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Dec 31, 2022
YETI Q4 2022 Earnings Report
YETI's Q4 2022 results were impacted by voluntary recalls, but adjusted sales increased by 10% driven by DTC channel and international business growth.
Key Takeaways
YETI Holdings reported a 1% increase in net sales for Q4 2022, which includes an unfavorable impact from voluntary recalls. Adjusted sales, excluding the impact of these recalls, increased by 10%. The direct-to-consumer channel showed strong growth, while the wholesale channel was impacted by later-than-planned consumer demand. Gross profit and operating income were negatively affected by the recalls, but adjusted figures showed a smaller decrease.
Sales increased 1% to $448.0 million, including a $38.4 million unfavorable impact from voluntary recalls; adjusted sales increased 10% to $486.4 million.
Direct-to-consumer (DTC) channel sales increased 17% to $309.5 million, with adjusted DTC sales up 20% excluding recall impacts.
Gross profit decreased 34% to $167.0 million, or 37.3% of sales, including a $97.0 million unfavorable impact from recalls.
Net loss was $27.7 million, or 6.2% of sales, compared to net income of $72.9 million in the prior year quarter, impacted by the voluntary recalls.
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 expects adjusted sales to increase between 3% and 5% in fiscal year 2023. Adjusted operating income as a percentage of adjusted sales is expected to be between 15% and 15.5%, with adjusted operating income decreasing between 3% and 8%. Adjusted net income per diluted share is projected to be between $2.12 and $2.23, reflecting a 5% to 10% decrease.
Positive Outlook
- DTC and international businesses are expected to continue delivering strong results.
- Positive sell-through is expected to continue at wholesale.
- Gross margin tailwinds are expected to ramp throughout the year as lower freight costs work through inventory.
- Strong margin expansion and bottom-line growth are expected in the fourth quarter.
- The company anticipates to maintain its long-term growth aspirations.
Challenges Ahead
- Wholesale order flow is expected to be cautious during the first half of the year.
- An estimated 500 basis point unfavorable impact is expected from the stop sale on products impacted by the proposed voluntary recalls.
- Limited sales growth is expected throughout the first three quarters of the year.
- Operating expenses are expected to increase as a percentage of sales to support international and DTC businesses.
- Adjusted operating income is expected to decrease between 3% and 8%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income