YETI (YETI) 11 Feb 212020 Q4 Earnings call transcript

Greetings, and welcome to the YETI Holdings’ Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Tom Shaw, Vice President of Investor Relations.

thanks and us full and Holdings’ discuss everyone, quarter fourth year morning, for to joining YETI Good XXXX results.

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

to refer future by For more and statements forward-looking the information, events, required with with law. undertake information, in detailed as revise our today X-K made as obligation press Form recently please the result or XX-Q or to Form update associated of risk today, except new along We the factors any filed SEC otherwise, a filed most release. the no

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

turn with over call questions. And open the Matt. prepared for our that, remarks, we’ll the call Following to your I’ll

a good and quarter. strong fourth by very for Thanks, an punctuated XXXX year morning, was YETI, incredible Tom, everyone.

of EPS. the the As we we year our high-end of adjusted our sales high-end back original at and full net our exceeded XXXX outlook, look forecast

the acknowledge our moment given plus team within successfully out series I constant dedication and remiss that a our and the and hearts the throughout communities ongoing XXXX. At year. through are passion our those of be proud execution, the go would to to addressed pandemic continued we hardships suffering the amazing of YETI, take We’re customers economic performance this at of throughout partners challenges our not to same social, of challenges. support of the and time, the to

strategic also success we resonate with central, ways. Before two getting the brand’s This to how priorities, our with but over our highlight into in customers are results our the innate in ability will want believe XXXX, we continue details starts our connect long-term. to only themes of to customers to and I meaningful not with

years, appreciation recreations. outdoor to home. been pandemic including these we’ve and a well-documented behaviors, a further more furthered greater activities a For for and active shifted in lifestyle to increase The vacations closer

As to deliver and brand these of positioned lives well are the all trends. intersection that of versatility our a we across products, at performance, durability

upon the supporting shifts pandemic, the As here outlined results today many tremendous dramatically the further and of observed are traction, of changed gained our growth. consumer world the we during legacy I building sharing

simple weekend sporting However, events high were on a drink that curtailed events for something activities as were disrupted. that morning or a also world hot standing relevance gatherings, and sidelines at eliminated. many distancing commute a the of YETI meant including Many backyard other or tailgating, as barbecues,

as their is uniquely field. outdoor Moving time, positioned our to the people forward, the elements and At return travel of attraction endure. to we certain and to begin social for brand active gathering of pursuits same work-life, expect

of which to differentiator a has supported by our depth environment, drive hallmark adapted and our and we YETI. brand years, rapidly Over evolving engagement the strategy, push. true our a consistent We breadth five been believe has consumer have business digital for marketing in impact been awareness a past

digital lessons in invest and even how previously you’ll see focus YETI have to will we the engagement and across leadership product evolve added believe and year helped, data well capitalize our priorities. in and reach development, as digital notably, position an other brand from communicated, on will XXXX. prioritize have upon this our ultimately We pandemic our this market, we analytics, international The potential. we its the focus inform Most As stronger storytelling, strategic e-commerce transition success as in global in this help product infrastructure. build of

for fourth Now the of turning quarter of XX% posted approximately sales in only for to year by Equipment the and team And the Product DTC execution and the growing increase to year. full a the our the XX%. full our resulted Unwavering the fourth incredible year way, for delivered continue down slightly. year. for growth channel growth XX% quarter. the Wholesale X% lead both with and was full XX% quarter growth Drinkware throughout massive full net demand despite XX% posting quarter into balanced between the & customer results. disruption and year for Coolers strength

even a the second Finally, quarter, our the the high XX% international a X% business, straight nearly delivered basis for the full margin our million consistent of These Similarly, retail year, quarter XXX ended balance highlighted which XX%. in growing demand top YETI performance growth by paydown bottom. adjusted debt at remained exhibited of quarter, resulting growth million, margin year voluntary mix, in during XX% strong to points U.S. at of the the X% EPS XX.X%. operating line, top yielded partners supporting adjusted strong margins face to and XXX year to basis the expanded while XX% the the $XXX the cash results and Equally in large operating our expanded disruption gross reach adjusted year-end scale fourth for as quarter, and of points $XXX approaching outside of and for also

remained focus our guide in investment since have priorities, strategic Now XXXX. our which IPO we’ll to and growth XXXX consistent shifting in over our in to continue our

quarter as Supporting must-have. our and distribution storytelling also Dispatch homes, fourth these and culminating our in expand our while of the reach digitally X.X stories year-end perhaps duration extending those and to product efforts, strongest, broadened holiday efforts consistent were most million a of brand in November to YETI magalog we’ve most integrated, First, over YETI impact.

As we highlighted Thanksgiving featured copy an example, developed of was that a which the content in Wild also our print was ambassador campaign, Dispatch. digital in

key community. and Outreach impact supported Captains YETI sold and We the such we Black Clean for look Dan Smoke, the edition mission and sports showcase continue for reinforced also strategic and cause. placement quarter, Horses, Nature of Conservation QX, of overall entertainment Lieutenant For spot. Conservancy, a Billion the We organizations, Heroes families members The limited between and and out educational worthy Project, Rooney’s Oyster Memphis disabled to LEE of television a Throughout and Initiative, as in November, this Day In raised alternating brand Rox. to incredible Alliance, focused, in The $XX,XXX scholarships fallen Colonel slots Folds YETI through brand Tumbler our for Water, ways Honor to product we Veterans Southern Alliance quickly benefit introduced Outside, service

brand. to we have focus shift three XXXX, our we for of As areas

a we by of engagement and the reach expanding primarily product talented stories. will pillar world, strategy for and continue digital where focused are form our audience and offline brand and key Music our a is This of both between great a created alternating of a very us in-house First, platform, breadth with and unique we engagement. acquisition driving consumer example YETI on to is our depth build team.

Leon our continued we creative we in music work throughout Beastie the the Boys, example, and For talented expansive Foo playlist, with to Spotify to recently communities artists move year create and and bring other additional Fighters. initiatives Expect Bridges, curated most YETI. including connect our impactful with and reasons the highly as here

while Another sponsor, this hope stories. U.S. mean and It such our focus supporting roster of of our continue the jersey Austin and and at their John includes summer. partners, USA content establishing and also YETI we international will international as John Climbing FC to of existing League This what be season be building, expanding brand well digital as roots. Tokyo focus efforts, surfer will the partnerships, Olympics depth the developing with Florence, inaugural ambassadors also our our as Major as Soccer’s leveraging will market global

approach this a YETI business strategy sustainability product. journey, driving Finally, continue already in we part on to and and More ESG to that durability. come story This a YETI. thoughtful our to the have begins expect we appropriately of is doing, we of are an to across overall impactful clear, communicating and be with to what brand but integral acknowledging channels be our

well products. we side, launched as On products legacy strength as our saw the in from broad-based both innovation new XXXX

Growth COVID-related expanded line, even new Coolers, for channels successful quarter remained in fourth excellent our sustained across to receptivity inventory offering existing across demand vitality culture as interest was disruption. and challenged bottle Drinkware due our to tumblers our both by led and our was ongoing in the Our continued. as continued supply

best existing our our range its and portfolio. honored as YETI offerings, the the we XXX campaign Ice Presents the Health extended with XXXX. also its One Sheep. featured to highlighted These items YETI by inventions magazine latest tumbler LoadOut heritage colors. healthy series through best Gray’s Cooler a or highlighting media. of quantities across limited wide XX discontinued we In of vitality XX-ounce product Importantly, table in Roadie Journal popular earned book Hard continued cooler recognition across Men’s the also that the Awards. picks the products Pink Sporting validation XXXX our added best not with Gear color support our and product but only YETI the cooler list. innovations, Wild in consumer selected And second introduced Time coffee recognize of in as accolades favorite way we accessories one Garage GoBox of V Finds QX Outdoor discovery new

product of we our Combined official part of aforementioned the club initiatives, jersey of Austin energy sponsorship our quarter. the innovation new also shortage website. and their was during on offered around the brand with no As YETI there FC,

color into will elevated expansion. storytelling demand vitality expansion and go-to-market investment product of category expect XXXX, our this continue product lineup line support we extensions, holistic product, the showcase This approach continued As in through year. will and we

Let few a details. me give you

and with our This standard such adding lineup. Wine as were our standardizing both across lids Tumbler. sold solution MagSlider the Lowball, our Lid Drinkware for product, innovative example, are also separately that came product includes We that a for lids historically a replacing

the new many material recycled containing post-consumer lids a our We’re to of process XX% content. also utilize transitioning in of

deliver While product adding our believe to actions our of an customers make costs, continue premium to stay positioning. impact, value and in to we to our types these

tripping collection perfect prior daily buildup and launch will position Prickly bags, the excursion the three customer that tremendous single-person and extensions new larger We of line collection new also been from use. consisting our expectation piece Each And category, and market, for the time our add a focus wheeled daily also of next We a will week Granite. premium, Pear Crossroads now of believe our offer this backpacks, debut more adventurous road collection we learnings in capacity storage reflect to we home. short introduce with material second weekend of accessibility, travel the the in colors, as comfort, duffel introduction collection Aquifer, and far opportunity given outdoor-ready for we performance originally travel commutes. for of is Drinkware, a and traditional to durability, luggage, center will the From the planned on the In and half choices constructed demand Leveraging optimal at XXXX. collection to and Drinkware. and see bags postponed to continued the or design a in mind. has to

and our with DTC-only we was shift to launching for XXXX. product year build are a XX% year, to challenges. execution ago. customers growth, less for DTC-only capacity consistent showed supply than XX% chain strong of we strong awareness shop. ramp have meeting and omnichannel outstanding they business into where We a strategy, years from in of want mix small parcel price record the underscores as the holiday importance build through face the family, This extremely yeti.com five discussed full our our integrity, to the Shifting focus continuing XXXX direct-to-consumer and

focusing carrier secure productivity on year, job did work our team our center position phenomenal a inventory, balance distribution this including to service capacity. and our end-to-end Our

we inventory wholesale, brand position, Sales we’ve to remain engage business same our go-to continue partnerships. employee challenging had as supply. and pandemic, drive phenomenal to remain visibility the a job in choice and the customers, the the corporations corporate sustainability Throughout restock XXXX, to a expected accounts rebuilds time, addressing digital models, quarter. through engagement, as At into work continue encouraged have Corporate cycle great own with wholesale Our throughout their replenish seen rewards we a for we targeted wholesale across customer traffic. replenishment succeed with our as messaging. while YETI also even the efforts our outbound, needs our did partners demand We on increasing to relevance Entering leveraging we brick-and-mortar year. focused move to At partners evolve

to investing we channel focused At efforts. drive seamless in our and implementing e-commerce to forward, Corporate our fleet of invest to back our evaluating customization. remain half and across build YETI order shopping strong openings analytics, drive discipline the the this year. of includes will prioritize continue consumer expertise broad In Going to executing yeti.com, recent further operations will continuing eight in in Sales, young strength. enhanced we our experience platform, strong data against to hires stores, digital we very select our across sales optimizing at even structure service on Retail, pipeline be productive more At developing while a

our success of YETI on merchandising clear the be floor will overall omnichannel partners wholesale, fully the inventory getting on with working their repositioned, on our efforts. focus on rebuilding thoughtfully and Finally,

we On XXXX X% XXXX. the the continue mix with build in international to for international business, side sales X% momentum from growing upon of just our of to

growth Canada the the restrictions As of driver and international largest significant showed impacted wholesale business lockdowns market. our today, strong local that despite

our as rest we in In our strong executed our growth awareness stronger overall markets, given expectations this continues with business see with wholesale continue grew to of and on we the the disrupted Australia and Our Canadian Across year, planned raise DTC demand. triple DTC quarter. Europe digit to of digit triple rollout pandemic. UK, the built the the receptivity build than impact offsetting

be we to behind international Canada, focus targeted DTC creation as our We’re extend strategies efforts look putting capital and additional our and will resources wholesale In demand across and resets. inventory region. in XXXX each on

prospects the putting limited for growth In Hockey Europe we deeper focused accelerating markets. setting we’re XXXX. additional wholesale Asia, and reach also Japan of have launch. large remains of additional to to local Australia, the our addition, in language push are we a today, international potential and end our brand more we’re a the push focus formally execution e-commerce beyond at sites doors to our resources into and the XXX drive brand a about approximately developing In adding the urban our organization here. In infrastructure while make and DTC are new drive on Holistically, that awareness on heavier support we massive unlocking the National Licensed Drinkware from UK, excited we’re In League, are the and wholesale aligning opportunity Asian we markets. believe

made and hand that to, review work, I it I the dedication was. results As to for call our YETI that team to incredible want the resilience and the XXXX outlook, Paul again, over our detailed success thank

varying forward, way associated that undoubtedly that What in consumers brand. of address have take will need with in the impact doubt will degrees never and those some we we our economy, to any on challenge now to Moving is our unknowns to it Paul. over the better business. opportunity growth remain And incredibly as I’ll and chance Thanks, get YETI. strengthen a of optimistic for We again. opportunity XXXX turn about long-term and sustainable is the

Thanks, good morning. Matt, and

growth, of details quarter truly let year. Their by a me of EPS net the and efforts basis a of growth the expansion points, adding debt. my Before team adjusted thanks providing results of for instrumental paydown the year, during also in of margin $XXX million operating the begin our kind adjusted were including incredible resolve in XX% full incredible XX% voluntary fiscal year, sales XXX the for and one the delivering

posted year brand. XX% expectations the above to onto sales growth period. Now the XX% continued demand in and $XXX.X prior million the top increased for were in fourth reflect Results quarter, the on increase year our the compared the of $XXX.X strong period. net This was ago to million

while For at an initial outlook to the back to increased of XX% billion, XX% sales $X.XX full achievement XX% our full incredible growth. looking year, net sales year

see and contemplated, XXrd quarter new million the sales full for impact to grew year both previously the to posting the both period week, By to for a period & high Equipment by strength in periods. million net quarterly same channels the sales of compared As last net period. fourth to of sales Amazon net yeti.com, were and We Drinkware year. in YETI year’s the $X which DTC added XX% XX% discussed growth include channel approximately across reached and in results least Coolers both to $XXX.X compared million Marketplace, of direct-to-consumer encouraged DTC $XXX XX% was Overall, categories. Sales. last all our and performance Retail, Corporate the XX% at driven DTC

For $XXX.X the to XX% increased XX% sales which increased last sales year. overall full the year, DTC net mix a million, sales XX% representing from mix, of

updated inventory quarterly, update, the YETI from portion sales last YETI Equipment from year temporary million net during Retail. the consisted and XX% the sales X% within fiscal driven of both XX%s to Marketplace, decreased improved XX% half our growth will constraints by the & by my $XXX.X categories, and Caps. XX% Drinkware across across styles By strong an with expanded million, the more of Chug million year. not category, While the from $XXX Drinkware Wholesale recent on closures bottle approximately Drinkware X% to Colster portfolio, see COVID-XX provide was $XXX.X was driven Demand our we XXXX Wholesale Corporate wholesale Amazon XXXX. to mix channel. net approximately Coolers year. Full from led momentum low-single-digit we the our and increased global to balanced last continue first primarily high Sales by compared performance million effects in introductions lineup despite million sales $XXX.X store $XXX increased of websites, net the to compared ongoing remaining and from and to pandemic DTC

of expansion the to accounts. addition, for corporate capitalize on In consumers both and better us tremendous by customization allowed capacity our the products demand personalized

Coolers. For Coolers compared increased period to $XXX.X Demand million net XX% our $XXX.X $XXX.X to the same during & reach grew year. last Equipment across the million. million to Drinkware year our XX% Coolers sales opportunities Hard XXXX expansion category in despite particularly business beyond. on success us living ongoing limitations our in remained confidence gives category strong in broader in availability, inventory The and also outdoor

For points driven expenses by same a as percentage $XXX.X year. net expenses lower of to net points, partially Equipment margin related reserves increasing expenses basis basis sales results. Variable XX% adjusted driven was as to points shift points by previously of to sales expansion income quarter increased cost the million, full basis primarily top expanding efforts the XXX sales freight. XX.X% by Full period. XXX mix expenses percentage net points or impact our lower-tariffs, increasing sales leverage of Last strength million, of Non-variable as expenses line of faster year. the in basis XX.X% or XXX XX SG&A XXX basis basis expenses unfavorable points well with XX $XXX.X basis to basis basis driven million last increased impacts, same to our following in increased the to product higher of year percentage of inbound year. from basis net with net compared from from XX.X% XX% basis points basis & sales improvements, by income in including sales. by million, million XX% last basis of expenses from towards XXX same Full-year by well increased to XX variable net operating XX strong travel the increased increased million compared of sales. period increased as results other the to net to driven These Non-variable SG&A net the Coolers basis profit offset of channel, new XX% and by year-over-year expense sales. decreased impacts. top fourth to net XX.X% XX.X% points Adjusted to recall line mug XX.X% a XXX points XX% points the second XX.X% implemented points or sales profit sales inventory $XXX.X sales a XXX during points by million was as freight XXX XXX product pandemic. all $XXX.X million higher the to by gross as the million. $XXX.X the of XX.X% XX.X% of XX% net net offset $XXX.X cost the favorable million and channel adjusted during XX% for expanding SG&A Gross quarter net channel driven year in sales as increased of the outbound operating as from onset overall points net curtailment and reaction to growing year-over-year were of $XX of gross sales associated recall voluntary points gains company’s transitions. non-variable during the year mix, announced $XXX.X SG&A $XXX.X expanding related points from by to to part XX Full or to XX The decreasing $XX.X period compared Adjusted basis by DTC partially

XX.X% fourth effective the compared was Our last rate tax quarter. quarter year in during to XX.X%

or per rate period. $X.XX the $XX.X increased diluted net or $X.XX diluted tax Adjusted share prior $XX.X share. the million $X.XX XX.X%. was diluted grew per share effective year during full Full adjusted year, to million For our XX% net to to $XXX.X XX% year income or income per million compared

given year, our $XXX.X but declined performance. from to year in million cash million stronger $XX.X $XXX.X top-line ago plan to to a we quarter, quarter slightly balance XX% million the sheet, had sequential compared our of X, last compared $XXX.X of January during Inventory below period. as the last turning million XXXX, same improvement to Now

year. rebuild debt $XXX to chain continue to leases compared the million $XXX of fourth throughout Total was finance deferred last financing our fees supply levels the in half year’s in-stock unamortized efforts quarter. million first and excluding expect We to

the were exceeded During end the we hand net in cash $XXX.X on debt. million of inclusive made pre-payment. a payments total of $XXX quarter, the cash At as quarter, voluntary million principal of a we position

outlook, to from our than full-year turning XXXX more unique I like our provide would given Now to color practices XXXX. comparisons the historical

We expect our and year and the XXXX, channel. between compared long-term high-end to by to full to sales net XX% increase and XX% supported above wholesale target of ongoing our pipeline fiscal work both replenish our innovation

fiscal period XX a fiscal reminder, As is to XXXX. also XXXX the comparing week in

sales Within be wholesale the digits. outlook, target growth we mid-single long-term our expect of to above

the focus As across we & will continue outperform we expect continue category, channel, year. also levels improved By growth for wholesale in Drinkware. direct-to-consumer Coolers the on channel driving expect outpace Equipment we our to to slightly to stock

Looking at the quarters. in growth cadence, we each expect the the highest first growth of rate with during following double-digit quarter

expansion XXXX XX.X% expect for from drive we record gross from reflected cost over ongoing improvements two in limited level, Despite nearly our points impact since XXX in basis margin channel expansion mix, flat points will the be XXXX. more product continued favorable margins which the and side, XXX the On reasons. efforts XXXX to basis

across experience approximately back our all great in enhance to of First, value Drinkware are our our is effectively strategic MagSlider example invest further Lid upgrading the our A consumer XX% consideration the taking Drinkware gap. into our to assortments. XXXX, widened decision to starting we proposition, action elevate add and products

gross the Chinese contraction fourth XXXX our perspective, cadence strengthening the prior slightly as year, where expect be SG&A to to the face cost discussed an negotiations. year the than we some since past the the summer sales. trends a first planned the comparison year-over-year third product quarter of into and the RMB faster In SG&A, of will growing margin half quarter, positive In have have last addition, period. during we prior expect we From flat in strong factor from exceptionally year we in during

growing to and margin will gross most faster expenses channel full-year We higher faster directly slightly DTC expect sales. tied than variable total grow our

be percent also of non-variable a We flat to year expect full expenses sales. as

year. our adjusted continue in The and of Based the strategic with Overall, fourth and initiatives, growth slight year-over-year in of highest expected product we support XX.X rates these strengthen we operating quarter to we decline we earnings approximately our expect fourth last the throughout quarter. tax expense the grow approximately the million, we first during per growth and the will sustainable focus diluted in perspective, growth the by advantage, to growth year be margin quarter for offset line, given year. As adjusted compared Below combination expect to to on nearly expect between earnings to fiscal on Adjusted heavily $X.XX approximately outlined. $X.XX basis to per competitive XX% as shares momentum international contraction I’ve to data factors long-term the current generated easing factors outstanding weighted quarters, to growth investing such $X.XX including expect our development. year adjusted fiscal operating a in an share expansion areas we analytics, drive first behind the our diluted then point margin middle XXXX. and and following XX% of a XX% the XXXX. From second improvement to be balance just to expense operating XXX full the share is timing the expected rate of fiscal XX.X% XXXX in for a

technology our primarily growth, website the enhancements themes support product to to $XX million at call. reiterate an the expect the data $XX development business to optimization and of of increased support innovation. to of expenditures our as commitment reflecting SAP, million, broader spending analytics new I’d capital well In Matt to including continued We as like capabilities, upgrades to level and mentioned summary, that beginning enhanced

gradually capitalize changes disrupted post-pandemic been to during well accelerated to returned same as have First, capitalize customer are continue. we would been I consumers At pandemic, YETI time, positioned the we in that the are Recent year expected which a trends for to opportunities on have is categorize believe well-positioned now. activities nearly that in pursuits as behaviors. pre-pandemic to broadly outdoor

adapting in at investing rapidly shareholders. and on the relevance our plans are opportunity both we brand to we ensuring This operate and our long-term greater Second, match are will in. drive ultimately environment home strengthening to changing delivering while also we abroad,

do will disciplined a growth. now way prioritizing and strong call Operator? to are bottom-line execution, thoughtful the We to our we in focus while ensure ensure initiatives like taking for approach drive to this to We questions. holistic also would open a

question we’ll with Our proceed time, be is William question. your with question-and-answer Zackfia this from Sharon At conducting Blair. a first [Operator session. Please Instructions]

Hi, good morning.

So a semi-related. for of they’re questions and couple Paul,

So Tom. me, forgive

growth of I outlook, product improvements. abatement the the On cost understand the margin

I think probably just, easy the shareholders? you question continues leverage to Board well. company? else right like cash DTC And mix second, figure point. I that have returning think this You which does going level at case. wholesale, is when you I’m out for But very what what to the outpace do be was it offsets to of as that sounded debt And channel little to the experienced about the view benefit. then trying mean, the

Hi, morning. Good Sharon.

back we it mentioned So being into there on gross margin, as going the XXXX remarks in as is the prepared we product. about think reinvesting into about flat,

and while will piece a there higher DTC The in is one, number two that wholesale, to real there’s continue factors outpace is is, second percent. DTC

secondly, our long-term So every mid-single-digit. channel will less rebuild wholesale a me mix. be will the inventories, above And be it where on we guidance, said mix wholesale we as gives channel then point additional

forward our or my And other when lastly supply prepared negotiations team cost So remarks, about factor we playing the and in talking our comes manufacturer. I as RMB in going product then again, that. operations with the that’s talking into of change the chain strength as team factor are are the impacts into mentioned

And the in in about third fourth pieces. expanding So quarter margin are a talked over cadence where them, year, the there gross third those contraction of being quarter the of XXXX, we’re then the and flat gross we some rolling XX.X% in of first quarter. the from margin half the then

as talked about often. far leverage, As we’ve this

think this holistically. this, As about we we think about

to As use to we’re of cash, going debt. paydown continue

cash net We position. are in a

into year, accounts increase. go see next to and rebuild use what receivable cash also growth We we as the will in inventory wholesale

talk for and we’ll are capital, conversations. what to networking we optimal the Board about ongoing some structure but capital the is continue So to use those

you. Thank

Our Baird. is Benedict Peter with question. question with proceed your next Please with

All right, of A guys. questions. morning. couple Good

have us Is the Can That’s guess see follow-up. a if year, Paul, then now, how out them play understanding target just feel right that I’ll your kind the on you inventory question, on like First, might things progress? reasonable give lot end there? as rebuild. of the guess there’s you you best of a uncertainty first of for a my I there

Great. Good morning.

as as still see we it year the sequentially go similar turning at better, being decreases of positive then of first end XXXX. So ending although negative, into the in my And balance last see second we the we from over we inventory quarter getting roll commentary quarter. the to quarter significant

lot year, here of sitting see back positive as fourth us sales, And the slightly we et about of to year the million. say end this approximately ending we Peter, see a So $XXX growth. would I takes And today, and we cetera, level. actually above quarter the inventory into XXXX the that goes as think second through

So the of we half in in expect inventory do position. get stronger year back a much to certainly the

And helpful. XXXX. here good. for That’s bag to stepping maybe I the nice innovation Okay, hear then Matt, guess in up

Because that about sizing that? up just are bag everyday you you’re think discontinued, you Thanks. about that framing learn did How Just large curious, understand that market there with guys replacing you what from had learned from you batch. guys you items that and the do how And to you new but internally. think one, – what you a out do this certainly trying the is obviously how opportunity? prior

those was between worked really And that about into this incredible before, I’ve aiming of of we XXXX. for what morning. how luggage been design. led that from Panga a couple designs and Tote into we’ve all YETI been There’s that spent look, the simplicity And said, we a put thought them and is design on we we years have launched YETI’s YETI. and rapper. known and And been learned early has things as the we sure bags cleanliness and then design of what upon package to wheeled for and evolve but since YETI and how and those can YETI Crossroads best and our what revolutionary searching products. wonderful up products market, been of Panga reliability materials collection worthy, the with an bags material, couple those products, the we backpacks, that make in of which interplay materials. YETI and bags in bags only of talked started for We the the we robustness those a construction and Carryall one various take product for lived that builds bags were do find that performance materials Peter, a the fully brings those submersible. And my quality the made hallmark has construction durability incredible partners and a an good of our the of taking ethos bag duffels performance the with a construction evolutionary that then favorite in And YETI really to design was durability team last vendors to and with

excited. we’re So

likely talked globally it. the In is the We’re about excited We’ve States and category. United largest bags in. operated that the we’ve very category about

a of lot lot So room a we think that to grow. to of there’s room roam,

it with of does, about a I putting going behind assortment. very campaign we’re emphasis consumer to robust Like them. it We’re We collection why next think in see out the couple by the supported that should the do be we and that lot tight to launch And out comprehensive in talk put over start come thoughtful we a of important weeks, a there. it YETI a to you’ll to way.

on so forward Thanks Look Thanks. great. seeing Okay, to much. top. what’s

Thanks, Peter.

with Konik Randy question is next your Our question. with proceed Please Jefferies. with

This Corporate has Thanks Randy. for update DTC on recovering? Hi, on Could morning. an maybe update good the provide providing on performance Sales been is how breakdown. Anna an the

morning. Good

the in coming specific well, XX%. saw And in we most over So across in added the in. difficult number then about last that third we part the DTC fourth quarter it above a the the the overall, talked And as as was really quarter Corporate quarter QX have giving that into of business while not business. fourth seen, quarter, as everything we and the nice capacity year. recovery back supported was came we online by brought Sales was

So that Sales. also supported personalization that website customization Corporate the growth then consumer both on and and also in

attract and Got on about the customers, planning marketing launch, you’re Great. Crossroads opportunity on Thanks. you on how talk then previous new Thanks. it. picking – the maybe And the on question piggybacking could to accordingly? back

believe which expand, really past it’s question brand. we wider the Yes, encourages collection think a fragmented continued global talked think a I the intersection as speak and highly gives to is expansion high disciplined the that domestically, over we lot it. than larger question. us is we brand, of for believe we opportunity place. YETI the think to We a use, a we outdoor-ready the a to all great Crossroads audience, performance And we’ve us prior today, is huge globally. the also in as It with points products’ our about brand said of the halo just everyday way assortment but wider price that even is fitting have the to the gives find do us opportunity between And and market, but and not to in

introduce balance and about launch we’ve products used colorways, some the product of even the some the And the so think new we between and channels. channels to sizing, we traditional and when the that how

going we we’ve and product new what next bag couple expanding addressing and see believe our as is start rollout and weeks of we history. to you’re buildup, the our done comprehensive over most so the that the of And beginning our bag launch YETI audiences

YETI, that And So of new we in through up we start like to things and build remarks, product many said product sustainability as is family about into we XXXX this build the YETI. talked into as build And excited this build this prepared the we the we’re innovation. process. we for

much. Great. so Thanks

next proceed is Camilo question. Our Please BTIG. with with your question with Lyon

to maybe restocking door year. where the expansion of the but update overall us help growth more and of basis, plan see a with or existing wholesale you Good color you everyone. gave on great at A you’re that in door and expansion curious a segment. Thanks. Lowe’s, your a a clearly assuming bulk wholesale, specifically in job on effort will bunch you great from restocking you effort more the the the – on On that what where quarter should an and doors, restart your from morning, come expecting recharge some how to lies? just I’m Can

question. Camilo, Great thanks.

that in the the door over last expansion years the much partners. more shown build bolster have focused we and in of and points or making so, right disciplined we’re As and sure about been distribution past, and we’ve five up we we’re our

their approach half first digital year partners they really of be traffic going advantage evolve focused to disrupted on take The our evolution, is brick-and-mortar. wholesale while in and continue this to of still is omnichannel the working with as

mentioned we doors expect year, first front big doors part broad of the of open expansion to You it of a year. the wouldn’t always a but was that year? said half the as going the dialogue from the There’s don’t on in the we thoughtful close, puts continue of beginning. a a with pandemic. and some this to half we in on very door really disrupted bit rollout. So takes expect or good Lowe’s half paced It rooftop meaningful door sense Is expansion. a the the back Lowe’s, We be

getting consumer a us, wholesale, or for in wholesale, work to I we new thoughtful our traffic our buying that digital merchandising offerings And them occasion get broadly, as think so efforts helping going back consumer to either look expanding. continue their our getting mentioned, to supports to more Paul digital our And stick opportunities and as it to true we’re the we’ll really is inventory augments of, a exceptional on and of focus or a to where really returns it new But with wholesale right, year on that. right, normal this existing channel flow. the partners, brings way in

on RMB focus rising be with for suggest to have throughout specific scale you’re gross cost business growth to the offset there’s we with of the front? a partners? on the savings seeing continued costs seeing Paul, it back the factory outlook, then your just suggest just would increasing accelerated and that product see Are incorrectly? And about that cost the margin would that RMB, your room the you’re that lot going perspective that thinking with to an and negotiations alone, It are from would Great. growth you you’d that continuing the the for

Yes.

has partners XXXX. that about business. Drinkware, of manufacturing and if part been always of of negotiations, And our our So you of think up XX% was all for sheer our focus – our scale with growth our with

So is the balance offset RMB. the by that

share-in something that we as is can that, this and challenge ops to fixed if that offset. and we things of and teams So believe go look our cost some an it, into leverage nature. see of negotiate, we We that is still

full-year a MagSlider. Cap. is We into talked piece more We Chug – talked adding about the the other about we product. The the have of

are full things So the of Colster. that year these the Colster, new

mindset things that to to So deliberate reinvest that product in we dollars. differentiated where is margin the good feel of those a and decisions gross we keep these have product made use very very, are

– remarks, As said affecting and our lid our prepared in I of the MagSlider I Matt upgrade said is XX% portfolio.

going is to low a Some our of from ball MagSlider. traditional like a it cap

Something MagSlider. new material all our to like recycled a that composite that wine MagSliders a as are And going in transitioning is we so to cap well. no has from our then it,

and never investing products, But challenge giving or team product. will supply takes to the team inside quality costs our are say gross product with and – margin. continue durability in the and ops I in chain negotiations that’s operations the those So we our up puts those still of

talk you customers? evolution that’s trended you between Matt Great. the I when your your you’re purchase how – existing think the and mix you’re about seeing that more rate If DTC, sneak purchase can about in, rate new customer could one between repeat on

continue yeti.com. A like couple of see, summer and our that the customers pandemic, to the We middle really things and to to through continue obviously really business through well between continued seeing end new performed the and we’re the in of year. the yeti.com DTC regard, to of returning we the balance

rate call existing up acquisition of we go yeti.com to continue those customer and continue really of new a As trend so both seeing nice would I customer to purchase. growth balance we’re it, with that groups repeat saw what to

of data into tied that. We conversion are last we purchases. this And repeat us a XXXX is We XXXX area analytics to affect higher intelligence large rates and we’ve our capital things a that I seeing front of as of built this pandemic part mentioned think in started is it both business and year our and investment the a a we positive big data as is science really one and DTC talent purchase significant the of year, ramping in in in part trends for rates, in there continued match frequency. Paul between of to us during is it’ll opportunity and journey kicked earnest be gear big

excited what’s to continue come learn we we’re more. as to about So

Thanks Good color. so for the guys. luck much

lot. a Thanks

with Please next is question. of Lynch. with Our proceed Robbie Merrill question with Bank America Ohmes your

mean, beginning much on how commentary XXXX, implies your benefit being solitary in did maybe guidance that did Hello. got, just the pull lost COVID related we kind events, I call a how question from YETI? and get of barbecues, much for quarter. leisure forward and track with I of and are think Good the you COVID-related of guys, thought commuting a tailgating morning great what lot probably was your is how about to not, a you the important from sports YETI YETI – driven compare – and from demand business really I Matt trend backyard at that how was kind but interesting. should

we saw like on over a our also we to group has that there. behaviors of reacceleration were last at when when pivot wellness the had believe look time the we’ve between the was growing lost saw looked When year and the plus. those gained a watching from compelling think – the We and contributed what And case a digital business. exited year, to when solo our but that was the we’ve and stuck is, and would what to more that XX% seen we when growth lot, it’s small pre-pandemic think the resumption years. able had I pre-mid we the or changed what consumers health content brand demand of We really business Robbie, or about that, happening what marketing were some things, spoken of for QX March our both it, get so messaging, at year. say we home look be to the because and trend been trend was really leisure that as a last dissect YETI. is benefits outside five full was providing that directly and and and a those at engagement you XX% from flow really of the relevance sometimes messaging we’ve And at XX% difficult, is and it’s with able we down. we people our moment growth we then at those realize the world stay-at-home saw it. late QX supporting was And And to upside at they QX YETI years, early we then business on in people while with were near

world can both whatever while to reconnect that We’ve consumer normal it backyard group today. been ways. the trends – been gatherings we’ll with we’re relevant they the highly comes which way them disrupted. the So we make in back we’ll pivot to those And in like and actually operate communicating to really is and business had as sure able obviously and the the normal barbecues, in

both we are So trends. about the of at good those I feel intersection where

we do that COVID? How yourselves growth reaccelerating the That’s the are year-over-year? store How Is a profitability what you for you DXC of is like? profitability did DXC about Was it And it as helpful. overall? you, get is from pretty just great. when Or thinking see guys Paul, overall look away profitability then That’s consistent and you DXC quick for maybe isolate one XXXX? look changing? up

Yes.

corporate purely it’s question, margin just your all top Year-over-year, profitability as when think the to in of DTC nature. payroll So things if about we’re say contribution and and that talk allocate strong don’t at talk profitability, we the – and the and we to that. contribution because increasing about we we look I expenses yeti.com overall, leveraging expenses line, leveraging and the there margin,

significantly often increase And we’ve and to then So as profitability this it in our from talked versus channel. per unit now from higher about wholesale year-over-year. a did dollar perspective perspective, a the our wholesale business is DTC comparing dollar is

and helpful. Thanks guys. is That really great

Robbie. Thanks

is question. Our proceed question Duffy with next the your Stifel. Jim Please with with

your Thank start or really Matt, prior from same? of team. looks customers brand welcomed A to year. it’s have wanted And I new different statistics I’m kind you. follow-up morning related you you’ve Good a consumers Terrific curious XXXX execution year the the question insights. great guys. to guys data by with the added Do the new on XXXX? to discussion of consumer customers during more does the in of just any suggests

communicated picked we analysis of the think stayed showed historically we most XXXX. our across of in the XXXX. say of there, bit couple that, is lower or continued on growth I cohort. even demographic, meaningfully but least our good regions We in heritage up would we little pretty a Growth consistency our groups, we’ve consistent. referred consumer we of in haven’t growth, what largely the regions pretty the grow What we’ve in younger the But age age it throughout have all income, interesting strongly consistent. current significant is What as saw so standing that, to led look our where XXXX between the household markets I the the was you to markets past the up past, year, things our by a through wrapped full penetrated. longest Jim, as been in we is our tested

established of continuing and the we’re consumers the our in consumers still the coastal we’re newer with newer are us. effect get So we’ve or And opportunities brand. talked with markets about the the reach that and front communities most penetration really to we that the in of penetration both in seeing liked to

your objectives CSR guys wave maybe you bit know might foundation There’s last a doing, new I of formal your been VP CSR hasn’t Great. that than And stated little updates you been your did or then in of hand any prepared we remarks, June. a hired lot a already you’ve more report ESG for a and where that ESG, advertised, on to platform the see improvement. CSR

Yes. said and in is it Jim, a It actually wasn’t mentioned way. it we to as us. more critically you fulsome important

and come sure are, kind of go. we’re out we that what been experienced have – and you it’s command want the and want what these where we incredibly also believe We that when central talented an of taking VP building in And also to As to of naturally. to our said, we robust addition was we where done that with ESG, who’s we highly is brand make programs. both of

at said, to of focus a can function our part don’t But you as big it thing XXXX them focus importance important so level a get those are YETI. that We had it to as we lined it’s of so or we at a up us. a We brand inside a and it as fulsome look that building. communicate level to in more in is it who way. and within parcel And of area that and things look as

you. Thank

with is Morgan Kimberly with Please proceed Greenberger question with next Our your Stanley. question.

outlook on Would you normal sounds included to I a similar little SG&A sort go-forward SG&A, you distribution CapEx, Good budget, would in Thanks for beyond? question as of CapEx any much. then so CapEx bit Great. wondering expect different, ask to expect then beyond Paul. center much. of back like And higher about of you this basis starting wanted a CapEx to and XXXX, level your position that the XXXX. look I’m and new there get in be a a in deleverage we so morning. is leveraging there’s it to XXXX. on XXXX but Thank

Great questions, Kimberly.

of nature of we don’t XPLs use distribution the really direct another roadmap. a we about the So XPLs million technology that XPL. question range. $XX I’ll new And analytics, to the a have or start developing talked million $XX To to centers, related product data that and is XX% tied your of is XX% website so things up on we’re support about we’ve CapEx mobile-optimized in on lot with capital

Dallas to new from location We a in are moving Memphis.

outlook a our an the it’s question to it new past expense, is an of level? back long-term actually What some charge was that’s million. makeup. and have normal forth actually outlook in I I’m or I to than We going give not XXXX want would goods $XX a your – one-time lower so don’t of say to move was this kind long-term updated is materially outlook. To the our

level. So XXXX look out, average the XXXX, normalized and if you at you combination them of of and it’s more a

XX% perspective, is for we COVID took of the From a actions XXXX we the a is mean part op said flat SG&A DTC really say basis in And what OpEx during with approximately I that’s variable pandemic. deleverage, year faster. gross deleverage. side as on slight to see grow as we’ve XX this margins continues income, spending lower points in it So and of would lot

growth, Now, gets much XXXX bigger, as the to That’s business talking as impact about that is impact deleverage. was from basis points of XXX doesn’t DTC I Sharon counter the is much. a smaller what of mix

quarter to, and continue investing investing again Non-variable we’re in going the down initiatives, of it’s flat being about in of companies – nature, of product most third the things now went code second that in points. we quarter into analytics, the curtailment. that a lot then we’re also And to is, of in and we zip basis So cost as like growth a did XX pipeline. the data the lot

to as So we’re over decreasing quarter. quarter we of well why some and when get from about normalizing we growth OpEx to second and or we the rolling then being normalized that’s spending. there the back biggest get as fourth talked that And third in

makes could sneak just I a Okay. one quick for And Matt. perfect if in sense. That

you positioned wondering I’m product at clearly portfolio, to is look outside and if Coolers can Now, your which of expand Drinkware.

gross non-Coolers, rate faster. what those that a I’m can in So categories the other are how can And two What categories wondering if portfolio with us non-Drinkware. that’s those just represent? do performing. of share or those little out, so the size categories I’m growing categories, you much. you us imagining on take if size you sale of But give color bit of Thanks

years of we And innovation product at YETI What drive and been though legacy them. things, as What’s through Kimberly, growth growth, couple I in of both we legacy we of continue XX strong expansion, they have Coolers to consistent break those a new products. product a in growth we high by driving beyond off is, growth. our Equipment to also obviously to continue of to rate families drive our planks Drinkware but add families small & out planks from continue new and can of rate say don’t coming base is, perspective.

business, quickly, up innovation continue the other will so And while So in is, seen And families to we’ll our in and and build from this innovation. business into we’d to continue a build jumping our and business. also XXXX their and based new year smaller Coolers we have these Coolers. historical while through drive grow point have see to Drinkware high expect Coolers in off while contribution our carry traditional growth these that families. product past we’ll they very Drinkware in And you’ll off product we drive strong

Thank Great. you.

Joe Our Raymond question. James. with question your Please is Altobello with next the proceed with

behind when that Thanks that guys. the What’s sales in finally chain and in from morning. supply questions, what’s of baked XX% of to issues on your the guidance. terms rebuild expecting you’re couple A lift XX% put you, Great. retail you Good first the inventory number?

Good morning Joe.

we’re We that an in then we’ve and And at months over the be of from again, talked where the channel. deliberately and channel question. be So half this Peter’s half want the was into refilling us believe very get the back first it’s we QX it QX take of expect the to year-over-year and what take going us negative think six to and it We to to it’s positive. the really about to year, year I perspective, going of get we doing first through be. as we methodically – inventory the least to

much of from or about the inventory, down but feel good XX%. it is to broken dissected haven’t how increased We XX% we

grow faster wholesale our is DTC to still faster. than mid-single grow but said, digits, we As will of long-term going

it So a not just is our business consumer true wholesale demand driving reload.

maybe a I That’s And a the commercials of over NFL network maybe follow-up advertising, lot helpful, you. definitely thank maybe in second of on terms noticed just, just Paul, playoffs.

like, the XXXX? of what XXXX maybe looks sales curious as So a advertising budget percentage versus in

QX sales would exposure if We about, We that expect bit some about think Again, to your point did. were in a we would exposure creation great little the absolutely up back XXXX. spending in that in strong to the of We do always moved quarter. of what and we’ve you QX. is curtailed second Part we strong, had we throughout very is even though then to we but under curtailed of we with what you demand the digitally, X%-ish in top talked us come to the And some year. it about, we and it expect QX, it line. the ramp call as back finished great as

below So that we of ended up kind percent.

expect approximately would X% back in go we So that to that to XXXX.

Perfect. Thanks.

Ladies session. and to question-and-answer we to have end gentlemen, the reached Officer for I turn Executive Chief Reintjes, closing the Matt call would back of like the remarks. And

a Thank in. you. XXXX for today. QX come forward wonderful to us speaking everyone look Have day. thanks And We our results when joining

today’s conference. This concludes

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