YETI Holdings, Inc. Q4 FY2024 earnings call

• Brand: Strong brand loyalty with 95% of YETI owners recommending the brand for 7 consecutive years. Participated in over 200 consumer events globally, had ~200 global ambassadors, and secured meaningful partnerships.
• Product Innovation: Delivered 24 new product launches in 2024, including in Drinkware, Coolers & Equipment, and bags. Acquired IP for a powered cooler system, which is complementary to the hard cooler portfolio.
• Omnichannel Strategy: DTC sales grew 10% in Q4, wholesale sales increased 3% in Q4. Retail stores reached 24 by the end of 2024.
• International Growth: International business saw excellent growth, with regions like Australia and Europe continuing double-digit growth. International sales reached 18% of total sales in 2024.
• Supply Chain Diversification: Achieved 20% of global Drinkware capacity outside China by end 2024 and expects 80% of U.S. Drinkware capacity outside China by end 2025.
• Acquisitions: Acquired Mystery Ranch, Butter Pat, and IP for a powered cooler system, enabling innovation like cast iron cookware and powered cooler development.

In the fourth quarter, Coolers & Equipment sales increased 17% to $189 million. For the full year, Coolers & Equipment sales grew 14% to $707 million. Drinkware sales in Q4 grew 3% to $358 million, and for the full year, Drinkware sales grew 7% to approximately $1.1 billion. International sales saw strong growth, with Q4 international sales up 27% to $109 million and full year international sales up 30% to $339 million, representing 18% of total sales.

Expect full year sales growth of 5-7% with ~100 basis points FX headwind. Coolers & Equipment to outpace Drinkware growth. Adjusted operating income expected to grow 5.5-7.5%. Adjusted EPS expected to increase 6-8% to $2.90-$2.95. Capital expenditures to be $60-70 million, free cash flow ~$200 million. Board increased share repurchase authorization to $450 million.

• Tariffs: Potential impact from China tariffs, estimated to have less than $10 million impact, managed through cost optimization and price adjustments.
• Competitive Promotional Environment: Intense competition and promotions in the U.S. market, which could impact performance.
• FX Headwinds: Impact on operating income and EPS due to foreign exchange fluctuations.

Q: Peter Benedict asked about tariffs and supply chain diversification.

A: Tariff impact is manageable, less than $10 million impact, focus on cost optimization and price adjustments. Regarding supply chain, ahead of plan in diversifying Drinkware out of China.

Q: Brooke Roach inquired about U.S. growth and Drinkware dynamics.

A: U.S. Drinkware flat in first half, expected to return to growth in second half due to innovation pacing and better compares.

Q: Megan Clapp questioned about the 53rd week and Drinkware competition.

A: 53rd week has minimal impact, diversification of Drinkware is working against competitive environment.

Q: Randal Konik asked about innovation and international growth.

A: Innovation pacing consistent, international growth in mid-teens, focus on Europe and Japan for future growth.

Q: Peter Keith asked about marketing and wholesale expansion.

A: Micro adjustments in marketing, focusing on mid-funnel and brand halo. Wholesale growth from sell-through and assortment expansion, focusing on matching consumer shopping occasions.

Q: Martin Mitela inquired about wholesale growth.

A: Wholesale growth from a combination of sell-through growth and assortment expansion, focusing on calibrating wholesale partnerships to intercept consumers in relevant shopping occasions.