Net Sales Increased 10% EPS Increased
35%; Adjusted EPS Increased 18% Updates EPS Outlook to
High-End of Previous Range
YETI Holdings, Inc. (“YETI”) (NYSE: YETI) today announced its
financial results for the third quarter ended September 28, 2024.
YETI reports its financial performance in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”) and as adjusted on a non-GAAP basis. Please see
“Non-GAAP Financial Measures,” and “Reconciliation of GAAP to
Non-GAAP Financial Information” below for additional information
and reconciliations of the non-GAAP financial measures to the most
comparable GAAP financial measures.
Third Quarter 2024
Highlights
- Net sales increased 10%
- Coolers & Equipment net sales increased 12%
- Drinkware net sales increased 9%
- Wholesale net sales increased 14%
- Direct-to-consumer net sales increased 8%
- International net sales increased 30%
- U.S. net sales increased 7%
- Gross margin was flat at 58.0%; Adjusted gross margin expanded
40 basis points to 58.2%
- Operating margin expanded 30 basis points to 14.6%; Adjusted
operating margin expanded 10 basis points to 16.6%
- EPS increased 35% to $0.66; Adjusted EPS increased 18% to
$0.71
Matt Reintjes, President and Chief Executive Officer, commented,
“Our positive momentum continued in the third quarter, with strong
performance across our product portfolio and robust growth in our
international business. We saw healthy demand across our major
sales channels, driven by the continued successful execution of our
strategic priorities. Our gross margins continued to expand despite
a choppy macro environment, enabling us to continue to invest in
our business while delivering strong earnings growth. Our supply
chain diversification efforts remain on track, with production
commencing at our second drinkware facility outside of China during
the quarter. Finally, we continue to build on our strong cash
position, which provides us the opportunity to further invest in
the business, while also pursuing a combination of strategic
acquisitions and share repurchases.”
Mr. Reintjes continued, “As it relates to the YETI brand, we
drove strong brand engagement in the quarter, with over 100 global
events across our broad and growing enthusiast communities. These
are exciting programs and partnerships that are uniquely YETI and
showcase our product breadth and brand reach. On the product side,
we continued to release new innovation, with several highly
anticipated launches that reinforced our commitment to our
drinkware category through our expansion in bar and tableware as
well as our entry into the premium cookware market. In regards to
our global business, our brand and customer base continues to grow,
leading to a fourth consecutive quarter of over 30% sales growth
outside the United States.”
Third Quarter 2024
Results
Sales increased 10% to $478.4 million, compared to $433.6
million during the same period last year.
Sales for the third quarter of 2024 and 2023 include $2.7
million and $6.3 million, respectively, of sales related to gift
card redemptions in connection with recall remedies.
- Direct-to-consumer (“DTC”) channel sales increased 8% to $280.8
million, compared to $259.5 million in the prior year quarter, due
to growth in both Coolers & Equipment and Drinkware.
- Wholesale channel sales increased 14% to $197.6 million,
compared to $174.1 million in the same period last year, due to
growth in both Drinkware and Coolers & Equipment.
- Drinkware sales increased 9% to $275.0 million, compared to
$253.3 million in the prior year quarter, driven by the continued
expansion and innovation of our Drinkware product offerings and new
seasonal colorways.
- Coolers & Equipment sales increased 12% to $192.6 million,
compared to $171.5 million in the same period last year, driven by
strong performance in bags, hard coolers, and outdoor living
products.
Gross profit increased 11% to $277.7 million, compared to
$251.3 million in the third quarter of 2023. Gross margin was flat
at 58.0%, compared to the prior year quarter. Lower inbound freight
costs and lower product costs were offset by higher customization
costs and other costs.
Adjusted gross profit increased 11% to $278.5 million, or
58.2% of adjusted sales, compared to $250.4 million, or 57.8% of
adjusted sales, in the third quarter of 2023. The 40 basis point
increase in adjusted gross margin was primarily due to lower
inbound freight costs and lower product costs, partially offset by
higher customization costs and other costs.
Selling, general, and administrative (“SG&A”)
expenses increased 10% to $208.1 million, compared to $189.4
million in the third quarter of 2023. As a percentage of sales,
SG&A expenses decreased 20 basis points to 43.5% from 43.7% in
the prior year period. The increase in SG&A expenses was
primarily due to higher employee costs and marketing expenses.
Adjusted SG&A expenses increased 11% to $199.3
million, compared to $179.0 million in the third quarter of 2023.
As a percentage of adjusted sales, adjusted SG&A expenses
increased 40 basis points to 41.7% from 41.3% in the prior year
period. This increase was primarily due to higher employee
costs.
Operating income increased 13% to $69.6 million, or 14.6%
of sales, compared to $61.9 million, or 14.3% of sales during the
prior year quarter.
Adjusted operating income increased 11% to $79.2 million,
or 16.6% of adjusted sales, compared to $71.4 million, or 16.5% of
adjusted sales during the same period last year.
Net income increased 32% to $56.3 million, or 11.8% of
sales, compared to $42.7 million, or 9.8% of sales in the prior
year quarter; Net income per diluted share was $0.66,
compared to $0.49 in the prior year quarter.
Adjusted net income increased 14% to $60.4 million, or
12.6% of adjusted sales, compared to $52.9 million, or 12.2% of
adjusted sales in the prior year quarter; Adjusted net income
per diluted share increased 18% to $0.71, compared to $0.60 per
diluted share in the prior year quarter.
Nine Months Ended September 28, 2024
Results
Sales increased 13% to $1,283.3 million, compared to
$1,138.9 million in the prior year. The recall reserves unfavorably
impacted sales by $24.5 million in the prior year period. See
“Product Recall Reserves” below for additional information on the
impact of the product recalls referenced throughout this press
release.
Adjusted sales, which exclude the unfavorable impact of
the recall reserve adjustment in the first nine months of 2023,
increased 10% to $1,283.3 million.
Sales and adjusted net sales for the first nine months of 2024
and 2023 include $7.1 million and $18.8 million, respectively, of
sales related to gift card redemptions in connection with recall
remedies.
- DTC channel sales increased 10% to $719.0 million, compared to
$652.9 million in the prior year period, due to growth in both
Coolers & Equipment and Drinkware. Excluding the impact related
to the recall reserves, DTC channel adjusted sales increased 9% to
$719.0 million.
- Wholesale channel sales increased 16% to $564.3 million,
compared to $486.1 million in the same period last year, due to
growth in both Coolers & Equipment and Drinkware. Excluding the
impact related to the recall reserves, wholesale channel adjusted
sales increased 12% to $564.3 million.
- Drinkware sales increased 9% to $736.1 million, compared to
$677.0 million in the prior year period, driven by the continued
expansion and innovation of our Drinkware product offerings and new
seasonal colorways.
- Coolers & Equipment sales increased 20% to $518.4 million,
compared to $432.5 million in the same period last year, driven by
strong performance in bags and soft coolers. Excluding the impact
related to the recall reserves, Coolers & Equipment adjusted
sales increased 13% to $518.4 million.
Gross profit increased 17% to $736.8 million, or 57.4% of
sales, compared to $628.0 million, or 55.1% of sales, in the prior
year period. The recall reserves unfavorably impacted gross profit
by $17.4 million in first nine months of 2023 and had a favorable
40 basis point impact on the increase in gross margin compared to
the prior year. The remaining increase was primarily due to lower
inbound freight costs and lower product costs.
Adjusted gross profit increased 15% to $742.4 million, or
57.8% of adjusted sales, compared to $645.3 million, or 55.5% of
adjusted sales, in the prior year period. The 230 basis point
increase in adjusted gross margin was primarily due to lower
inbound freight costs and lower product costs.
SG&A expenses increased 15% to $574.0 million,
compared to $500.7 million in the prior year period. As a
percentage of sales, SG&A expenses increased 70 basis points to
44.7% from 44.0% in the prior year period. Excluding the impact of
the recall reserves, SG&A expenses increased $62.8 million
primarily due to higher employee costs, higher variable expenses on
higher sales, and marketing expenses.
Adjusted SG&A expenses increased 12% to $543.6
million, compared to $485.2 million in the prior year period. As a
percentage of adjusted sales, adjusted SG&A expenses increased
by 70 basis points to 42.4% from 41.7% in the prior year period.
This increase was primarily due to higher employee costs.
Operating income increased 28% to $162.9 million, or
12.7% of sales, compared to $127.3 million, or 11.2% of sales
during the prior year period.
Adjusted operating income increased 24% to $198.8
million, or 15.5% of adjusted sales, compared to $160.2 million, or
13.8% of adjusted sales during the same period last year.
Net income increased 34% to $122.5 million, or 9.5% of
sales, compared to $91.3 million, or 8.0% of sales in the prior
year period; Net income per diluted share was $1.42,
compared to $1.05 in the prior year.
Adjusted net income increased 26% to $149.4 million, or
11.6% of adjusted sales, compared to $118.2 million, or 10.2% of
adjusted sales in the prior year period; Adjusted net income per
diluted share increased 29% to $1.74, compared to $1.35 per
diluted share in the prior year.
Balance Sheet and Other
Highlights
Cash was $280.5 million, compared to $281.4 million at
the end of the third quarter of 2023.
Inventory increased 8% to $370.2 million, compared to
$341.3 million at the end of the prior year quarter.
Total debt, excluding finance leases and unamortized
deferred financing fees, was $79.1 million, compared to $83.3
million at the end of the third quarter of 2023. During the third
quarter of 2024, we made mandatory debt payments of $1.1
million.
Updated 2024 Outlook
Mr. Reintjes concluded, “Our strong execution in the third
quarter gives us confidence in our full year outlook. Despite some
uncertainty in the macroeconomic backdrop, we believe we are well
positioned as we head into the holiday season, and we continue to
expect to end 2024 with strong topline and earnings growth, as well
as exceptional cash flow generation, which will further strengthen
our balance sheet and enable us to continue to return value to
shareholders.”
For Fiscal 2024, YETI expects:
- Adjusted sales to increase approximately 9% (versus
previous outlook of between 8% and 10%);
- Adjusted operating income as a percentage of adjusted
sales of approximately 16.5% (consistent with previous
outlook);
- An effective tax rate of approximately 24.8% (compared
to 24.8% in the prior year period);
- Adjusted net income per diluted share of approximately
$2.65 (versus previous outlook of between $2.61 and $2.65),
reflecting an 18% increase;
- Diluted weighted average shares outstanding of
approximately 86.0 million (consistent with previous outlook);
and
- Capital expenditures of approximately $50 million
(versus previous outlook of between $50 million and $60 million)
primarily to support investments in technology and new product
innovation.
Product Recall Reserves
The results of Fiscal 2023 included in this press release
include the impact of product recalls on certain soft coolers,
which we refer to as the “product recalls” herein unless otherwise
indicated. We recorded the following impacts as a result of recall
reserve adjustments. These impacts are excluded from our non-GAAP
results:
Three Months Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Decrease to net sales(1)
$
—
$
(18
)
$
—
$
(24,524
)
Decrease to cost of goods sold(2)
—
843
—
7,148
Increase (decrease) to gross profit
—
825
—
(17,376
)
Decrease to SG&A expenses(3)
—
—
—
10,549
Increase (decrease) to income before
income taxes
$
—
$
825
$
—
$
(6,827
)
_________________________
(1)
For the three months ended September 30,
2023, reflects an immaterial reduction to sales for higher
returns-related costs impacting the wholesale channel. For the nine
months ended September 30, 2023, primarily reflects the unfavorable
impact of the recall reserve adjustment related to higher estimated
future recall remedies (i.e., estimated gift card elections). Of
the total net sales impact, $8.1 million and $16.4 million was
allocated to our DTC and wholesale channels, respectively, for nine
months ended September 30, 2023. These amounts were allocated based
on the historical channel sell-in basis of the affected
products.
(2)
For the three months ended September 30,
2023, reflects a benefit related to lower than anticipated
recall-related costs. For the nine months ended September 30, 2023,
primarily reflects the favorable impact of the recall reserve
adjustment related to lower estimated costs of future product
replacement remedy elections and logistics costs.
(3)
Primarily reflects the favorable impact of
the recall reserve adjustment related to lower estimated other
recall-related costs, including logistics costs.
Conference Call Details
A conference call to discuss the third quarter of 2024 financial
results is scheduled for today, November 7, 2024, at 8:00 a.m.
Eastern Time. Investors and analysts interested in participating in
the call are invited to dial 800-717-1738 (international callers,
please dial 646-307-1865) approximately 10 minutes prior to the
start of the call. A live audio webcast of the conference call will
be available online at http://investors.yeti.com. A replay will be
available through November 21, 2024 by dialing 844-512-2921
(international callers, 412-317-6671). The accompanying access code
for this call is 1171353.
About YETI Holdings, Inc.
Headquartered in Austin, Texas, YETI is a global designer,
retailer, and distributor of innovative outdoor products. From
coolers and drinkware to bags and apparel, YETI products are built
to meet the unique and varying needs of diverse outdoor pursuits,
whether in the remote wilderness, at the beach, or anywhere life
takes you. By consistently delivering high-performing, exceptional
products, we have built a strong following of brand loyalists
throughout the world, ranging from serious outdoor enthusiasts to
individuals who simply value products of uncompromising quality and
design. We have an unwavering commitment to outdoor and recreation
communities, and we are relentless in our pursuit of building
superior products for people to confidently enjoy life outdoors and
beyond. For more information, please visit www.YETI.com.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP,
we supplement our results with non-GAAP financial measures,
including adjusted net sales, adjusted gross profit, adjusted
SG&A expenses, adjusted operating income, adjusted net income,
adjusted net income per diluted share (which we also refer to as
adjusted EPS) as well as adjusted gross profit and adjusted
SG&A expenses, adjusted operating income and adjusted net
income as a percentage of adjusted net sales. Our management uses
these non-GAAP financial measures in conjunction with GAAP
financial measures to measure our profitability and to evaluate our
financial performance. We believe that these non-GAAP financial
measures provide meaningful supplemental information regarding the
underlying operating performance of our business and are
appropriate to enhance an overall understanding of our financial
performance. These non-GAAP financial measures have limitations as
analytical tools in that they do not reflect all of the amounts
associated with our results of operations as determined in
accordance with GAAP. Because of these limitations, these non-GAAP
financial measures should be considered along with GAAP financial
performance measures. The presentation of these non-GAAP financial
measures is not intended to be considered in isolation or as a
substitute for, or superior to, financial information prepared and
presented in accordance with GAAP. Investors are encouraged to
review the reconciliation of these non-GAAP financial measures to
their most directly comparable GAAP financial measures. A
reconciliation of the non-GAAP financial measures to such GAAP
measures can be found below.
YETI does not provide a reconciliation of forward-looking
non-GAAP to GAAP financial measures because such reconciliations
are not available without unreasonable efforts. This is due to the
inherent difficulty in forecasting with reasonable certainty
certain amounts that are necessary for such reconciliation,
including in particular the impact of the product recalls and
realized and unrealized foreign currency gains and losses reported
within other expense. For the same reasons, we are unable to
forecast with reasonable certainty all deductions and additions
needed in order to provide a forward-looking GAAP financial
measures at this time. The amount of these deductions and additions
may be material and, therefore, could result in forward-looking
GAAP financial measures being materially different or less than
forward-looking non-GAAP financial measures. See “Forward-looking
statements” below.
Forward-looking statements
This press release contains ‘‘forward-looking statements’’
within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical or
current fact included in this press release are forward-looking
statements. Forward-looking statements include statements
containing words such as “anticipate,” “assume,” “believe,” “can
have,” “contemplate,” “continue,” “could,” “design,” “due,”
“estimate,” “expect,” “forecast,” “goal,” “intend,” “likely,”
“may,” “might,” “objective,” “plan,” “predict,” “project,”
“potential,” “seek,” “should,” “target,” “will,” “would,” and other
words and terms of similar meaning in connection with any
discussion of the timing or nature of future operational
performance or other events. For example, all statements made
relating to future financial performance, capital expenditures,
strategic acquisitions or share repurchases, and our expectations
for opportunity, growth, investments, and new products, including
those set forth in the quotes from YETI’s President and CEO, and
the 2024 financial outlook provided herein, constitute
forward-looking statements. All forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially from those that are expected and, therefore, you
should not unduly rely on such statements. The risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by these forward-looking statements
include but are not limited to: (i) economic conditions or consumer
confidence in future economic conditions; (ii) our ability to
maintain and strengthen our brand and generate and maintain ongoing
demand for our products; (iii) our ability to successfully design,
develop and market new products; (iv) our ability to effectively
manage our growth; (v) our ability to expand into additional
consumer markets, and our success in doing so; (vi) the success of
our international expansion plans; (vii) our ability to compete
effectively in the outdoor and recreation market and protect our
brand; (viii) the level of customer spending for our products,
which is sensitive to general economic conditions and other
factors; (ix) problems with, or loss of, our third-party contract
manufacturers and suppliers, or an inability to obtain raw
materials; (x) fluctuations in the cost and availability of raw
materials, equipment, labor, and transportation and subsequent
manufacturing delays or increased costs; (xi) our ability to
accurately forecast demand for our products and our results of
operations; (xii) our relationships with our national, regional,
and independent retail partners, who account for a significant
portion of our sales; (xiii) the impact of natural disasters and
failures of our information technology on our operations and the
operations of our manufacturing partners; (xiv) our ability to
attract and retain skilled personnel and senior management, and to
maintain the continued efforts of our management and key employees;
(xv) the impact of our indebtedness on our ability to invest in the
ongoing needs of our business, and (xvi) our ability to
successfully execute our share repurchase program and its impact on
stockholder value and the volatility of the price of our common
stock. For a more extensive list of factors that could materially
affect our results, you should read our filings with the United
States Securities and Exchange Commission (the “SEC”), including
our Annual Report on Form 10-K for the year ended December 30,
2023, as such filings may be amended, supplemented or superseded
from time to time by other reports YETI files with the SEC.
These forward-looking statements are made based upon detailed
assumptions and reflect management’s current expectations and
beliefs. While YETI believes that these assumptions underlying the
forward-looking statements are reasonable, YETI cautions that it is
very difficult to predict the impact of known factors, and it is
impossible for YETI to anticipate all factors that could affect
actual results.
The forward-looking statements included here are made only as of
the date hereof. YETI undertakes no obligation to publicly update
or revise any forward-looking statement as a result of new
information, future events, or otherwise, except as required by
law. Many of the foregoing risks and uncertainties may be
exacerbated by the global business and economic environment,
including ongoing geopolitical conflicts. Solely for convenience,
certain trademark and service marks referred to in this press
release appear without the ® or ™ symbols, but those references are
not intended to indicate, in any way, that we will not assert, to
the fullest extent under applicable law, our rights to these
trademarks and service marks.
YETI HOLDINGS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per
share amounts)
Three Months Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Net sales
$
478,440
$
433,561
$
1,283,333
$
1,138,920
Cost of goods sold
200,713
182,310
546,487
510,961
Gross profit
277,727
251,251
736,846
627,959
Selling, general, and administrative
expenses
208,092
189,374
573,974
500,653
Operating income
69,635
61,877
162,872
127,306
Interest income (expense), net
384
(285
)
495
(1,610
)
Other income (expense), net
4,061
(4,032
)
351
(2,782
)
Income before income taxes
74,080
57,560
163,718
122,914
Income tax expense
(17,796
)
(14,903
)
(41,183
)
(31,622
)
Net income
$
56,284
$
42,657
$
122,535
$
91,292
Net income per share
Basic
$
0.66
$
0.49
$
1.44
$
1.05
Diluted
$
0.66
$
0.49
$
1.42
$
1.05
Weighted-average shares
outstanding
Basic
84,707
86,783
85,285
86,663
Diluted
85,492
87,589
86,039
87,290
YETI HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands, except per
share amounts)
September 28,
2024
December 30,
2023
September 30,
2023
ASSETS
Current assets
Cash
$
280,464
$
438,960
$
281,360
Accounts receivable, net
143,673
95,774
127,896
Inventory
370,233
337,208
341,348
Prepaid expenses and other current
assets
51,949
42,463
40,728
Total current assets
846,319
914,405
791,332
Property and equipment, net
131,009
130,714
132,215
Operating lease right-of-use assets
82,006
77,556
60,376
Goodwill
72,894
54,293
54,293
Intangible assets, net
137,946
117,629
114,140
Other assets
3,013
2,595
3,526
Total assets
$
1,273,187
$
1,297,192
$
1,155,882
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
148,174
$
190,392
$
179,086
Accrued expenses and other current
liabilities
117,476
130,026
130,333
Taxes payable
16,314
33,489
11,962
Accrued payroll and related costs
22,465
23,141
19,570
Operating lease liabilities
17,410
14,726
13,366
Current maturities of long-term debt
6,287
6,579
6,512
Total current liabilities
328,126
398,353
360,829
Long-term debt, net of current portion
74,415
78,645
79,529
Operating lease liabilities,
non-current
79,932
76,163
60,212
Other liabilities
20,733
20,421
16,527
Total liabilities
503,206
573,582
517,097
Stockholders’ Equity
Common stock
891
886
885
Treasury stock, at cost
(200,810
)
(100,025
)
(100,025
)
Additional paid-in capital
411,245
386,377
378,556
Retained earnings
560,971
438,436
359,843
Accumulated other comprehensive loss
(2,316
)
(2,064
)
(474
)
Total stockholders’ equity
769,981
723,610
638,785
Total liabilities and stockholders’
equity
$
1,273,187
$
1,297,192
$
1,155,882
YETI HOLDINGS, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands, except per
share amounts)
Nine Months Ended
September 28,
2024
September 30,
2023
Cash Flows from Operating
Activities:
Net income
$
122,535
$
91,292
Adjustments to reconcile net income to
cash provided by (used in) operating activities:
Depreciation and amortization
35,648
34,391
Amortization of deferred financing
fees
488
441
Stock-based compensation
26,020
21,918
Deferred income taxes
(2,928
)
20,699
Impairment of long-lived assets
2,025
1,963
Loss on modification and extinguishment of
debt
—
330
Product recalls
—
8,538
Other
(1,492
)
239
Changes in operating assets and
liabilities:
Accounts receivable
(43,858
)
(48,836
)
Inventory
(15,104
)
28,180
Other current assets
(4,022
)
(6,505
)
Accounts payable and accrued expenses
(65,515
)
(36,288
)
Taxes payable
(21,057
)
(3,323
)
Other
3,066
1,730
Net cash provided by operating
activities
35,806
114,769
Cash Flows from Investing
Activities:
Purchases of property and equipment
(31,341
)
(38,983
)
Business acquisition, net of cash
acquired
(36,164
)
—
Additions of intangibles, net
(19,542
)
(19,280
)
Net cash used in investing activities
(87,047
)
(58,263
)
Cash Flows from Financing
Activities:
Repayments of long-term debt
(3,164
)
(6,680
)
Payments of deferred financing fees
—
(2,824
)
Taxes paid in connection with employee
stock transactions
(1,436
)
(2,421
)
Proceeds from employee stock
transactions
289
1,573
Finance lease principal payment
(3,206
)
(1,579
)
Repurchase of common stock
(100,000
)
—
Net cash used in financing activities
(107,517
)
(11,931
)
Effect of exchange rate changes on
cash
262
2,044
Net (decrease) increase in cash
(158,496
)
46,619
Cash, beginning of period
438,960
234,741
Cash, end of period
$
280,464
$
281,360
YETI HOLDINGS, INC.
Supplemental Financial
Information
Reconciliation of GAAP to
Non-GAAP Financial Information
(Unaudited) (In thousands
except per share amounts)
Three Months Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Net sales
$
478,440
$
433,561
$
1,283,333
$
1,138,920
Product recall(1)
—
18
—
24,524
Adjusted net sales
$
478,440
$
433,579
$
1,283,333
$
1,163,444
Gross profit
$
277,727
$
251,251
$
736,846
$
627,959
Transition costs(2)
803
—
5,558
—
Product recall(1)
—
(825
)
—
17,376
Adjusted gross profit
$
278,530
$
250,426
$
742,404
$
645,335
Selling, general, and administrative
expenses
$
208,092
$
189,374
$
573,974
$
500,653
Non-cash stock-based compensation
expense
(8,695
)
(7,805
)
(26,020
)
(21,918
)
Long-lived asset impairment
—
(1,963
)
(2,025
)
(1,963
)
Product recall(1)
—
—
—
10,549
Organizational realignment costs(3)
—
—
(1,122
)
(1,582
)
Transition costs(4)
(71
)
—
(753
)
—
Business optimization expense(5)
—
(582
)
(415
)
(582
)
Adjusted selling, general, and
administrative expenses
$
199,326
$
179,024
$
543,639
$
485,157
Gross margin
58.0
%
58.0
%
57.4
%
55.1
%
Adjusted gross margin
58.2
%
57.8
%
57.8
%
55.5
%
SG&A expenses as a % of net sales
43.5
%
43.7
%
44.7
%
44.0
%
Adjusted SG&A expenses as a % of
adjusted net sales
41.7
%
41.3
%
42.4
%
41.7
%
_________________________
(1)
Represents adjustments and charges
associated with product recalls.
(2)
Represents inventory step-up costs for the
three months ended September 28, 2024, and inventory step-up and
disposal costs for the nine months ended September 28, 2024, in
connection with the acquisition of Mystery Ranch, LLC. Inventory
step-up costs are expensed as the acquired inventory is sold.
(3)
Represents employee severance costs in
connection with strategic organizational realignments.
(4)
Represents transition costs in connection
with the acquisition of Mystery Ranch, LLC, including third-party
business integration costs.
(5)
Represents start-up, transition and
integration costs associated with our new distribution facilities
in the United Kingdom for the nine months ended September 28, 2024,
and the Netherlands, and Australia for the three and nine months
ended September 30, 2023.
YETI HOLDINGS, INC.
Supplemental Financial
Information
Reconciliation of GAAP to
Non-GAAP Financial Information
(Unaudited) (In thousands
except per share amounts)
Three Months Ended
Nine Months Ended
September 28,
2024
September 30,
2023
September 28,
2024
September 30,
2023
Operating income
$
69,635
$
61,877
$
162,872
$
127,306
Adjustments:
Non-cash stock-based compensation
expense(1)
8,695
7,805
26,020
21,918
Long-lived asset impairment(1)
—
1,963
2,025
1,963
Product recalls(2)
—
(825
)
—
6,827
Organizational realignment costs(1)(3)
—
—
1,122
1,582
Business optimization expense(1)(5)
—
582
415
582
Transition costs(4)
874
—
6,311
—
Adjusted operating income
$
79,204
$
71,402
$
198,765
$
160,178
Net income
$
56,284
$
42,657
$
122,535
$
91,292
Adjustments:
Non-cash stock-based compensation
expense(1)
8,695
7,805
26,020
21,918
Long-lived asset impairment(1)
—
1,963
2,025
1,963
Product recalls(2)
—
(825
)
—
6,827
Organizational realignment costs(1)(3)
—
—
1,122
1,582
Business optimization expense(1)(5)
—
582
415
582
Transition costs(4)
874
—
6,311
—
Other income (expense), net(6)
(4,061
)
4,033
(351
)
2,782
Tax impact of adjusting items(7)
(1,350
)
(3,321
)
(8,708
)
(8,735
)
Adjusted net income
$
60,442
$
52,894
$
149,369
$
118,211
Net sales
$
478,440
$
433,561
$
1,283,333
$
1,138,920
Adjusted net sales
$
478,440
$
433,579
$
1,283,333
$
1,163,444
Operating income as a % of net sales
14.6
%
14.3
%
12.7
%
11.2
%
Adjusted operating income as a % of
adjusted net sales
16.6
%
16.5
%
15.5
%
13.8
%
Net income as a % of net sales
11.8
%
9.8
%
9.5
%
8.0
%
Adjusted net income as a % of adjusted net
sales
12.6
%
12.2
%
11.6
%
10.2
%
Net income per diluted share
$
0.66
$
0.49
$
1.42
$
1.05
Adjusted net income per diluted share
$
0.71
$
0.60
$
1.74
$
1.35
Weighted average shares outstanding used
to compute adjusted net income per diluted share
85,492
87,589
86,039
87,290
_________________________
(1)
These costs are reported in SG&A
expenses.
(2)
Represents adjustments and charges
associated with product recalls.
(3)
Represents employee severance costs in
connection with strategic organizational realignments.
(4)
Represents transition costs in connection
with the acquisition of Mystery Ranch, LLC. For the three months
ended September 28, 2024 these include inventory step-up costs and
third-party integration costs. For the nine months ended September
28, 2024, these include inventory step-up costs, inventory disposal
costs, and third-party business integration costs.
(5)
Represents start-up, transition and
integration costs associated with our new distribution facilities
in the United Kingdom for the nine months ended September 28, 2024,
and the Netherlands, and Australia for the three and nine months
ended September 30, 2023.
(6)
Other income (expense), net substantially
consists of realized and unrealized foreign currency gains and
losses on intercompany balances that arise in the ordinary course
of business.
(7)
Represents the tax impact of adjustments
calculated at an expected statutory tax rate of 24.5% for each of
the three and nine months ended September 28, 2024 and September
30, 2023.
YETI HOLDINGS, INC.
Supplemental Financial
Information
Reconciliation of GAAP to
Non-GAAP Financial Measures
(Unaudited) (In
thousands)
Three Months Ended September
28, 2024
Three Months Ended September
30, 2023
Net Sales
Product Recalls(1)
Adjusted Net Sales
Net Sales
Product Recalls(1)
Adjusted Net Sales
Channel
Wholesale
$
197,629
$
—
$
197,629
$
174,062
$
18
$
174,080
Direct-to-consumer
280,811
—
280,811
259,499
—
259,499
Total
$
478,440
$
—
$
478,440
$
433,561
$
18
$
433,579
Category
Coolers & Equipment
$
192,595
$
—
$
192,595
$
171,547
$
18
$
171,565
Drinkware
274,981
—
274,981
253,274
—
253,274
Other
10,864
—
10,864
8,740
—
8,740
Total
$
478,440
$
—
$
478,440
$
433,561
$
18
$
433,579
Geographic Region
United States
$
390,176
$
—
$
390,177
$
365,695
$
19
$
365,714
International
88,264
—
88,263
67,866
(1
)
67,865
Total
$
478,440
$
—
$
478,440
$
433,561
$
18
$
433,579
_________________________
(1)
Represents adjustments and charges
associated with product recalls.
Nine Months Ended September
28, 2024
Nine Months Ended September
30, 2023
Net Sales
Product Recalls(1)
Adjusted Net Sales
Net Sales
Product Recalls(1)
Adjusted Net Sales
Channel
Wholesale
$
564,326
$
—
$
564,326
$
486,066
$
16,392
$
502,458
Direct-to-consumer
719,007
—
719,007
652,854
8,132
660,986
Total
$
1,283,333
$
—
$
1,283,333
$
1,138,920
$
24,524
$
1,163,444
Category
Coolers & Equipment
$
518,443
$
—
$
518,443
$
432,511
$
24,524
$
457,035
Drinkware
736,084
—
736,084
676,978
—
676,978
Other
28,806
—
28,806
29,431
—
29,431
Total
$
1,283,333
$
—
$
1,283,333
$
1,138,920
$
24,524
$
1,163,444
Geographic Region
United States
$
1,052,858
$
—
$
1,052,859
$
964,569
$
23,920
$
988,489
International
230,475
—
230,474
174,351
604
174,955
Total
$
1,283,333
$
—
$
1,283,333
$
1,138,920
$
24,524
$
1,163,444
_________________________
(1)
Represents adjustments and charges
associated with product recalls.
YETI HOLDINGS, INC.
Fiscal 2024 Outlook
(Unaudited) (In thousands
except per share amounts)
Fiscal 2023
Fiscal 2024 Outlook
Adjusted net sales
$
1,680,413
$
1,831,650
Adjusted operating income
$
262,785
$
302,222
Adjusted operating income as a % of
adjusted net sales
15.6
%
16.5
%
Adjusted net income
$
196,987
$
227,896
Adjusted net income as a % of adjusted net
sales
11.7
%
12.4
%
Adjusted net income per diluted share
$
2.25
$
2.65
Weighted average shares outstanding -
diluted
87,403
85,973
YETI HOLDINGS, INC.
Supplemental Financial
Information
Reconciliation of GAAP to
Non-GAAP Financial Information
(Unaudited) (In
thousands)
Twelve Months Ended
December 30,
2023
Net sales
$
1,658,713
Product recall(1)
21,700
Adjusted net sales
$
1,680,413
Operating income
$
225,458
Adjustments:
Non-cash stock-based compensation
expense(2)
29,800
Long-lived asset impairment(2)
2,927
Product recalls(1)
1,895
Organizational realignment costs(2)(3)
1,582
Business optimization expense(2)(4)
582
Transaction costs(2)(5)
541
Adjusted operating income
$
262,785
Net income
$
169,885
Adjustments:
Non-cash stock-based compensation
expense(2)
29,800
Long-lived asset impairment(2)
2,927
Product recalls(1)
1,895
Organizational realignment costs(2)(3)
1,582
Business optimization expense(2)(4)
582
Transaction costs(2)(5)
541
Other expense(6)
(1,430
)
Tax impact of adjusting items(7)
(8,795
)
Adjusted net income
$
196,987
Operating income as a % of net sales
13.6
%
Adjusted operating income as a % of net
sales
15.6
%
Net income as a % of net sales
10.2
%
Adjusted net income as a % of net
sales
11.7
%
Net income per diluted share
$
1.94
Adjusted net income per diluted share
$
2.25
Weighted average common shares outstanding
used to compute adjusted net income per diluted share
87,403
_________________________
(1)
Represents adjustments and charges
associated with product recalls.
(2)
These costs are reported in SG&A
expenses.
(3)
Represents employee severance costs in
connection with strategic organizational realignments.
(4)
Represents start-up costs, transition and
integration charges associated with our new distribution facilities
in the Netherlands and Australia.
(5)
Represents third-party costs related to
the announced acquisition of Mystery Ranch, LLC, including
professional, legal, and other transaction costs.
(6)
Other expense substantially consists of
realized and unrealized foreign currency gains and losses on
intercompany balances that arise in the ordinary course of
business.
(7)
Represents the tax impact of adjustments
calculated at an expected statutory tax rate of 24.5%.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107149142/en/
Investor Relations Contact: Maria Lycouris Solebury
Strategic Communications Investor.relations@yeti.com
Media Contact: YETI Holdings, Inc. Media Hotline
Media@yeti.com
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