Executive Summary

Q1 2025 delivered modest top-line growth and an estimates beat: net sales rose 3% to $351.1M against S&P Global consensus of $347.5M, and adjusted EPS of $0.31 topped $0.269; GAAP EPS was $0.20. Strength in Coolers & Equipment and international offset U.S. Drinkware softness, while FX was a headwind (~100 bps to sales; ~$0.02 to EPS) . Estimates: EPS $0.269, revenue $347.520M; actual EPS $0.31, revenue $351.128M (S&P Global)*
YETI sharply reduced FY25 guidance following April tariff actions and accelerated supply-chain diversification, now guiding adjusted sales +1–4% (from +5–7%) and adjusted EPS $1.96–$2.02 (from $2.90–$2.95); assumes a 145% total tariff on China-sourced products and 10% reciprocal on others, with ~$100M gross tariff impact before mitigation .
Management is prioritizing rapid Drinkware sourcing shifts out of China—targeting <5% of COGS exposure for U.S. market by year-end 2025—accepting near-term innovation delays and supply constraints to strengthen the 2026 setup .
Key stock narrative: Q1 beat overshadowed by tariff-driven FY25 reset; catalysts include proof points on supply-chain relocation pace, Drinkware innovation cadence resuming in 2H, and durability of international growth (Japan launch in Q2) .

What Went Well and What Went Wrong

What Went Well
- Coolers & Equipment momentum continued: category sales +17% to $140.2M, with strength in bags and hard coolers; DTC +4% and wholesale +1% overall .
- International growth robust at +22% to $79.9M despite ~500 bps FX headwind; Europe, Australia DTC/custom, and Canada showed broad-based strength .
- CEO emphasized strategic progress: “accelerating the pace of product innovation, materially transforming our supply chain, [and] minimizing exposure to China,” targeting <5% of U.S. COGS from China by end-2025 .
What Went Wrong
- U.S. Drinkware declined 4% to $205.6M amid a challenging U.S. category reset and choice to prioritize supply-chain diversification over new innovation in the quarter; U.S. region sales -2% .
- Adjusted operating margin compressed to 10.0% (from 11.6% YoY) and adjusted EPS fell 9% to $0.31, with ~600 bps growth headwind from FX .
- FY25 outlook cut meaningfully due to tariff costs and inventory supply disruption from accelerated sourcing shifts (approx. 300 bps impact to sales growth; ~450 bps tariff impact to gross margin assumptions) .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$478.4	$546.5	$351.1
Adjusted EPS ($)	$0.71	$1.00	$0.31
GAAP EPS ($)	$0.66	$0.63	$0.20
Gross Margin % (GAAP)	58.0%	59.7%	57.4%
Gross Margin % (Adj)	58.2%	60.2%	57.3%
Operating Margin % (GAAP)	14.6%	15.1%	6.2%
Operating Margin % (Adj)	16.6%	19.9%	10.0%
Net Income Margin % (GAAP)	11.8%	9.7%	4.7%
Net Income Margin % (Adj)	12.6%	15.2%	7.3%

Q1 vs S&P Global consensus:

Revenue: $351.128M vs $347.520M estimate (beat)*
Adjusted EPS: $0.31 vs $0.269 estimate (beat)*
EPS estimate count: 14; Revenue estimate count: 13*

Segment/Channel/Geography (Q1 2025 vs Q1 2024)

Segment	Q1 2024 ($M)	Q1 2025 ($M)	YoY %
Drinkware	$214.6	$205.6	-4%
Coolers & Equipment	$119.9	$140.2	+17%
Other	$6.9	$5.3	-23%

Channel	Q1 2024 ($M)	Q1 2025 ($M)	YoY %
Direct-to-Consumer	$187.8	$196.2	+4%
Wholesale	$153.6	$154.9	+1%

Geography	Q1 2024 ($M)	Q1 2025 ($M)	YoY %
United States	$275.8	$271.3	-2%
International	$65.6	$79.9	+22% (incl. ~500 bps FX headwind)

KPIs

KPI	Q1 2024	Q1 2025
Cash & Equivalents ($M)	$173.9	$259.0
Inventory ($M)	$363.9	$330.5
Total Debt ($M)	$81.2	$77.0
Free Cash Flow ($M)	$(114.3)	$(89.2)

Notes: Q1 sales growth +3% included ~100 bps FX headwind; adjusted EPS faced ~~600 bps growth headwind from FX (~~$0.02) .

Guidance Changes

Metric	Period	Previous Guidance (2/13/25)	Current Guidance (5/8/25)	Change
Adjusted Sales Growth	FY 2025 (53 wks)	+5% to +7%	+1% to +4%	Lowered
Adjusted Operating Income Margin (on adjusted sales)	FY 2025	~16.9%	~12.0%	Lowered (~450 bps tariff impact)
Effective Tax Rate	FY 2025	~24.5%	~26.0%	Raised
Adjusted EPS	FY 2025	$2.90–$2.95	$1.96–$2.02	Lowered
Diluted Weighted Avg Shares (M)	FY 2025	~84.3	~83.7	Slightly lower
CapEx ($M)	FY 2025	$60–$70	~$60	Tightened lower end
Free Cash Flow ($M)	FY 2025	~$200	$100–$125	Lowered

Tariff/assumptions embedded: 145% total tariff rate on China-sourced products; 10% reciprocal tariff on other countries “where applicable”; ~$100M gross tariff impact in FY25 before mitigation (pricing, supplier cost offsets) .

Earnings Call Themes & Trends

Topic	Q3 2024 (Q-2)	Q4 2024 (Q-1)	Q1 2025 (Current)	Trend
Supply chain diversification	“Production commencing at second drinkware facility outside China”	FY25 guide (pre-tariffs) envisioned adj. margin expansion; diversification ongoing	Accelerating shifts; halted China production >3 weeks in early Q2; targeting <5% U.S. COGS from China by end-2025	Acceleration with near-term disruption
Tariffs/macro	Not a major driver cited; strong international growth	FY25 outlook assumed FX headwinds; no new tariffs assumed	Major headwind: assume 145% China, 10% others; ~$100M gross impact; choppy demand risk; FY guide cut	Deteriorated
Product innovation cadence	New launches across bar/tableware, cookware; demand strong	FY25 plan: continued innovation	~30 new products in 2025 but some launches delayed or ex-U.S.-only due to supply constraints	Cadence intact but constrained near term
Drinkware category dynamics	+9% YoY in Q3	+3% in Q4	-4% in Q1; U.S. category reset; international growth positive	U.S. softer; expected 2H improvement
International expansion	+30% in Q3; Europe strong	+27% in Q4	+22% in Q1; Japan shipments begin in Q2	Strong, broad-based
Pricing/mitigation	Not emphasized	Not emphasized	Pricing targeted/durable; primary mitigation is sourcing shift; supplier cost offsets	Cautious, strategic
Inventory/capex discipline	Building into holiday; balanced	FY25 FCF ~$200M pre-tariffs; capex $60–$70M	Lower capex (~$60M), FCF $100–$125M; inventory down YoY planned	Preserving cash, reducing risk

Management Commentary

“A strong start to 2025 showcased our growing global brand and broadening product portfolio… We exited the first quarter on our full year plan before the significant tariff disruption announced in April.” – CEO Matt Reintjes .
“We now expect 90% of our U.S. Drinkware capacity to be ex-China by the end of the year… going forward, less than 5% of our total cost of goods will be related to products from China for the U.S. market.” – CEO Matt Reintjes .
“Collectively, the gross amount of tariffs that are included in this outlook is approximately $100 million… approximately 90% of that is China.” – CFO Mike McMullen .
“We expect total sales to be flat to slightly down year-over-year in Q2… U.S. Drinkware due to both the supply disruptions… and continuation of the softer market dynamics that we have seen in the last 2 quarters.” – CFO Mike McMullen .

Q&A Highlights

Innovation cadence: ~30 new products in 2025 vs 2024, with cadence to continue into 2026+, though some launches shifted or ex-U.S.-only due to supply constraints .
Tariff math: ~$100M gross FY25 tariff headwind (starts in Q2, builds in H2), ~90% attributable to China given 145% assumed rate; 10% assumed for applicable non-China .
Drinkware outlook: Underperformance tied to U.S. category reset; diversified portfolio strategy emphasized (hydration, coffee/tea/barware); wholesale partners supportive of roadmap .
Pricing approach: Targeted and durable; main mitigation is sourcing shift and supplier offsets; avoid transitory pricing moves given expected 2026 supply chain positioning .
Inventory allocation: Multi-layer allocation by availability and demand; some innovations launched ex-U.S. first; aim to run tighter safety stocks and reduce China exposure to strengthen 2026 setup .

Estimates Context

Q1 2025 results vs S&P Global consensus: Adjusted EPS $0.31 vs $0.269 (beat); revenue $351.128M vs $347.520M (beat). Estimate counts: EPS (14); revenue (13). Management flagged FX headwind (~$0.02 EPS; ~600 bps EPS growth impact) . Values retrieved from S&P Global*
Implications: Despite a clean beat, Street models likely move lower on FY25 given tariff assumptions (~450 bps GM impact) and supply-related sales growth headwinds (~300 bps), with 2H weighted reacceleration tied to innovation and supply normalization .

Key Takeaways for Investors

Q1 demonstrated core brand strength (C&E, international) and expense discipline, but U.S. Drinkware softness and FX weighed on growth; estimates were beaten on both top- and bottom-line .*
The FY25 reset is primarily exogenous (tariffs) and transitional (sourcing shifts); management’s plan targets <5% U.S. COGS from China by end-2025, setting a cleaner 2026 margin and growth setup .
Near-term risk skew is to H1 (Q2 flat-to-down guided) as supply constraints and tariff costs phase in; watch cadence of ex-China capacity ramps and resumed Drinkware innovation in 2H .
International remains a structural growth pillar (consistent 20%+ growth; Japan launch in Q2), partially diversifying U.S. category risk .
Profitability: adjusted operating margin guided to ~12% (from ~16.9%), driven by tariffs net of pricing and supplier offsets; monitor pace and magnitude of mitigation and any tariff policy changes .
Cash discipline remains intact: FY25 FCF still $100–$125M; capex focused on supply chain and innovation; inventory planned down YoY .
Watch items: tariff trajectory and reciprocity timelines, Drinkware category normalization in U.S., supplier cost-sharing, and execution on <5% China exposure by year-end 2025 .

Footnote: *Values retrieved from S&P Global (Primary EPS Consensus Mean, Revenue Consensus Mean, estimate counts, and actuals as reported in S&P Global).

YETI Holdings, Inc. (YETI)·Q1 2025 Earnings Summary