Yeti Holdings posted second-quarter sales and earnings gains with help from what the company reported as strong retail sell-through of its expanded drinkware program.
The company posted net income of $50.4 million, 59 cents per diluted share, versus $38.1 million, or 44 cents per diluted share, in the year-before quarter. Adjusted net income was $59.6 million, or 70 cents per diluted share, the company noted versus $49.8 million, or 57 cents per diluted share, in the previous-year period.
A Zacks Investment Research analyst consensus estimate had adjusted diluted earnings per share at 64 cents. Revenues beat a Zacks estimate by $1.49%.
Net sales gained 15% to $463.5 million from the year-prior quarter. Recall reserves unfavorably impacted sales by $24.5 million versus the year-past period. Adjusted sales, which exclude the unfavorable impact of the recall reserve adjustment in the 2023 quarter, advanced 9% to $463.5 million.
Operating income increased 34% to $67.4 million in the quarter year over year while adjusted operating income increased 19% to $80 million.
Yeti broke out second-quarter, year-over-year sales by business segment:
Direct to consumer channel sales increased 11% to $250.4 million based on growth in both Coolers & Equipment and Drinkware categories, with adjusted sales increasing 7% to $250.4 million.
Wholesale channel sales increased 21% to $213.1 million due to growth in Coolers & Equipment and Drinkware, with adjusted sales up 11% to $213.1 million.
Drinkware sales increased 6% to $246.5 million driven by the continued expansion and innovation of Drinkware product offerings and new seasonal colorways.
Coolers & Equipment sales increased 31% to $205.9 million, driven by strong performance in soft coolers and bags with adjusted sales increased 14% to $205.9 million.
In announcing the financial results, Matt Reintjes, Yeti president and CEO, said, “Yeti delivered another great quarter, highlighted by our Coolers & Equipment category and continued growth of our business outside the United States. Supported by a strong lineup of new innovation, we were well positioned to capitalize on cooler demand, which we saw steadily build throughout the quarter. Additionally, our Drinkware category performance was punctuated by strong sell-through in the Wholesale channel and the continued successful expansion and broadening of our product portfolio. This product portfolio, combined with our uniquely relevant brand across broad communities of users, not only supported our domestic growth but also drove a third consecutive quarter of over 30% growth in our international business. Finally, we continued to realize excellent gross margin expansion, which enabled us to deliver operating margin improvement while continuing to invest across our strategic priorities.”
Reintjes added that the Yeti brand “continues to build from a place of strength and has great momentum heading into the second half of the year. We continue to stoke brand engagement, executing on our breadth and depth strategy across our expansive range of communities, events, and partnerships. From a product standpoint, we are focused on driving awareness around our recent launches while also delivering new innovation in the second half of the year, including our first formal entry into the premium cookware market. From an execution standpoint, we are building the foundation needed to support our future growth on a global basis, including making progress towards broadening our global supply footprint.”
