Yahoo Finance

Mr. Reintjes continued, "While 2024 was a great year for YETI, with product and geographic expansion, strong topline, earnings, and free cash flow generation, and continued brand strength globally, I am most excited about what is to come. Against a market colored by a dynamic macro and competitive environment, our long-term focus remains on boosting this powerful and growing global brand while we continue to diversify our product portfolio. When we combine product innovation and untapped global potential with broadening and deepening our penetration in the US market, our long-term priorities remain unchanged."

Fourth Quarter 2024 Results

Sales increased 5% to $546.5 million, compared to $519.8 million during the same period last year. The recall reserves unfavorably impacted sales by $8.8 million in the fourth quarter of 2024 and favorably impacted sales by $2.8 million in the prior year quarter. 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 impacts of the recall reserves in both the current and prior year quarters, increased 7% to $555.4 million.

Sales and adjusted sales for the fourth quarter of 2024 and 2023 include $1.7 million and $6.5 million, respectively, of sales related to gift card redemptions in connection with recall remedies.

• Direct-to-consumer ("DTC") channel sales increased 7% to $368.6 million, compared to $344.9 million in the prior year quarter, due to growth in both Coolers & Equipment and Drinkware. Excluding the impacts related to the recall reserves, DTC channel adjusted sales increased 10% to $376.9 million.

• Wholesale channel sales increased 2% to $178.0 million, compared to $174.9 million in the same period last year, primarily due to growth in Coolers & Equipment. Excluding the impacts related to the recall reserves, wholesale channel adjusted sales increased 3% to $178.5 million.

• Drinkware sales increased 3% to $358.1 million, compared to $346.0 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 9% to $180.2 million, compared to $165.0 million in the same period last year, driven by strong performance in bags and hard coolers. Excluding the impacts of the recall reserves, Coolers & Equipment adjusted sales increased 17% to $189.0 million.

Net sales in the U.S. increased 1%, to $437.6 million, compared to $434.4 million in the prior year quarter. Excluding the impacts related to the recall reserves, adjusted net sales in the U.S. increased 4% to $446.4 million. International net sales increased 27%, to $108.9 million, compared to $85.4 million in the prior year quarter. Excluding the impacts related to the recall reserves, international adjusted net sales in the increased 27% to $108.9 million.

Gross profit increased 4% to $326.4 million, or 59.7% of sales, compared to $315.2 million, or 60.6% of sales, in the fourth quarter of 2023, resulting in a decline of 90 basis points to gross margin. The recall reserves unfavorably impacted gross profit by $8.1 million in the fourth quarter of 2024 and favorably impacted gross profit by $4.1 million in the prior year quarter, for a net unfavorable impact of 90 basis point to gross margin. Excluding the impact of the recall reserves, gross margin was flat as lower inbound freight costs and lower product costs were offset by higher customization costs and higher other costs.

Adjusted gross profit increased 8% to $334.5 million, or 60.2% of adjusted sales, compared to $311.1 million, or 60.2% of adjusted sales, in the fourth quarter of 2023.

Selling, general, and administrative ("SG&A") expenses increased 12% to $243.9 million, compared to $217.1 million in the fourth quarter of 2023. As a percentage of sales, SG&A expenses increased 280 basis points to 44.6% from 41.8% in the prior year period. Excluding the impacts of the recall reserves, SG&A expenses increased $24.2 million primarily due to higher employee costs and marketing expenses.

Adjusted SG&A expenses increased 7% to $223.9 million, compared to $208.5 million in the fourth quarter of 2023. As a percentage of adjusted sales, adjusted SG&A expenses were flat at 40.3% as distribution and fulfillment expenses leverage on higher sales was offset by higher employee costs and other expenses.

Operating income decreased 16% to $82.5 million, or 15.1% of sales, compared to $98.2 million, or 18.9% of sales during the prior year quarter.

Adjusted operating income increased 8% to $110.6 million, or 19.9% of adjusted sales, compared to $102.6 million, or 19.8% of adjusted sales during the same period last year.

Other expense of $13.5 million compared to other income of $4.2 million in the fourth quarter of 2023, primarily due to unrealized foreign currency losses related to intercompany balances.

Net income decreased 32% to $53.2 million, or 9.7% of sales, compared to $78.6 million, or 15.1% of sales in the prior year quarter; Net income per diluted share decreased 30% to $0.63, compared to $0.90 in the prior year quarter.

Adjusted net income increased 7% to $84.6 million, or 15.2% of adjusted sales, compared to $78.8 million, or 15.2% of adjusted sales in the prior year quarter; Adjusted net income per diluted share increased 11% to $1.00, compared to $0.90 per diluted share in the prior year quarter.

Full Year 2024 Results

Sales increased 10% to $1,829.9 million, compared to $1,658.7 million in the prior year. The recall reserves unfavorably impacted sales by $8.8 million in 2024 and $21.7 million in 2023. 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 impacts of the recall reserve adjustment in both the current and prior year, increased 9% to $1,838.7 million.

Sales and adjusted net sales for 2024 and 2023 include $8.8 million and $25.3 million, respectively, of sales related to gift card redemptions in connection with recall remedies.

• DTC channel sales increased 9% to $1,087.6 million, compared to $997.7 million in the prior year, due to growth in both Coolers & Equipment and Drinkware. Excluding the impact related to the recall reserves, DTC channel adjusted sales increased 9% to $1,095.9 million.

• Wholesale channel sales increased 12% to $742.3 million, compared to $661.0 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 10% to $742.8 million.

• Drinkware sales increased 7% to $1,094.2 million, compared to $1,023.0 million in the prior year, driven by the continued expansion and innovation of our Drinkware product offerings and new seasonal colorways.

• Coolers & Equipment sales increased 17% to $698.6 million, compared to $597.5 million in the same period last year, driven by strong performance in bags, soft coolers, and hard coolers. Excluding the impact related to the recall reserves, Coolers & Equipment adjusted sales increased 14% to $707.4 million.

Net sales in the U.S. increased 7%, to $1,490.5 million, compared to $1,398.9 million in the prior year. Excluding the impacts related to the recall reserves, adjusted net sales in the U.S. increased 6% to $1,499.3 million. International net sales increased 31%, to $339.4 million, compared to $259.8 million in the prior year. Excluding the impacts related to the recall reserves, international adjusted net sales in the increased 30% to $339.4 million.

Gross profit increased 13% to $1,063.3 million, or 58.1% of sales, compared to $943.2 million, or 56.9% of sales, in the prior year, resulting in an increase of 120 basis points to gross margin. The recall reserves unfavorably impacted gross profit by $8.1 million in 2024 and $13.3 million in 2023, for a net unfavorable impact of 20 basis point impact to gross margin. Excluding the impact of the recall reserves, gross margin increased 140 basis points due to lower inbound freight costs and lower product costs, partially offset by customization costs, purchase accounting inventory step-up amortization, and other costs.

Adjusted gross profit increased 13% to $1,076.9 million, or 58.6% of adjusted sales, compared to $956.5 million, or 56.9% of adjusted sales, in the prior year. The 170 basis point increase in adjusted gross margin was primarily due to lower inbound freight costs and lower product costs, partially offset by customization costs and other costs.

SG&A expenses increased 14% to $817.9 million, compared to $717.7 million in the prior year. As a percentage of sales, SG&A expenses increased 140 basis points to 44.7% from 43.3% in the prior year. Excluding the impact of the recall reserves, SG&A expenses increased $87.0 million primarily due to higher employee costs, higher marketing expenses, and higher distribution and fulfillment expenses on higher sales.

Adjusted SG&A expenses increased 11% to $767.6 million, compared to $693.7 million in the prior year. As a percentage of adjusted sales, adjusted SG&A expenses increased by 40 basis points to 41.7% from 41.3% in the prior year. This increase was primarily due to higher employee costs and higher marketing expenses, partially offset by distribution and fulfillment expenses leverage on higher sales.

Operating income increased 9% to $245.4 million, or 13.4% of sales, compared to $225.5 million, or 13.6% of sales during the prior year.

Adjusted operating income increased 18% to $309.4 million, or 16.8% of adjusted sales, compared to $262.8 million, or 15.6% of adjusted sales during the same period last year.

Other expense of $13.2 million compared to other income of $1.4 million in the prior year, primarily due to unrealized foreign currency losses related to intercompany balances.

Net income increased 3% to $175.7 million, or 9.6% of sales, compared to $169.9 million, or 10.2% of sales in the prior year; Net income per diluted share increased 6% to $2.05, compared to $1.94 in the prior year.

Adjusted net income increased 19% to $234.0 million, or 12.7% of adjusted sales, compared to $197.0 million, or 11.7% of adjusted sales in the prior year; Adjusted net income per diluted share increased 21% to $2.73, compared to $2.25 per diluted share in the prior year.

Balance Sheet and Other Highlights

Cash was $358.8 million, compared to $439.0 million at the end of Fiscal 2023. During Fiscal 2024, YETI spent $200 million on accelerated share repurchase agreements and completed the acquisitions of Mystery Ranch, Ltd., Butter Pat Industries, LLC, and the capabilities, technology, and intellectual property to develop a unique powered cooler platform.

Inventory decreased 8% to $310.1 million, compared to $337.2 million at the end of Fiscal 2023.

Total debt, excluding finance leases and unamortized deferred financing fees, was $78.0 million, compared to $82.3 million at the end of Fiscal 2023.

Fiscal 2025 Outlook

Mr. Reintjes concluded, "As we enter 2025, although we expect the near-term market, particularly in the U.S., to be pressured by many of the same forces we saw in the fourth quarter and much of 2024, our strategy remains the same, which will enable us to continue to deliver long-term growth. Along with our topline growth, we also expect adjusted operating margin expansion in 2025, while also delivering strong earnings growth. We do expect FX headwinds this year with our fast-growing international business, so we plan to provide insights as to the impact that FX is having on our results. In addition, after two years of excellent free cash flow generation, we expect to have another strong free cash flow year in 2025, giving us the potential to both drive future growth while continuing to return capital to our shareholders. Finally, and most importantly, we will focus on growing and strengthening the YETI brand around the globe."

For Fiscal 2025, a 53-week period, compared to a 52-week period in Fiscal 2024, YETI expects:

• Adjusted sales to increase between 5% and 7%, which reflects an FX headwind of approximately 100 basis points of growth;

• Adjusted operating income to increase between 5.5% and 7.5%, which reflects an FX headwind of approximately 350 basis points of growth;

• An effective tax rate of approximately 24.5% (compared to 24.5% in the prior year period);

• Adjusted net income per diluted share between $2.90 and $2.95, reflecting a 6% to 8% increase, and which reflects an FX headwind of approximately $0.10. This outlook does not assume any impact from potential future share repurchases;

• Diluted weighted average shares outstanding of approximately 84.3 million;

• Capital expenditures between $60 million and $70 million, primarily to support investments in technology, new product innovation, and our supply chain; and

• Free cash flow of approximately $200 million.

Product Recall Reserves

The results of Fiscal 2024 and 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. The reserve for the estimated expenses related to the product recalls was established in Fiscal 2022.

During the fourth quarter of 2024, we reevaluated the assumptions of our recall reserves in response to experiencing higher than anticipated consumer recall participation rates during the year, and as a result increased the estimated recall expense reserve by $9.9 million. The reserve for the estimated product recall expense was $12.1 million and $13.1 million as of December 28, 2024 and December 30, 2023, respectively.

We recorded the following impacts as a result of recall reserve adjustments. These impacts are excluded from our non-GAAP results:

Share Repurchase Program

In February 2024, our Board of Directors approved a share repurchase program of up to $300 million of YETI’s common stock (the "Share Repurchase Program"). During Fiscal 2024, we entered into two separate accelerated share repurchase agreements (the "ASR Agreements") with Goldman Sachs & Co. LLC to repurchase an aggregate $200 million of YETI’s common stock. The second accelerated share purchase agreement was entered into in November 2024 for $100 million, at which time we received an initial delivery of approximately 1.9 million shares of YETI’s common stock. In January 2025, the second accelerated share repurchase agreement was completed and we received approximately 0.5 million additional shares of YETI’s common stock. In total, pursuant to the ASR Agreements, we repurchased approximately 5.1 million shares of YETI’s common stock.

We announced today that our Board of Directors approved a $350 million increase to the Share Repurchase Program authorization. As of today, $450 million remained available under the Share Repurchase Program.

Intellectual Property Acquisition

During the fourth quarter of 2024, we acquired the capabilities, technology, and intellectual property to develop a unique powered cooler platform for $32.5 million.

Conference Call Details

A conference call to discuss the fourth quarter of 2024 financial results is scheduled for today, February 13, 2025, 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 February 27, 2025 by dialing 844-512-2921 (international callers, 412-317-6671). The accompanying access code for this call is 1154620.

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 gross margin, adjusted SG&A expenses, adjusted operating income, adjusted net income, adjusted net income per diluted share (which we also refer to as adjusted EPS), free cash flow as well as adjusted gross profit, 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 impacts of 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, new products, foreign exchange rates, consumer buying behavior, our long-term focus, and our ability to return capital to our shareholders, including those set forth in the quotes from YETI’s President and CEO, and the 2025 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, including our Annual Report on Form 10-K for the year ended December 28, 2024 to be filed 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.

* * * * *

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250213513350/en/

Contacts

Investor Relations Contact:
Maria Lycouris
Solebury Strategic Communications
Investor.relations@yeti.com

Media Contact:
YETI Holdings, Inc. Media Hotline
Media@yeti.com