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YETI Holdings, Inc. (YETI)·Q3 2026 Earnings Summary

Executive Summary

  • Net sales rose 2% year over year to $487.8M, driven by 12% growth in Coolers & Equipment and 14% international growth; US sales declined 1% .
  • Gross margin compressed 210 bps to 55.9% primarily from a 320 bps unfavorable tariff impact and lower Drinkware mix; adjusted gross margin fell 230 bps to 55.9% .
  • Adjusted EPS was $0.61, above Wall Street consensus $0.584*, and revenue beat consensus $480.3M* with actual $487.8M; GAAP diluted EPS was $0.48 vs $0.66 last year .
  • FY25 guidance was tightened/raised on EPS ($2.38–$2.49 vs $2.34–$2.48 prior) and FCF (~$200M vs $150–$200M prior); share repurchase target increased from $200M to $300M for 2025 .
  • Management highlighted strong US wholesale sell-through and accelerating international momentum; near-term stock catalysts include Q4 Drinkware inflection and Investor Day in H1 2026 .

Values retrieved from S&P Global for estimates marked with an asterisk.

What Went Well and What Went Wrong

What Went Well

  • Double-digit Coolers & Equipment growth (+12% to $215.4M) and category breadth (soft coolers, bags) underpinning topline resilience .
  • International momentum (+14% to $100.4M) with notable strength in Europe and Australia; Japan ramped following Q2 launch .
  • Strong US wholesale sell-through in both Drinkware and Coolers & Equipment despite cautious ordering; management cites robust end-consumer demand .
  • Capital allocation: 4.3M shares repurchased for $149.9M in Q3; 2025 buyback target raised to $300M, totaling ~$500M over 2024–2025 and reducing shares outstanding by ~14% over two years .
  • Strategic supply chain diversification progressing; by year-end, less than 5% of COGS expected to be exposed to US tariffs on China-sourced goods .

Selected quotes:

  • “We observed double-digit sell-through growth in the U.S. for both C&E and Drinkware... positions us well for the future” .
  • “We continue to expect that by year end... less than 5% of our total cost of goods sold will be exposed to U.S. tariffs on goods sourced from China” .

What Went Wrong

  • Margin pressure from tariffs: gross margin down 210 bps (adjusted -230 bps) with a 320 bps unfavorable tariff impact; adjusted EPS -14% YoY to $0.61 .
  • Drinkware declined 4% to $263.8M, impacted by a promotional US market and inventory constraints during the supply chain transition .
  • US sales -1% to $387.3M; DTC conversion remained pressured on Yeti.com despite traffic and AOV growth .
  • SG&A deleverage: SG&A +5% to $218.2M (44.7% of sales), reflecting tech/facilities investments, stock-based comp, depreciation, and impairments .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$351.1 $445.9 $487.8
Diluted EPS ($)$0.20 $0.61 $0.48
Adjusted EPS ($)$0.31 $0.66 $0.61
Gross Margin (%)57.4% 57.8% 55.9%
Adjusted Gross Margin (%)57.3% 57.8% 55.9%
Operating Margin (%)6.2% 13.9% 11.1%
Adjusted Operating Margin (%)10.0% 16.4% 13.7%

Year over Year (Q3 2024 vs Q3 2025)

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$478.4 $487.8
Diluted EPS ($)$0.66 $0.48
Adjusted EPS ($)$0.71 $0.61
Gross Margin (%)58.0% 55.9%
Adjusted Gross Margin (%)58.2% 55.9%
Operating Margin (%)14.6% 11.1%
Adjusted Operating Margin (%)16.6% 13.7%

Segment and Channel Breakdown (Q3 2025)

Category/Channel/RegionQ3 2025 ($USD Millions)Q3 2024 ($USD Millions)
Drinkware$263.8 $275.0
Coolers & Equipment$215.4 $192.6
Other$8.6 $10.9
Direct-to-Consumer$288.7 $280.8
Wholesale$199.0 $197.6
United States$387.3 $390.2
International$100.4 $88.3

KPIs and Balance Sheet

KPIQ3 2025Q3 2024
Cash ($USD Millions)$164.5 $280.5
Total Debt ($USD Millions)$74.9 $79.1
Inventory ($USD Millions)$324.0 $370.2
Free Cash Flow YTD ($USD Millions)$50.1 $4.5

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
Adjusted Sales GrowthFY 2025 (53 weeks)Flat to +2% +1% to +2% Maintained/Narrowed high end
Adjusted Operating Margin (% of Adjusted Sales)FY 202514.0%–14.5% 14.0%–14.5% Maintained
Effective Tax RateFY 2025~25.5% ~25.5% Maintained
Adjusted EPS ($)FY 2025$2.34–$2.48 $2.38–$2.49 Raised
Diluted Weighted Avg Shares (M)FY 2025~82.0 ~81.5 Lowered (buybacks)
Capital Expenditures ($M)FY 2025~50 ~50 Maintained
Free Cash Flow ($M)FY 2025$150–$200 ~$200 Raised (to high end)
Share Repurchases ($M)FY 2025~$200 ~$300 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Supply chain diversificationAccelerating drinkware shift; <5% COGS from China on go-forward; inventory tight, safety stock reduction Progress; raised EPS outlook partly on tariff mix, capex rebalanced “By year-end... less than 5% of COGS exposed to US tariffs on China”; multi-country sourcing fully operational Improving resilience
Tariffs/macroFY25 margin impact ~450 bps gross; ~$100M gross tariffs (90% China) Tariff rate dynamics; EPS raised; net $0.07 Q2 impact Q3 EPS included $0.14 net tariff impact; FY net ~230 bps OI impact Persistent headwind; mitigation ongoing
Product innovation~30 launches in 2025; bags/coolers momentum; cadence to increase Continued breadth; Helimix shaker IP acquisition Strong C&E; Silo Jug; shaker bottle launching; customization expansion Accelerating
International expansionStrong Europe/Australia/Canada; Japan foundation Europe/Japan growth despite partner caution International +14%; >270 Japan doors, >400 by YE; UK/Europe momentum Accelerating
AI/technology initiativesNoted AI focus emerging Tech investments driving SG&A; no specific AI detail Detailed AI programs (GenAI customization, Ranger assistant, ROAS modeling) Scaling implementation
Channels (DTC/Wholesale)Amazon strong; Yeti.com conversion softer; corporate sales strength DTC -1%; wholesale -7% (Q2); Amazon strong DTC +3%, wholesale +1%; US sell-through robust, cautious sell-in Sell-through strength; conversion improving initiatives

Management Commentary

  • “Our third quarter results continue to show the strength of YETI... compounding effect of our innovation engine... expanding international reach” — Matt Reintjes, CEO .
  • “We continue to expect that by year end... less than 5% of our total cost of goods sold will be exposed to U.S. tariffs on goods sourced from China... our multi country sourcing strategy will be fully operational” .
  • “Our wholesale channel demonstrated very strong momentum despite... cautious ordering... Sell through trends remain strong” .
  • “We are upsizing our 2025 [share repurchase] plan from $200 million to now targeting $300 million by year end… approximately 14% of our shares outstanding [over 2024–2025]” .
  • “Adjusted net income per share decreased 14% to $0.61 per share… includes a $0.14 net impact from incremental costs associated with tariffs announced in 2025” — Mike McMullen, CFO .

Q&A Highlights

  • Long-term growth algorithm: High-single to low-double-digit topline over time, built on innovation, brand reach, and global expansion .
  • Wholesale dynamics: US sell-through is very strong; sell-in more cautious amid drinkware destocking; inventories being worked down into 2026 .
  • Drinkware outlook: Return to growth expected in Q4 aided by innovation and international growth; US promotional intensity persists but stabilization expected .
  • Tariffs trajectory: 2025 net EPS hit ~$0.40; diversification provides ability to optimize sourcing by tariff regime; some countries carry no tariffs .
  • International acceleration: Q4 step-up consistent with prior levels; strong UK/Europe momentum; Japan scaling to 400+ stores by YE .

Estimates Context

MetricConsensusActual
Primary EPS (Normalized)$0.584*$0.61
Revenue ($USD Millions)$480.3*$487.8
EPS Estimates Count16*—
Revenue Estimates Count15*—

Values retrieved from S&P Global.
Note: S&P “Primary EPS” reflects normalized/adjusted EPS; management reported GAAP diluted EPS of $0.48 .

Key Takeaways for Investors

  • Mix shift and tariffs are the primary margin headwinds; expect continued mitigation via multi-country sourcing, selective pricing, and cost offsets, with structural tariff exposure to China <5% of COGS post-2025 .
  • Core growth pillars (C&E strength, international scaling) remain intact; C&E growth (+12%) and international (+14%) offset US softness in Drinkware .
  • Near-term upside catalysts: Q4 Drinkware inflection, holiday execution (Amazon, Gear Garage), and increased buybacks lowering share count (~81.5M FY) .
  • FY25 EPS raised and FCF increased to ~$200M, supporting further buybacks and strategic innovation investments (e.g., shaker bottle, customization) .
  • Watch DTC conversion improvements and wholesale inventory normalization; strong sell-through suggests healthier underlying demand vs cautious sell-in .
  • AI initiatives (customization, conversational shopping, marketing analytics) may enhance conversion and margin over time, differentiating the brand digitally .
  • Execution focus: Maintain attention on tariff policy developments and supply chain ramp timing; management indicates limited 2025 benefit from recent China tariff rate reduction due to timing .