YETI (YETI) 6 Aug 202020 Q2 Earnings call transcript

Greetings, and welcome to the YETI 2Q 2020 Earnings Conference Call. . At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. pleasure Investor your Relations. my Vice Tom now of President is to host, introduce Shaw, It Thank Mr. you, Shaw.

You may begin.

Good morning, Second Holdings' to discuss everyone. Thanks for Quarter joining XXXX us YETI results.

and some would these on be today call, considered that business, forward-looking to the including uncertainties to such remind begin, COVID-XX we relating this like statements statements forward-looking, to impact materially we statements that differ and our we statements. you Before various cause are may that actual the of those pandemic the make our risks to could subject of on results from

For the XX-Q in regarding forward-looking this for July XX, the to discussed as refer detailed release more press factors information well required quarter as law. ended statements, risks XXXX, made please morning’s forward-looking the any uncertainties Form this these information, future our otherwise, earlier and or risk undertake events the result new morning. in statements revise to no of by SEC or filed as with obligation update today a as We except

our YETI; comparable lead Carbone, in will in operational Matt issued the discussing morning of accurately our Paul results measures section EBITDA which their YETI more led performance Today’s non-GAAP as directly non-GAAP as of in the certain other as website. CEO some President supplemental of these are business. measures completed YETI’s and pertaining call release underlying Reconciliations Relations to a be call discussions use to today, our and and measures Investor non-GAAP true of fiscal Reintjes, believe by as and We financial available the the in CFO. represent they reconciliation, most be we adjusted measures the periods. During press included are GAAP we’ll of of well this both

Following our your open remarks, the we’ll for call questions. prepared

With you experience connecting that, today, delays during from working different should call. we so the also the to call any with over bear with us remotely Matt. locations I’ll and turn We’re please

quarter driven, and our Tom, everyone. Thanks, partners. good foremost, agility morning, employees, and and of and first a remarkable our our customers by second the YETI had perseverance

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impact growth we our repaid strong operating and the basis the in the substantial quarter, trend cost growth, on X% reflects also $XX of growth strength underscoring our gross performance, strong well e-commerce business business. product reopened, we the continued points, results, our the servicing as from of last rebounding significant to by off particularly the cost businesses our quarter. million revenues high the an and impact felt drew for period, return sales see April the on June, XXs, increased efforts margins businesses. U.S. management were the stores through improvement cost given of XXX e-commerce, at intra-quarter a Day. our wholesale corporate our a and last our execution to quarter. businesses point shift generated each XXX Overall, price primarily adjusted to period, sustained ongoing in pleased beginning We integrity showing while expanded mix driven quarter of point successful the With from Day our corporate absorbing operating year-over-year, Mother’s basis benefiting sales the that corporate our and a improving month, outlined financial also improving YETI down e-commerce both we revolver Father’s improving second in throughout improvements. recovery sales wholesale these feat as benefiting margins as decline wholesale The For to growth

I on is future. priorities, the we of and for an how our the and are to important Before understand provide strategic the approaching year update investing X for half opportunities challenges it the second

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During each delivery. the holiday, final week offer of guaranteed we

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the the Father’s Coolers Leisurely its again the XX Trips You Enhancing and Roadie consistent XX efforts, can hard of Anywhere, one strong Company Series as Tundra YETI & second saw the Trailhead page. see Hopper Fast demand of strong with Family we brought Hard list the look for side in prominently as Rounding Best highlighted Your Day the during Day Backyard Chair. coolers Equipment product & In Well-Designed Coolers support, Father’s Equipment the with Beach on of Dads, Best of June, Flip brand marketing quarter day the ahead quarter, with the recommended as the market. Gear story cooler For In coolers Coolers Gifts performed cooler our the was this days Haul Patrol Most the was outdoor our Camping of early Take Demand business, soft YETI XX soft was customers In even the Out YETI Summer of YETI’s our the Hot on XX family XXXX. V balance the and and and of Shifting Hopper XX, best Road demand, Magnifying own on Gifts YETI XX% out we to our for our ranked business. innovation. selected has through of Outdoorsy to Hopper Condé next-generation Camp our one about You of once across Series. for Father’s expectations to pursuits. A more focus of Cooler X before V quarter. Roadie Instagram new & its Equipment enjoying up year-over-year highlight Coolers support media. X the The including to MXX Best Can their with Nast performance

the Trailhead in as category late the reviewed chair heavy-duty best beach Magazine naming chair. Forbes spring, the

the modestly On the quarter, corporate sales. and wholesale the of reflecting results disruption were Drinkware negative quarter side, for early

June. robust However, overall and the in remained results channel, demand were category and e-commerce own in strong very our May

great a success been has Colster Can early for Slim new Our us.

at look debut wholesale particularly and our limited Roadie quarter and second to customer for we As half the across access year, energy our second extending of late wholesale Elements the XX excitement channel our from priority is our and of the continue quarter the given half Colorware launches, product lineup the the the of the much for first Drinkware. with

also in coolers our hard new several Drinkware form we’re in the inspired and in in new both and quarter, colors Green launched adventures business. wild. executing We and Coolers by soft new Northwoods focused Green This our and recently Select on Drinkware, colors factors Sagebrush

customers. as Rambler campaign, great the to international Drinkware cocktails ounce and launch half. size new XX a tumbler for We the a domestic innovation also deeper our caffeine Expect into with second both move with adds and we our lineup additional which debuted

focuses As to and been in acceleration. how more years the demand the a digital our capabilities, challenges evident balanced impact digital our support optimize retail rapidly five continue partners. engagement, omni on and true The past increasingly evolve future has as our continued a a continue of digital invest how over we second strategy. in to never to drove wholesale capabilities quarter our commitment network to of we our ramping continues investment omnichannel own digital the we This supports

Marketplace the sequential throughout in reached yeti.com, the customers and and e-commerce conversion April, S. the emergence see and sales reflecting monthly On total Our this strong strong balance traffic direct-to-consumer YETI existing XX% continue Amazon and retail after XX% of of improvements we period, corporate quarter. a of a disruptive growth sustainability to sales our healthy reopening triple-digit yeti.com business the quarter, the grew and our growth of on site. late non-U. business, YETI of new the in

a early growth steadily towards funnel in digit operations, of as held focused in triple the reopened partners focus true Importantly, revenue sales, quarter building the with this quickly quarter. the helped channel trajectory wholesale throughout In quarter. we many later our in corporate business on our shifted the businesses remote that

wins environment. program June. sustainability followed store even Starting our We seeing of late with the also we May, in by work-from-home strong six outreach Denver in in YETI stores, reopened the a debut retail June, off early kicked

We up the during also implemented reserve pick functionality quarter. in-store online,

is on example even pandemic already road awareness future expansion. the received and of been from for great ROPUS little While our our utilization initial capabilities emerge sets a of the map, initiative, this stronger. to ability up growing has with us Despite well

with wholesale, quarter at We communities. independents through national Looking to and nimbleness seen accounts, deemed this that our dealers remained saw our support large partners were and our our channel from with a we in the to growth have grit. essential adapt open local

mainstay retail implement capabilities, their We own curbside, omni has a shifted which also national saw partners to offering. including our large quickly

our retailers. and quarter what was a in much wholesale year-over-year wholesale the shutdown, decline a see more by key reopening just and now a business. of site one-year local significantly yeti.ca business outsized as phenomenal Canada, the to we Australia its supported With both in as XX% that most anniversary, cadence impact by strong the strong through only is continue the e-commerce look performance, of the recording restrictive pickup quarter we sales in by wholesale brand. As overall demand June, access non-essential Canadian of saw curbside nearly can YETI the we our strength despite customers business, With the domestically, allowing outperformed international X Canadian driven Toronto, Phase has for Outside was driven appetite international customer the such markets, conservative down where for at than for e-commerce. remained expectations. Nonetheless, hitting had

our footprint initially partners the Europe, to countries. We efforts retail but by now with are year, our own where in we and nine are develop last UK in continuing supported digital led

to numbers begin cumulative process local excited with the are the bringing accelerating here customers YETI authentic the to While partners. global small, brand we’re of more

more in wanted to results a provide is our discusses organization few how evolving. Paul Before on thoughts detail, I our

private down shares saw earlier million support five meant of and quarter, our you through been holding with their is equity greatly also just As sponsor continued nine seats. with X% of years in representing over of affiliated Directors YETI directors shares, steadfast This our evolution total X outstanding. my second the ownership Cortec’s to appreciated. Cortec has change of two has Board with a only now wound

I’m perspective we former the excited Brown, customer XX depth the Chief Tracey May. American the Diabetes of Experience our appointed of and for CEO the the and as to reach and SVP Sam’s our also and Operations Tracey Officer for I’ve and We personally broaden of her consumer in Association, Club, build current of known on the relationships brand. of to years, experience continue Board

brand be This tether and including story our our in our of of inclusion. also hired that evolution work our role the our to addition important President and equity Board, evolution, to In and will in first ESG June. we Vice will success diversity, ESG integral an is long-term to our

to lasting and powerful, positive YETI impact customers We a and brand a will community. the nurture in innovative our make on continue

challenging made We’re fluid financially to proud strong, this long-term remain innovative sustainable during we’ve of and growth. time, positioned will and the for progress and work

Now through the let to me run over it financials. to turn Paul

today. of the in half as been both Their collective thoughts are in review business well strength results, Thanks, environment for efforts quarter would the Matt, strong results also supporting as of with of a work-from-home brand ongoing the we to by followed team. on Matt’s I’ll in comments some demand and incredible I we everyone. the reporting morning, resilience our good the instrumental the at continued have high-level our this like of second echo begin the year. look as back

year second million the For to sales compared $XXX.X quarter, $XXX.X net increased prior million to X% the in period.

not we practice, provide trends our go-forward during commentary. will select my While intra-quarter normal some again

while YETI outdoor in down XX% focus $XXX surged leisure high from for activities incredible and outdoor As given XX% a excels our with in trend improved XX% year’s May behavior the QX DTC had May steadily sales the sequentially channel place. period that consumer period. the quarter, April, in last were the reached same to normalized. as focus overall Coolers The the channel, shift and on for corporate across growth then direct-to-consumer represents digit June. led we with part, and a in DTC all in in given we remain as XX% sales million to as on in call, forward. month go the workplace total turned online million marketplace in related period leisure benefited in towards net declined the as to growth months will compared and sales Unsurprisingly, Yeti.com Amazon progression, items a the net the positive of and Equipment calendar. range that Total both even compared well broader sales particular driven year, sheltering the to & areas period wholesale strength of This June core net each By by at $XX.X mentioned channel net and The Drinkware. products, triple in last shift disruptions sales corporate strength reopened. in events earnings in platform’s the essential spending, channel

by to impacted effectively However, international the efforts & in our YETI that month Declines Equipment channel to the most brand, were becoming former during for quarter. better relatively decreased offset the the significantly with open wholesale steadily categories meaningful Canadian international closures of the million positive including $XXX.X for the the our In X wholesale more strong were customer growth helping business. of and sales both last net in us, results was $XXX.X a only DTC some doors as our improved June. focused drive return With Coolers helped overall of reopening XX% Drinkware significant year. June. compared the lastly, And store sales quarter, and down were Wholesale retail, positive month heavily in period. million a to softness in demand is growth stores performing throughout registered

well was we during exited the By performance point-of-sale as at to sales channel & down which compared quarter, pandemic, net in the that two XX% net sales weighted business quarter months quarter. the a to decreased greater We outdoor of the to million category. growth strength compared the Contributing digits the year-over-year. in million double major but the by based positive soft sales, positive the quarter, to both is our sell-through Equipment $XXX Coolers year. year. increased category, in saw returned million in growth impact also on were Equipment last addition, this X% our our products and million hard across category. to to last as onset largest decline last & inventories same living we strong period $XXX.X coolers this $XXX.X corporate received, heavily In to Drinkware $XXX.X saw reporting negative sales for Coolers and to impacted of Results

offset into leveraged Gross increase XXX during $XXX.X ability driven costs. basis net primarily lower DTC particularly driven basis lower the net fees the net million tariffs; million Drinkware; product. points On from increased freight our basis Adjusted million as by expanded with SG&A the expenses or of for strength XX.X% channel, of in higher XX.X% $XX.X second expenses cabinets. XXX XXX in third-party of gains following during cost including mix year. online million basis year. we favorable chug fees, points the $XX same the channel offset to same reserves professional profit of compared faster-growing XX driven our our for period demonstrating deeper XX.X% customers' logistics our quarter by samples improvement, SG&A last a year. basis related ongoing in to and points last net of was same income to were non-core sales or Variable to and and sales net savings the period of points XX% Non-variable other last partially with to by were lineup from sales updated or improvement and net marketplace to The delevered or basis side, million These SG&A to or XX bottles decreased compared cap, million XX% XXX non-variable saw point $XXX.X sales increased penetrate expenses initiative, XX% positive year-over-year freight. points and XXX or XX the by and XX.X% $XX.X product operating basis inventory sales marketing basis cost inbound impacts: overall sales by XX% point fees. lower period outbound from Adjusted compared mix; partially points of expenses colster $XX.X

to million Our during income XX.X% effective per diluted Adjusted to share EBITDA last per net tax XX% $XX.X net the $XX.X year. quarter XX.X% $X.XX of XX.X% last the same second compared $X.XX quarter to sales year year’s prior period. XX.X% compared during grew or in rate the quarter. net or Adjusted or million $XX.X increased or million in compared to diluted was sales million to XX% of share $XX.X

our balance sheet. to turning Now

cash period. compared million of the million ago As year of we equivalents XX, to in June XXXX, cash $XX and had $XXX.X

the we ended last second quarter, first year. the on with declined revolver. to balance million the XX% Inventory that borrowings the $XX $XXX.X to orders our outstanding in ended quarter no quarter the the by repaid During drew the the compared financial revolver quarter quarter We the midst quarter on the $XXX.X pandemic. purchase provide same flexibility enhanced in of million to driven early in the inventory actions during second down in and million we reduce with

by the quarter. experience, throughout levels impacted we surge DTC demand inventory led also our we by as were business addition, the In move

excluding to was compared unamortized work continue began we finance financing we will mid-quarter, expect and As Total of a debt, cash process debt inventory a adjusted last to improved quarter. which in fees with quarter. trailing to in $XXX.X deferred chase leases net year suppliers prior our throughout the XX million million result, quarter. the times times the months to ratio year’s $XXX.X the EBITDA our for to second balance, X.X compared total X.X third Including to

While channel. trajectory a of sales opportunity it XX% persist do were the how a XX% in optimism had We may just We stability diligent second in economy our at detailed to to months planning the with pandemic, challenges for remainder impact share experienced changes we outcomes see continue early our the will particularly our understand our is and the underscore past half the significant planning target in range of uncertainties year, quarter, the the of of full about volatility forecasting of broader the the great given balance balance year business a we of to to return range and the to outlook, the and we we and remain channel another of few potential consumer landscape. wholesale we year facing and a unpredictability The of conservative important balance across the the year. in prudently COVID the own during year. With larger the business, we better thinking of led long-term as DTC in the the navigate withhold our factors the month-to-month to play, though multitude the by exclusive continue of disruption. rapid strength

which content approach First, and we managing for brand trend business discipline second, working, by demand open products Before pandemic. call reinforce customer business I is to remain the We on by want turning the the your the like underscored powerful drive for fueling shopping with over questions. participation, during continue leisure to to Operator? our outdoor we highly and incredibly believe the we the three highly call online strong heightened Q&A, the our omnichannel now engagement; the remain for focused future; foreseeable digital see currently: is sustainable to fortified shift a for finally, themes creation growth the expanded relevant and to would in

Jefferies. Randy Please question ahead. a Konik of the line go We Instructions] [Operator from have from first

question. differences product quick bit behavior And guess, a growth? the category in gave channel, in versus buying you perspective quarter? of A can customer little those direct-to-consumer the by customer Matt, more sets I within – – any existing elaborate on on in the new of two buckets you

And continue the as wholesale new quarter growth, – strength elevated a channel through mix about we strength that channel, the the more our and held our buying a very C&E strong and call, a back perspective, which our been a different in the had sales and DXC we between disruption. good But would From and so customers call in to in see seeing the – and across trend from performance we existing were quarter-over-quarter. broadly little new continue corporate to existing very both customers, Randy, through said, we’ve little and that by mix to strength it and our quarter a I Drinkware. obviously, our that innovation, see like mentioned tracking disruption the back and we really and we we in continued bit as albeit slower, driving a good Drinkware, C&E quarter. on coming marginally both both we new saw that well saw, from really but DXC through existing, feel

up how quarters? and And think about as year marketing Maybe of the strategies then some be of marketing. for us And said, you I how picking products about awareness is the is of strategies? more the marketing the more product launch awareness of into sits then some changes of it brand terms thinking in on going digital. like, a I on then what the you think Why thinking thinking like nice guess, in on back those It for bit I elaboration give turning give your your an quarter where really you six for to in be demand the And through think that despite you sounded we should patterns got next don’t half theme sounds about you’re we there? us should any seeing dramatically. you’re the today? of little perspective be next the year,

A couple of things on that.

our and really in things a on our One the kind continue perspective. was our digital assets work-from-home disruption quarter half we that and driving marketing a being through brand unknown quarter. of the also about marketing how Early the that the towards digital And was from continue both then to had. the of from call product mentioned quarter efforts spent to really was the into perspective accelerate, and lean the turned we early the of product period last marketing and brand with marketing as and It strategy quarter, into started we in the leveraging full marketing. the our lot is, that first acceleration and we continued engagement, both of and a – we the thoughtful to OpEx

of both you’ll we the building we second to awareness. into brand that also think in driving existing quarter, original got drive had digital as muscles products broader that future, the around really flex flex is the see continue been One and but then and I engagement, content and to us new products,

disrupted in venue combining also the on right with program, which a we have driving products. mentioned of the now, right nice new Roadies, one of One call a community that’s our music and really was a space, out in while highly as the it now giveback We For way

a when in and business. And are things. those technology in investment investments seeing those in you’re so within digital, from and results people the we’ve mentioned made of And our we creative lot

that. do to to we continue continues see Awareness, us believe, rise. you’ll So

suited new environment XXXX the said seeing as to on we’ll and world. mentioned seeing certain product half of we haven’t for those launches. in and the products But refer and out last gauge that where we’ve do the back numbers, come made latest and into those calls. U.S. would we ramp We be the and I’d reported like in acceleration that launch we future the XXXX market in gauge balance call a around we all growth that of update our where time the standing will the in product receptivity We is may the we seeing time. But markets that’s we’re we in product we’re in because growth a into that we’re decisions dynamic longer as have better our We perspective, distribution digital the the process how From on think our move the call, we is. product e-commerce the geographic back awareness expansions.

you. Thank

We Zackfia go the Blair. line ahead. have Please from next Sharon William from of question

Congratulations And It back of third where nice a be DTC. out Paul, trend. like be expect be, that wholesale as And and on kind level level. on should that I might But has reopened? the XX% it that want inventory it consistent to wanted just question, how rebound inventory any I kind give maintained quickly you the constrained too, guess, can healthy quarter? very just sounds to if us been confirm you’ll thing ask your guess, on I the to to you And of meet demand? a levels. relative one channel then I has the balance sheet at it really has of just in demand chasing inventory. to where idea was be you stood here you mentioned

Sharon, thanks.

And of the chain meet we of during So us part is our during remarks, aggressively, position what part flexing of the really, prepared the now And we talked we’re the to I’d earlier, which are early doing supply about year. disruptions. closely of defensive QX managed We the late early throughout thoughtfully, the inventory QX. balance early demand. part capacity demand and say, tariffs of ahead to in we took as but let ramping leverage meet the and a actively

continue will we to flex So that to demand. meet capacity

about, we in. have merchandise one soft coolers hard if coolers, outages sporadic we new by question if and and it’s there you color our as is see look at particular, think in website, you coming Your – area about

up where trying of flexing but thought more slightly. product. increase will end we that’s the really We now inventory then – to are where year-over-year So year we capacity we’re on we to the balance bring inventory continue levels expect previously. through would be down the versus levels, to in And year,

will build even continue into to So XXXX. we

this DXC Sharon, the I’ll is Matt. question. take

saw, e-commerce I last was in reported in strong said in growth this the quarter, things really our that in we business. the our one and prepared As remarks, of call, the we early

things started settle out, One the to is, world that most to as started pleased were as with trend business we continued. of wholesale and that reopen, the

the about of good and saw feel the it. that our we so strength in And continuity we e-commerce business

Thank you.

John from line of the next Please have ahead. question Kernan Cowen. from go We

on very able Congrats long-term XX% targets, the that be to to impressive quarter. phenomenal to a growth. Paul, obviously, return to top line XX%

follow-up we margin I about And have the year, think margin about should a question. how As we half and profile of that SG&A? gross think for between the the back business of

Sure.

will So the expansion gross to see we shift saw we by driven in quarter. second as margin mix really continue

So we margin gross expand. expect to

of about that the OpEx, it the buckets SG&A report two we the way in in piece it. we On think

And faster expect with continue we spend we the due So non-variable part. DTC continue to growing would variable the to balance to then to cost company, will the mix. deleverage into than of

in So – we’re year, of in to we cut half as on back marketing. haven’t the back we going look invest the

We’re in things course, of something going invest that, like like to T&E.

of in restrictions. reductions because We will T&E travel see just

So in half back long we the with year kind piece. business expenses in But see shift of and will delever, variable variable mix margin spend will we the the DTC, the and short, that’s top of continue I’d say the half. drive how we think the expansion to to about back to gross line expect to the and

return about just follow-up. & on of we a a the top do lot of those the back Drinkware, things. of with That’s helpful. half robust targets? as Equipment you Coolers And side maybe exposure corporate to faced of the quick think Drinkware the in year mix How – obviously and line the

we June. Drinkware, growth would in I May and say, and in Drinkware we to comments, returned my as positive about So talk

And being June. So exiting corporate sales. positive of and really of it with the positive, then in talked was sales, the disruption corporate month we April wholesale, the then about quarter the

we as year. both see XX% of in growth So categories. half look across We to line, the back forward, I that see top growth the in XX%

Thank you.

ahead. Peter Please question of next the go Baird. from have We Benedict line from

thinking top tight the First, to half either inventory? within at be second below over inventory XX% respect to have line the there Paul, range? guess, the that anything you in can situation it given that would to XX% point areas the the both quarters happen I this with Are envisioned of is of the year,

both at looking what say would in we’re should that I is be range today.

I out there And longer-term a year, you not know been And but Okay. have lot we maybe you kind there, in how from key the know couple you just are then maybe may impacted might but now? for – mean, talk been going on pre-COVID? don’t shifts the this here. the guidance to And I given seen about of years what just channel about of be the structural of how still maybe by uncertainty you’ve has profitability there’s may I today opportunity YETI what out mix, the as what’s how are stick the compare to profitability about or thought you’re seeing of guys then that what try a things thinking

the Peter, would the but say is of expecting is So I just the makeup profitability shift accelerated. we it, were for what DTC company and where to it

going going, transitioning, is where it’s it and it’s just where faster. we like like we So

down, higher – is So And gross come It operating income the DTC very as then positive. it accretive. gross piece costs. continues has variable be margin to margin we

we business an acceleration So than it’s the just different to. significantly were moving thinking versus was really where

this What fair. that’s the that and maybe and in And you No, of points couple grow business look plans as had opportunities next order to next years? how to supply go question supply over And that guys last over just have the evolved that after the kind of international guess, has kind key, the expansion my that out you chain you Okay. I around be couple of years? year. would coming into chain are entry of

those continue going now, instance. international, we’re note U.S., we continue chain. And that increases, and we in shipping the – continue to we to City, supply added from at that international will for look a think when But growth. the locations. I chain Right Salt support supply as processes are looking we directly manufacturer So build business developing will we to Lake to just – towards to muscle for expand in the locations international, – international

you. Thank

BTIG. have from the line ahead. Lyon We go Please next from of question Camilo

competitive you seen you’re what back on start thoughts your get volatility competitors the more to seeing the landscape pull from become wanted promotional? the during pandemic. subside or to I Have or of

high Camilo, integrity. of with, the level the say this demand on question. Matt. price about we our largely, for we in talked QX from Thanks was that we as focus is a YETI seeing What would delivering the were on call,

consistent behaviors new any any We in or significant entrants landscape, channels. either – the haven’t haven’t would historically that in been are I those say seen shifts competitive

doors the and demand, seeing the we’re like retail where own in the to through e-commerce the continue are partners' in doors we’re or open, open the We are that seeing our strength DXC. consumer strength strength our we e-tail business then in that or

would largely, shifts good we about we’re And competitive significant so in we really the feel positioned. landscape. say, And where seen overall I haven’t

the category talked balance you’ve quarter. just – how think should be getting like we activity as July a side of Has momentum change that has a of wholesale into perspective, the business would throughout progressed? the we on there’s trends to has should certainly Coolers is the you, that for And a year? strength able those quarter? of It two obviously that Paul, it. your that does surge from go components about. from into you accelerated seems share third and lot the July? Got the How the through about outdoor the category continued fourth benefit

So will unsatisfying thanks answer. question. This be for the an

we’re today, happen. year with then growth. that as going this the we’re in categories at XX% XX% both the back of as to intra-quarter else the – us, I all XX% that to in the we to half for be to And feel we’re return we the point able are to back business stay to our return of that We will disruption that returning practice we not results growth, the to about half But – of say, earlier. growing may good caveat year another to to or commenting going of that in quarter well the had to answered in. at the as But on XX% looking something

July. on color any you give can’t I So

Okay.

– and I growth, think then correctly. mid-single if digits, was your – to and components wholesale of the so So I wholesale, long-term XX% DTC DTC that’s XX% remember

about we channel think So of growth? that’s normalization the should how the

toggled about – the to – XX% give – all long-term of a go about how or back of thinking to year. Yes. to I down the thinking we way way wouldn’t of the the we XX% to we’re were half share so growth you back

variability what of I to change it’s could are that, I month-to-month. think – think there happen, to be the going and below it’s going

to kind we back But or certainly, of get between the of So business XX% the thinking and say in wholesale, DTC and quarter, half it we everyone in toggled would the how was the about mix year. DTC significantly the we’re the anchor to that to I business back to XX% different second obviously.

from I outlook. top So anything our line into wouldn’t below look

it. Got

Okay.

forward, want on fact is going keep that up level the no and that the reason So XX% been to high throughout quarter, the to that of XX% changed improving an the to intact that believe way, wholesale was that’s April weaker said you parts performance and the that basically, DTC strength despite XX% maybe and of trajectory. continuation the different business, a you’ve of the of and the improvement wholesale, – seeing Drinkware

Correct. and and we really driven it the June. it was And in said on then April, Drinkware, did yes. turn by positive as May But

you. Thank

of line of the America question from next Robby from Merrill have We Lynch. Ohmes Bank

of of quarter, question. three a themes, – Camilo’s bit follow-up a and maybe love a the Paul, I nice bit A great on Matt, execution. Paul,

not Just half, know you to Coolers? surge guys for guidance think think historically outdoor what most – might about the period surge? do tell similar back-to-school might about And this how be fall/winter in activities we correlate Drinkware what on YETI you’re be that driving season and you the in environment? and have might kind demand of a – the in the back us in how I the with called YETI out would And the giving activities recreation. but different

of one this cases. environments Robby, There’s products at about are different and different they very is of the our use take all Matt. YETI few kinds meaning used in one. things play. days And pursuit agnostic, is talked thematically kinds the from dynamics get I’ll that YETI of we’ve early products that in a all

have we so large use gathering. group gathering is And disrupted, if is about things in in a gatherings of business group one the same like that the you backyard cooler small the with we large a are flexibility used

our and lot broadly it is for A bags market. and Drinkware; well to to really really our of to our more taking flying category. airport think the places, well Equipment; that report a lends seeing Coolers people near-end looking of we activities, out parks, getting nearcations open to the emerging spaces, it We’re going well lends versus lends & to

school, on person. like around to lot play in necessarily customization dynamics Drinkware. single there like. individual, of still are much in And still the And up for in air needing that physically the there we things we so awareness just there’s ready a of Drinkware recently wrapped with a school, be really campaign With country, getting in-person like run short we around message up dynamics at a not back-to-school,

on park like flexibility local we your front of neighborhood. our or so adventures how keep fishing in to continue trip brand or a lot your have whether in of and in the we on bigger our local a that’s product being going off consumer, And

we to and had and and And outdoors flexibility around lifestyle as from from so before interest from of there messaging home. being This a active from there’s to is that pandemic, perspective, close well a fitness of a lot is consumers a that stay keeping perspective. perspective, evolution a relevance the they a continue and which an product focus trend also seen

like getting the a an been digital acceleration think has people in of this little bit adventuring. and And acceleration. out This much so we

and And near-term we dynamics it’s the both like long-term so creating. that

great. sounds That

about forward how follow-up. – going to you kind demand how does business? the change you wholesale And any your about when business you change a wholesale does they are seeing guys Just dynamics going thinking And does how they’re percent that Are How think their for on stores? in look digitally inventory larger websites? your at more guys? partners, of YETI quick of for partners' that versus do you

strategy created the said evolutionary I think help omnichannel retail, things we acceleration is new on for You opportunity. like one we for they’ve the space them their our like did them as as digital of our business has the some also much the and e-commerce point-of-sale in tenets and to we at of in think, call, them, partner for partners, about wholesale it’s with seen some And opportunity think same and evolve our merchandising, know I closely them.

trend. to that continue like So we

we just the obviously consumers widely and supports a that’s that, and it’s different think idea is also on that site, want that to for in shows or a buying, them But affinity – of their a mentioned there e-commerce about talked they’re we way be up when curbside. YETI I loyalty training partner sure an and and in call, wholesale make that. of there

Thank you.

question ahead. We line next Please of James. from from have Joe go the Altobello Raymond

you you standpoint shift younger they but strength the the skewing in pandemic. during female? or mentioned So customers new more if from as YETI the any Is customers geographic both saw a I in in quarter, existing noticed and demographics of your anything Are was well? perceptible curious you noteworthy

being a continues, continued and customer from perspective, period, evolution that. the still evolution national the both brand. of demographic we’ve customers Joe, strength being south a that, southeast in, years, that the we’re international the through many from Geographically, a ways, a repeat the in is just period and Mostly, seen emerging that we trend acquisition. four we well-known like which positive like it’s purchase existing over and broadly we’re the And That brand still a we’re and one. and the gone geographically last getting or also we’ve measuring new from five to in and couple and things.

geographically. We are And strengthen demographics. as on we’re that seeing and age the to some that. continue groups like we’ve expand things really trends kind would only always positive been as say we seeing But other we our touch of we I

That’s helpful, Matt.

you Curious to growth later side, Just that. what you secondly, on the helped said delivered in corporate the quarter. drive

I point. this from prevalent home at think pretty working is still

workforce their snow and hard a globe most think of had about. what, middle a There’s you the a learn pretty to sudden, March, running remote had of all couple shaken of businesses dynamics is. In when

So things that a of were progress, were in thrown all air. sudden the in

on elimination What is a a is remote sustainability, And engaged see use the changed. the and experienced so we corporate back we of part a opportunity and you continue to that corporate have like hasn’t remote for single business workforce the sales running get settled to that settled, business all it, had to we use And our to about your is track. sales workforce. focus them with around business get business way and around of get what companies that for focus stay

continue be on think positive the the for near-term sales And dynamic we dynamic, and very intact. long-term business. to growth thesis corporate that long-term we So remains

you. Thank

next Jim from from Stifel. go of the ahead. have We question line Duffy Please

team on Congratulations adapt effort execution. the to Terrific so quickly.

be planning you’re types? we inventories suggest you that interpreting demand lead correctly, to you’re balance So you the chasing back with different am And if then end speak Can I comments to Is correct? of understand to in inventory. your XQ. on times by seem product

yes, me let Jim. to that, I going start take So second let one. – me the am on

to throughout year. year-over-year flexing meet levels year. we the to capacity are back of the this of I inventory demand So balance down would see throughout half the expect

So expecting to to said, in demand? half, down. will to inventory your but XX% We’ve we’re of, be back question sales to meeting get the I back XX%

the And allocating two channels meet thoughtfully you look – then why at can our obviously, later, faster out; here that our with we option omnichannel, And coming have demand. Tundra very, maybe So yeti.com, I And what is a we air our flex that’s I, in, maybe consumer time inventory think options. are then one in. There’s working and we’re faster expensive. to get very our XX suppliers of that boats sense, right? we And channels, air; as But deliveries From the have in lead we boats. catch don’t still both days There’s up. some doing product across daily. faster. So we’re that’s capacity. to also day actually perspective, back wholesale is it’s have

So to we half something demand, daily we meet that we all that will on, can demand. to at a year. it the do through meet second and of the But this on is working best the be that work basis

quarter year? impressive. much then, some a works backdrop sustained question a Matt, the how in was Did step-up the pandemic, plans? that And of entering pull content the had the a into forward digital curious pace I’m from And engagement you I versus marketing. Understood. digital really you such on you The accelerated previous campaigns? a the in in was the produce to pipeline have given the are half back at able of that of pivot

our in library question, Great campaigns forward, say leaning to our It were content now, to in pieces back those One right seeing go now, that you created consumer. front But Campaign create digital of all Roadies power we color lot ready pull of backfill ways that both didn’t like or things engaging found the was that things in and investing it. right storytelling. truly our content work. commitment then the putting they storytelling really make of you we of makers pull go YETI really, shows to content the library Jim. go. our this put in had you’re going exceptional content product I the some of, would the into some efforts have of in-house outside back we something team then those pandemic we and the out from films midst A things and of we elements natural was of the it were campaigns to and with the new to our creative In to and partnering shot brand sense have saw you forward this of For to and of got had

expect to what push product of and high So value incredibly the edge work high production our continue marketing I brand what team and storytelling is. continue to produce to quality,

you. Thank

take line Greenberger Stanley. the We ahead. question will from of Morgan go from Kimberly our Please last

coming distribution? follow-up along? Lowe’s are any you to Paul. wanted the you I new ask distribution. I then just How two Matt, at is And And about partnership had for questions looking

obviously, partnership to well. a and that From partnership distribution we XXXX continues I started go Kimberly. continued expansion in late say perspective, XXXX. the would Lowe’s very early the Thanks,

all, the before thoughtful disruption, we with really essential, be engaged have deemed stores their They so to if through And open very largely even of incredibly beginning, partner roll good unprecedented this very Lowe’s and time. and period. and the going an how the we during been from with has they partner, remained strength of said not about our our in we Lowe’s, as out how many, we As feel we’re omnichannel. all balance wholesale them. was good of a

a we we’ll the additional we we buying great wholesale, things; drive. our it’s with obviously, four at As three the it continued new or really like new past, and as to one with we’ve of and in with today, base wholesale continue far of look relationships new occasion the have kind customer to opening of existing have really what rest wholesale and months delivers and evolve YETI, a partners, said And for as last supports the if newer Lowe’s a with seen I’ve the partnership wholesale. omnichannel our in augments we

mindset And we continue as to move so forward. mantra we’ll have that

was Great. we Perfect. I what in variable us back percentage quarter of was ratio what second to a with that I DTC. lot changed way just the your surge assume SG&A. in sales look a sort follow-up Paul, fixed? and then, of to if for with And think SG&A wanted on there Is about the XXXX, to And percentage

us the quarter, would super second how be understand help kind have looked in just if may could you if those of that So helpful. percentages

a non-variable, where surge, initiatives, because DTC second variable on percent than of quarter became the Kimberly. in say the DTC cost with containment. were with focused Thanks, obviously historical, which quarter and some the the I’d we both as Yes. and surge our of our the bigger variable beginning some cost – took

enterprise variable to an example, be of a of – percent about flat think – second at is I I’ll deleverages is what you relatively really expect I total quarter we’re growing to as and a of kind as do percent of from I sales, growing you and is of sales. the getting that DTC use the would from as math piece filings, percent the SG&A can It continue and would our is a the back, sales, of if go and XX%. where DTC X% where at our

So deleveraging a that at percent of the relatively flat is enterprise level, variable direct-to-consumer, but of as sales. inside

to That question. like closing to Reintjes I sir. Matt turn you, to for floor Over last back over the was comments. would

we Thanks, come QX Thank forward joining We today. updating for together everyone, you. for our to look you us back as results.

you. today’s This teleconference. concludes Thank

your Thank for you time. You your at this disconnect may lines participation.