Yeti sold a lot of coolers, despite all the talk of a price-sensitive consumer

By Tomi Kilgore

Yeti's stock jumps after an earnings beat and raised outlook, as coolers and equipment sales soared 31%

Shares of Yeti Holdings Inc. soared Thursday toward their best day in a year, after the outdoor-products and drinkware maker reported second-quarter earnings that rose above expectations, boosted by the biggest jump in cooler sales in more than three years.

Chief Executive Matt Reintjes said the strong quarterly results - along with confidence in the company's ability to continue to perform in the second half of the year, despite an uncertain economic environment - led to the increase in full-year earnings guidance.

"Overall, despite some of the persistent narrative in the market around higher ticket spending, we saw our cooler category performance build throughout the quarter and ultimately exceed our expectations, which we believe will set us up well for the back half of the year," Reintjes said, according to a FactSet transcript of the post-earnings call with analysts.

The stock (YETI) ran up 12.9% in morning trading, toward its biggest gain since it rocketed 17.3% on Aug. 10, 2023.

Jefferies analyst Randal Konik reiterated his buy rating on the stock, as he cheered the second-straight quarter that results beat expectations and the outlook was raised.

"Shares are cheap, we'd chase [them] higher given [the] all clear signal here," Konik wrote in a note to clients.

Net income rose to $50.4 million, or 59 cents a share, from $38.1 million, or 44 cents a share, in the same period a year ago.

Excluding nonrecurring items, adjusted earnings per share of 70 cents beat the FactSet consensus of 64 cents.

Gross profit improved to 57.7% of sales from 54.9% a year ago as lower inbound freight and product costs offset some price decreases on certain hard coolers.

Sales grew 15.1% to $463.5 million, above the FactSet consensus of $452.4 million.

Coolers and equipment sales jumped 31.5% to a record $205.9 million, beating the FactSet consensus of $192.4 million, amid strength in soft coolers and bags. That was the biggest year-over-year increase for the category's sales since it soared 57% during the first quarter of 2021.

The strong results come as the recall of nearly 2 million soft coolers and gear cases disclosed more than a year ago still impacted results. The company said recall reserve adjustments reduced sales for the quarter by $24.5 million.

For Yeti's flagship drinkware products, sales rose 5.6% to $246.5 million, topping expectations of $245.6 million, helped by demand for new products, such as stackable tumblers and straw mugs.

Looking ahead, the company raised its 2024 guidance range for adjusted EPS to between $2.61 and $2.65 from between $2.49 and $2.62, with the new outlook now above the current FactSet consensus of $2.58.

The company also increased its full-year outlook for gross profit as a percent of sales to 58.5% from 58.0%.

Yeti's stock has rallied 20.1% over the past three months, but has still dropped 19.3% year to date. The S&P 500 index SPX has edged up 1.7% in the past three months and 10.6% this year.

-Tomi Kilgore

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08-08-24 1029ET

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