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Jul 01, 2023
YETI Q2 2023 Earnings Report
YETI's Q2 2023 results reflected a decrease in sales, but adjusted sales increased due to strong demand and innovation, with gross margin expansion and updated full-year outlook.
Key Takeaways
YETI's second quarter results showed a decrease in sales by 4% to $402.6 million, but adjusted sales increased by 2% to $427.1 million. The company's gross margin continued to expand, and they raised the low end of their full-year adjusted net sales outlook range and increased the full-year adjusted EPS outlook.
Sales decreased 4% to $402.6 million, but adjusted sales increased 2% to $427.1 million.
Direct-to-consumer channel sales increased 1% to $226.4 million.
Drinkware sales increased 8% to $233.4 million.
Gross profit decreased 2% to $214.8 million, but adjusted gross profit increased to $234.3 million.
YETI
YETI
YETI Revenue by Segment
Revenue by Segment
Direct-to-Consumer Revenue
CapyFin.comWholesale Revenue
CapyFin.comDrinkware Revenue
CapyFin.comCoolers & Equipment Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
YETI narrowed its full-year sales outlook to the higher end of its prior range, inclusive of the favorable impact of recall-related gift card redemptions. Gross margin outlook increased, supporting an increase in the bottom-line outlook.
Positive Outlook
- Adjusted sales to increase between 4% and 5%.
- Adjusted sales growth weighted to the second half of the year.
- Expected adjusted sales are inclusive of an approximate 500 basis points unfavorable impact on our growth rate from the stop sale of the products affected by the recalls.
- Expected adjusted sales also include $12.5 million of sales from recall-related gift card redemptions in the second quarter of 2023.
- Adjusted operating income as a percentage of adjusted sales between 15.5% and 16.0%.
Challenges Ahead
- Effective tax rate of approximately 25.1%.
- Adjusted net income per diluted share between $2.23 and $2.32, reflecting a 2% to 6% decrease, with earnings growth beginning in the fourth quarter of the year.
- Diluted weighted average shares outstanding of approximately 87.3 million.
- Capital expenditures of approximately $60 million primarily to support investments in technology and new product innovation and launches.
- The benefit from the adjusted gross margin expansion is expected to be more than offset by the deleverage from increases in adjusted SG&A expenses due to strategic investments and the unfavorable topline impact from the stop sale of the products affected by the recalls.
Revenue & Expenses
Visualization of income flow from segment revenue to net income