YETI (YETI) Q3 2024 earnings summary

Executive summary

• Net sales increased 10% year-over-year to $478.4 million in Q3 2024, with strong growth across all channels and categories, including both DTC and wholesale.

• International sales surged 30% year-over-year, marking the fourth consecutive quarter of 30%+ growth and now representing 18% of total net sales.

• Product innovation and expansion into new categories such as barware, tableware, and cookware, including acquisitions of Mystery Ranch and Butter Pat, fueled growth.

• Supply chain diversification advanced, with production commencing at a second drinkware facility outside China and plans for a third.

• Cash position remains strong, supporting investments, acquisitions, and $100 million in share repurchases.

Financial highlights

• Q3 gross profit increased 11% to $278 million, with gross margin at 58.2% (up 40 bps year-over-year); adjusted gross profit was $279 million.

• Operating income rose 13% to $79 million (16.6% margin), and net income climbed 32% to $60 million; adjusted EPS grew 18% to $0.71, while reported EPS was $0.66 (up 35%).

• SG&A expenses increased 11% to $199 million, reflecting investments in brand and global teams.

• Inventory up 8% year-over-year to $370 million; cash at quarter-end was $280.5 million.

• Free cash flow guidance for FY 2024 is $150–$200 million; capital expenditures expected at $50 million.

Outlook and guidance

• Fiscal 2024 adjusted sales expected to rise approximately 9% over 2023, at the high end of prior guidance.

• Adjusted gross margin target for 2024 is 58.5%, with adjusted operating margin forecast at 16.5%.

• Adjusted EPS outlook raised to $2.65, representing 18% growth.

• International growth projected to remain at 30%, with domestic growth in the mid-single digits.

• Capital expenditures projected at $50 million, focused on technology and product innovation.