Q4 2024 Earnings Summary
- YETI is confident in returning to growth in the U.S. Drinkware segment in the second half of 2025, driven by an exciting innovation roadmap and successful supply chain diversification efforts.
- Strong innovation pipeline with plans to continue product launches over the next 12 to 24 months, including expansion in the Bags category, tapping into a really, really large global bags and travel opportunity.
- Significant international growth potential, especially in Europe and Asia, where YETI is in the early stages of expansion and expects these markets to be growth drivers for years to come.
- YETI expects their U.S. Drinkware sales to be flat or down in the first half of 2025, indicating potential challenges in their core domestic market and slowing growth.
- Increased competition and promotional intensity in the U.S. Drinkware market may pressure YETI's margins and sales, as the company acknowledges a more crowded and promotional environment, particularly impacting their core products.
- Supply chain diversification efforts are impacting the timing of product innovation, potentially delaying new product launches and affecting sales growth. Shifting Drinkware production out of China is affecting their product roadmap pacing, with more innovation weighted towards the second half of 2025.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +5% | Total revenue increased to $546.6M in Q4 2024, up from $519.74M in Q4 2023. This moderate improvement follows a stronger Q3 2024 performance (+10% YoY), likely reflecting seasonal normalization and a balanced contribution from both DTC and wholesale channels, which had previously faced contrasts due to product recalls and restocking effects vs. |
Direct-to-Consumer Sales | +7% | DTC sales grew to $368.6M, compared to $344.81M in Q4 2023, driven by product innovations and ongoing channel expansion. This growth is consistent with earlier robust increases (14% in Q3 2023 and 8% in Q3 2024), showing effective execution despite previous challenges in product mix and operational shifts vs. |
Wholesale Revenue | +1.8% | Wholesale revenue rose modestly to $178M from $174.92M, reflecting cautious partner ordering and careful inventory positioning relative to seasonal product launches—in contrast to the significant declines seen in Q3 2023 and the rebound in Q3 2024 vs. |
Cooler & Equipment (DTC subsegment) | +9% | Sales in this subsegment increased to $180.2M, up from $164.99M, boosted by strong performance in hard coolers and innovative product introductions. This improvement builds on previous periods where recalls had hurt soft cooler sales, with subsequent recovery driven by new launches and seasonal adjustments vs. |
International Revenue | +27.5% | International revenue surged to $108.9M, compared to $85.43M, due to a robust international e-commerce strategy, selective wholesale expansion, and broad geographic diversification—a trend that was similarly impressive in Q3 2024 (where growth hit about 30% YoY) vs. |
Operating Income (EBIT) | -16% | Operating income declined to $82.5M from $98.2M, reflecting increased SG&A and promotional expenses along with higher variable costs. Despite improvements in gross profit and revenue growth in prior periods, the higher cost pressure (including the legacy of past channel mix shifts) impacted margins in Q4 2024 vs. |
Net Income | -24% | Net income dropped to $53.15M from $78.59M, indicating that the negative impact of increased operating expenses and lower operating leverage outweighed revenue gains. This decline contrasts with earlier improvements in gross profit and operating income seen in Q3 2024, but suggests that cost management and margin pressures escalated further in Q4 2024 vs. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Sales Growth | FY 2025 | 9% (FY 2024 guidance) | 5% to 7% | lowered |
Effective Tax Rate | FY 2025 | 24.8% | 24.5% | lowered |
Capital Expenditures | FY 2025 | $50 million | $60 million to $70 million | raised |
Free Cash Flow | FY 2025 | $150 million to $200 million | $200 million | raised |
Adjusted EPS | FY 2025 | $2.65 | $2.90 to $2.95 | raised |
Geographic Growth – Domestic | FY 2025 | mid-single-digit | mid-single-digit | no change |
Geographic Growth – International | FY 2025 | 30% | mid-teens | lowered |
SG&A Leverage | FY 2025 | no prior guidance | Approximately 10 basis points | no prior guidance |
Adjusted Operating Income Growth | FY 2025 | no prior guidance | 5.5% to 7.5% | no prior guidance |
FX Impact on Operating Income | FY 2025 | no prior guidance | 350 basis point headwind | no prior guidance |
EPS Impact from FX | FY 2025 | no prior guidance | $0.10 per share headwind | no prior guidance |
Share Repurchase Program | FY 2025 | no prior guidance | Increased by $350 million, total available $450 million | no prior guidance |
FX Headwind on Sales | FY 2025 | no prior guidance | Approximately 100 basis points | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
U.S. Drinkware Performance | Q1 emphasized robust growth driven by new products and customization. Q2 reported 6% growth with a broad product mix. Q3 highlighted solid performance with innovation serving as a growth catalyst. | Q4 discussed a slight year‐over‐year decline due to increased promotions and competitive intensity, while maintaining overall category strength | Recurring, but sentiment shifted to acknowledging market challenges and intensified competition in Q4 while still banking on diversification. |
Product Innovation | Q1 focused on expanding the portfolio with stackable and innovative drinkware products. Q2 highlighted advances in coolers, drinkware, cookware, and even plans for bags. Q3 reiterated innovation as a key catalyst with new launches in bar and tableware. | Q4 elaborated on launching 24 new products across multiple categories with a robust 2025 pipeline, emphasizing innovation-driven diversification | Consistently emphasized; sentiment remains positive with an accelerating pipeline and a strong forward-looking approach. |
Supply Chain Diversification | Q2 introduced efforts to shift drinkware production out of China with targets for 2024/2025. Q3 discussed progress with new facilities to help optimize costs and scale globally. (No mention in Q1.) | Q4 provided detailed progress – achieving 20% of global drinkware capacity outside China and noting impacts on 2025 innovation timelines | Now more prominently detailed; emerging from Q2 to Q4 with an optimistic tone but noting potential delays in product launches due to the transition. |
Expansion into Bags, Luggage, and Travel Categories | Q1 underlined the integration of Mystery Ranch capabilities to grow the bags portfolio. Q2 mentioned plans to expand into multiple bag segments covering everyday, outdoor, travel, and adventure. Q3 highlighted exciting new bag launches and long‐term opportunities. | Q4 showcased strong performance of existing bag lines (with sold‐out limited releases) and outlined aggressive plans for additional launches in 2025 | A steadily growing focus with continuously positive sentiment; increasingly viewed as a major growth driver for the future. |
International Growth and Expansion Opportunities | Q1 reported strong international sales growth with emphasis on Europe, Australia, and Canada. Q2 discussed robust revenue gains and laid out expansion plans in Asia, Europe, and Australia. Q3 emphasized record levels of international sales and market-specific strategies across regions. | Q4 highlighted exceptional growth in international markets, especially Europe, with plans to start commercial sales in Japan and strengthened wholesale channels | A consistent high-growth theme; sentiment remains very positive with strategic investments and regional tailoring to bolster long-term expansion. |
Gross Margin Dynamics | Q1 showed a significant 450 basis point improvement to 57.5% driven by lower costs. Q2 highlighted expectations for record-high margins supported by freight and product cost benefits. Q3 celebrated record highs at 58.5% despite some dilution from mix changes and price pressures. | Q4 maintained stable margins with 60.2% of sales, balancing lower inbound freight and product costs against higher customization expenses | Consistent improvement across periods; overall sentiment is positive, though there is cautious monitoring of cost pressures amid gains. |
Competitive Pressure and Consumer Price Sensitivity | Q1 acknowledged competitive pressures but emphasized having the best products and introduced lower-priced options. Q2 pointed to emerging competition from brands like Stanley and Ninja with strategic pricing adjustments. Q3 noted that while competition remained steady, consumers have become more discerning. | Q4 again highlighted heightened competition and promotional intensity in the U.S. market and stressed targeted promotions and a diversified product portfolio as defensive strategies | A recurring concern with evolving strategies; sentiment has grown more cautious as competitive pressures and consumer price sensitivity tighten, prompting more targeted marketing responses. |
Earnings Growth and Guidance | Q1 mentioned a cautiously optimistic outlook with prudently conservative planning amid uncertainties. Q2 reported raised full‐year guidance and confidence in earnings growth. Q3 communicated strong earnings growth with raised guidance. | Q4 did not explicitly discuss earnings growth deceleration, though guidance for 2025 indicated slower adjustments amidst FX and macro headwinds | Earlier periods had cautious optimism regarding guidance; in Q4 the focus shifted away from direct commentary on deceleration, suggesting that while earnings growth remains strong, near-term uncertainties are less front‐and‐center. |
Seasonal Impacts on Revenue | Not mentioned in Q1 or Q2; Q3 addressed a shortened holiday buying season affecting consumer behavior and planning | Q4 provided no specific commentary on seasonal impacts despite being a key period for holiday sales | A transient focus emerging in Q3 that was not carried forward into Q4, possibly as the seasonal period concluded, reducing its emphasis. |
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Drinkware Growth Outlook
Q: What is the U.S. Drinkware growth outlook for 2025?
A: Management expects U.S. Drinkware to be flat in the first half of 2025, down in Q1, but anticipates a return to growth in the second half due to a robust innovation lineup and supply chain diversification efforts. They remain confident in achieving mid-single-digit growth in the U.S. overall. -
Supply Chain Diversification and Tariff Impact
Q: How will tariffs and supply chain shifts affect costs?
A: The 10% tariff on Chinese goods could have less than a $10 million impact in 2025, which is not included in the outlook. Management views this as manageable and is mitigating through cost optimization and potential pricing actions. Supply chain diversification, including transitioning Drinkware production out of China, is impacting the timing of product launches but is a key focus in the first half of the year. -
Competitive Environment in Drinkware
Q: How is competition affecting the Drinkware category?
A: The company acknowledges elevated promotional pressures in Drinkware due to a consolidated assortment competing in a narrow market segment. They believe their diversified product offerings and innovation pace are resonating with consumers, serving as a defense against the competitive environment. They contemplate the competitive pressures in their guidance and do not plan significant changes to their promotional strategy. -
International Expansion Plans
Q: What are the international growth expectations?
A: Internationally, YETI expects mid-teens growth in 2025, with Europe being the fastest-growing region due to early-stage potential and significant market opportunity. Commercial sales in Japan will begin, but meaningful impact is expected in 2026. Management is enthusiastic about the long-term growth prospects in the U.K., Europe, and Asia. -
M&A Strategy and Acquisitions
Q: What is the approach to M&A and recent acquisitions?
A: YETI remains highly disciplined in M&A, focusing on acquiring technologies and know-how that accelerate their product roadmap. In Q4 2024, they acquired powered cooler technology and IP, which they are excited to integrate into their product lineup. This acquisition is not expected to contribute to 2025 sales but will enhance future offerings. -
Product Innovation and New Categories
Q: How is innovation pacing and new categories evolving?
A: The company saw an uptick in innovation in 2024 and plans to maintain that pace. They are expanding and bringing vitality to Drinkware, hard coolers, protective cases, GoBox, chairs, and Bags. Two new families of Bags are launching, one resulting from the MYSTERY RANCH acquisition, targeting the large global bags and travel market. -
Selling Channels Dynamics
Q: How are DTC and wholesale channels performing?
A: YETI has a balanced omnichannel approach, with strong performance in both DTC and wholesale. The diversification of channels provides efficiency in reaching consumers. They focus on getting YETI products in front of consumers wherever they choose to shop, adapting to changing consumer dynamics. No significant shift in long-term view on channel mix. -
Marketing Strategy and Spend
Q: Will higher product launch tempo require more advertising?
A: Management does not expect a significant increase in marketing spend. They are shifting some marketing efforts up the funnel to balance brand awareness and product marketing. The diverse channels, including DTC, Amazon, and corporate sales, offer cost-effective ways to reach consumers. They make micro adjustments within a thoughtful marketing budget. -
Channel Inventory and Sell-through
Q: How are demand trends and inventories tracking?
A: Sell-through growth was observed across all regions in 2024. In Q4, sell-in and sell-through were aligned in each category, with strong growth in Coolers & Equipment. Channel inventories are healthy heading into 2025, and management will continue to manage them throughout the year. -
53rd Week Impact
Q: What is the impact of the 53rd week in 2025?
A: The 53rd week in 2025 is expected to have a minimal impact, contributing less than 1% to total year growth. It is the lowest sales week of the year and slightly dilutive to operating income. Therefore, it does not significantly affect first half or second half dynamics.
Research analysts covering YETI Holdings.