YETI (YETI) Q2 2025 earnings summary

Executive summary

• Q2 2025 net sales declined 4% to $445.9M, driven by a promotional U.S. Drinkware market, cautious consumer and retail partner behavior, and supply chain transition constraints.

• Drinkware sales fell 4% to $236.4M, Coolers & Equipment declined 3% to $200.6M, while bags and packs outperformed, led by the viral Camino tote.

• DTC channel sales decreased 1% to $248.6M, while wholesale sales dropped 7% to $197.3M; international sales grew 2% to $78.1M, with strong demand in Europe, Canada, and Japan.

• Supply chain transformation is on track, with less than 5% of COGS expected to be exposed to U.S. tariffs from China by year-end.

• Strategic initiatives included a partnership with Fanatics, acquisition of shaker bottle assets, and new product launches such as the Cayo backpack and insulated food jars.

Financial highlights

• Q2 gross profit was $257.6M (57.8% margin, up 80 bps YoY); adjusted operating income fell 9% to $73.2M; net income rose 1% to $51.2M; adjusted net income dropped 7% to $55.2M.

• Adjusted EPS decreased 6% to $0.66, while reported EPS rose 3% to $0.61, reflecting a $0.07 net impact from higher tariffs.

• Inventory decreased 10% YoY to $342.1M; cash position improved to $269.7M at quarter-end.

• Free cash flow for FY 2024 was $220M; guidance for 2025 raised to $150–$200M; capex reduced to $50M.

• Share repurchases totaled 0.7M shares for $23M in Q2; $200M targeted for 2025.

Outlook and guidance

• FY 2025 adjusted net sales expected to be flat to up 2% YoY, revised from prior 1–4% growth outlook, reflecting a 300 bps supply chain disruption impact.

• Adjusted operating margin guidance raised to 14.0–14.5% (from 12.0%), with a 220 bps net impact from higher tariffs.

• Adjusted EPS outlook increased to $2.34–$2.48 (prior: $1.96–$2.02), including a $0.40 net unfavorable tariff impact.

• Free cash flow guidance raised to $150–$200M; capex reduced to $50M.

• Majority of Drinkware manufacturing to be outside China by end of 2025 to mitigate tariff impact.