to we And the customers. those bring

relationships best we've had for years.

Operator

There are no further questions at now this turn time. I will

the call to closing for over Matt remarks.

Matthew Reintjes

Thanks, We forward everyone, to for us. look joining

you our on call. with speaking QX

Operator

and call Ladies your gentlemen, conference concludes this

for and ask you today. that We thank participating for you

please disconnect your lines.

YETI (YETI) 13 Feb 252024 Q4 Earnings call transcript