YETI (YETI) 11 Nov 212021 Q3 Earnings call transcript

Greetings and welcome to YETI's Third Quarter 2021 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 call over to Tom Shaw, Vice President of Investor Relations. begin. may you you, Thank

Good morning, YETI us discuss for and third quarter thanks Holdings' joining XXXX to everyone, results.

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

of detailed more our on otherwise, or refer For no update as please to required new information, as We except result statements XX-Q. recently the obligation law. report information, risk quarterly future forward-looking factors revise or today any in events filed to by undertake most made Form a

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

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

SEC I to as call Matt, the remind Day well turn I Before Veterans holiday. to today an everyone over want that as is

to available turn for will our anticipate earnings we X-K tomorrow. the Matt. press that, be that such, With As I'll the call over and release XX-Q

morning. Thanks, Tom, and good

recognize a all Thank you with I Veterans Day, and and our that all veterans want begin, served, YETI. to moment take I your for at particular in being service. honor here this those Before to

signals and portfolio. a brand quarter commitment customers' demand drive the real by relevant in to our Turning we disruptions, we to demand our brand and product YETI, and strength now supply the Amidst innovation YETI continued support in third to deep strong with product. the delivered for connection persistent our

drove our very in investment future configuration, growth and strong the these on connections results growth year-to-date designed a of purchase last years XX% These we As year categories performance are delivered retention our Putting high XXXX performance; well acquisitions, highlights, margin, channels. delivered quarter XX% operating we've provide as is an digital to three all and third our Shifting the and rooted QX of brand our growth. than channels. products of our relative customer we level in same XXXX expectations period exceed of was across up and to and better product for and aspirational XX.X% context discussed XXXX. relative since EPS XX% we and in inspirational adjusted the top storytelling QX ago, in third remained line balanced up top impressive which come adjusted planned to quarter On across XXXX. IPO growth to

dynamic want this supply I look a to growth executing provide at into diving Before priorities, how and our environment. we're very strategic closer chain challenging

taking not to settle alongside quarter return possible global mitigate fully will out, and in While we actions or current partners our exactly into the do know normalcy our operations team to are when disruption where XXXX.

reports in Vietnam. COVID-XX of to with Let disruptions me start production

government soft discussed one resulting quarter, impacted last late September. of week coolers the a shutdown nine originally mandated closure through suppliers we in As our

the of past We relationships XXXX a expect sales. local we and the in incredibly quarter supplier coolers we our on ramping team over production the planned existing resumed with expect on of region, negligible years, tight portfolio combination rest our our full partner, in worked that our the channels wholesale capacity impact supply as government three QX current soft net has product and working innovation. to supply Our redundancy and with the the focus support direct to factory Through benefits closely they is local coolers, XXXX ramp offset have new reopening. leveraging currently into through of soft as and built products to on production to suppliers disruption product our of continue to and our

port challenges and As any it faces same times, driven the costs XXXX. shipping plus seen YETI freight rising extended cost throughout the impacting pressures transportation broad-based relates to delays, industry, by

put and and from a Our third availability landscape the in we at position near doing is the resulting don’t supply adjustments against the freight increased a easing. to we this to YETI best The quarter pressures and evolving product demand possible expect fast are making cost or team nice cost in term job to seeing. staying see close maximize

efforts our mitigation our fully So team is the on in managing focused quarters ahead.

our across procured for products. suppliers inflationary Finally, material seen have our key pressures raw

been has balance kept able limited year. year-to-date been global many This this us to as leverage has growing we have impact standing our and to in our strong line with our savings scale financial more cost suppliers. the key much us with However, of annualized

year. While supplier expect partners we with come costs to our closely back do input these pressures work persist into will we rising next

also our are analyze we demand we price of YETI. the to the short-term next strong cost we products to believe strong for long-term only will increases factors year, to into expectations pressure offset some are cost help of implement that believe next Based for strategies these the on target planning above XXXX we in persist. continuing continue that we key our headwinds not are but various strategic As develop the against

disrupted will sell environment, strength. our incredibly resilient and call. quarter these more strong this fourth on supply through color with customer with Even chain We omni-channel our consumer remains actions showing demand provide in on specific

attention some growth Now efforts I'd key like to brand the turn our of during to quarter. our

level product spots Infinity traditional Pools At amenities we're Tenthouse cross included products to to Back on effective and And Travel, category of showed outdoor and This campaign Coolers brand in product storytelling that this such travel Take saltwater our the Drinkware. marketing, combination second with a active face a continues started delivers Suites, formula launched rock consumer meaningful from as the with digital YETI branded travel and a As YETI on to of doing an travel multifaceted blend exceptional from wild. resume, connections works dubbed re-imagine brand YETI focus to of considering engagement. flats be Bags focused a the XX as pursuit. hanging for that side we that of

archive with create that a Travel test journey the earliest leveraged original our consideration, our very endorsements featured Tundra, first we audience ad history content social and and also to for the Bear and While on brands of celebrating our Take to Back pass ambassadors. the series Grizzly opportunity focused anniversary. We connect from our our founding, reach to used the XXth

as that also YETI in community We back brought hours very This particularly Tundra the launch. casting a of within special in angling cooler of was a out XX edition retired beloved platform. run special a colorway sold

will today in families tumbler limited $XXX,XXX benefit As to to week mention donating Folds for we again sold cause. it and Veterans edition out under to Day sell members. fitting with of This once the that limited disabled YETI of be service partnered this fallen a Veterans of hours Day, seems and is XX worthy edition Honor last

to seeing for in and grow In Brands is selected honored team recognition the doing expand work addition to We our to by inaugural That list the brand, the were Fast consumer it. of Matter. its we're be receptivity to Company

their numbers, communicates engagement this achieved and mission Beyond featuring authentically relevance that brands just and impact recognition branding on that social focuses have through cultural ideals.

upfront late range donation third to quarter, August, each This few are we years. separate We breast Casting our the fall pleased YETI and giving marketing Cancer positive with also Olive products colorway and favorites also in latest Extending the month, This Red cancer during in while highlighting [ph] launched brands. reintroducing elongate older overall the and launch to our fans execution early in colorway. color the effect newer Starting early partnered with the of release. with Harvest Sharptail approach before of conjunction support the in complete Highlands a supporting of we have also we for inspiration evolved early proudly and product Pink in included of marketing Taupe for October. story Recovery, that and the October colors, in and of and opportunity awareness entire past color in August five a had featured revealing a organizations This unveiled behind Sandstone story collection Breast each support launch great for with integrated Boarding new September.

Our mugs were reintroduced XX ounce sizes. XX in released and travel

performance of grow very the in with start. great The product for to further which with and luggage continued Camino bags, Rambler Drinkware bags versatile beverages our version, availability portfolio particular improved business bottle XX-ounce quarter. HotShot awareness tote of extension is this YETI we demand XX-ounce Rambler Overall the bags performance incredibly supply to Our durable pleased our backpacks. been of exceeding the our consistent for and lineup strong continued targeting also provided products. expectations to bottle a second our in sales XX-ounce We've bags and product. as to and new is for our in off entire large a capacity great released generation hot consumer receive ratings In

demand our remains and Finally, robust. soft coolers hard

expect core improve will drive in across and positions Our colors we seasonal channels to flow helped QX. of the quarter color being inventory

will continue work drive in-stocks product across family to move and supply the into and improved Our innovation as XXXX. chain evolution we

customer is Our and excellent on the focused finds when being where channel strategy us.

represented during Our mix quarter. XX% sales our DTC the of channels third

This year-over-year top Overall, the underscored year-to-date on which and year's by through personalize strong generated robust to retention on head employers the product and regions. quality business and see largest we're remained to great revenue of as of customer resume new growth office data Corporate Our customer. customer DTC supported the per our in yeti.com strides leveraging our in is back making across rates, are the analytics percentage sales performance last we consumers employee gifting. and acquisition strength, by gains brand our overall growth data journey. increases focused double-digit base of

sales vertical store of spring, structure In addition in YETI plan and well finally the experience to we market as our above merchandising. retail on of success implemented owned the the execution performing we the focus structure is heightened outbound

store in and Within successfully with week rebuilding Last layouts the we approach, opened improved fleet in total Houston expanded excited in and to our to are we bringing and implemented XX. ninth QX on Garage next merchandising Scottsdale Arizona Gear wholesale, are we inventory. destination. location During focused our debut primarily week store enhanced channel

with We we We replenishment channel our in wholesale confidence follow to demand stock saw closely new efficiently and assortment great suit. shelves, in our on and are optimize flowed give we partners see to as through performance response us Moreover, merchandising. product partners their sell-through on our when fully to in merchandised, we're continuing work. working focused

are quarter. to including reach footprint footprint independent the the undertaken for of actively five with the managing reduce the work this we've experience we approximately choice consumers wholesale quality provide wholesale our evolutionary In also efforts YETI past highest to We XXXX our and which our to for years, made is accounts. past

not of remain that YETI want the builds align upon our financial we with of allocate we our with will part ability opportunity international inventory connection business. and on consumers. standard as assortment strength XX% focus of a with rest this Yeti impact and partners. the merchandising, our service. U.S. material to an our strong efforts the integral of of to mix drive I significant will distribution have brand of action reiterate is While the the cusp network international to as our wholesale sales on a even accounts high to remains future This reaching wholesale and

where excellent focused showing developing consumer. customers. for demand as presence and have also We more while localized global see interest reduction templates high both markets markets we to is well Aussie the even position summer seeing with with the are the we replicable success. great momentum fulfill as are season Canada, this globally, resonate operations important are to rates elements sustainable which many playbook, COVID leveraging will and we replicating drive with an Sydney, a showing Australia for and are success In and many the of time rise. such Melbourne Australia vaccination COVID-XX are to on how remain and and U.S. beginning elements the expand of delayed normalized Brand local active of to restrictions in the YETI momentum in reopening. Canada

and doors in We consideration. brand still this localized to are steady projections UK, our strategy is drive awareness sites further significantly followed in our wholesale market. Europe In outpacing increase led go-to-market by and a e-commerce by

now in in XXX market. region, that are activities We cater over relevant each locations on focusing destinations to the across consumer

first approach Farlows fishing started high in may given as brands recall, enthusiasts. ago a announced the standing for when natural we its door country you our region, the two years fit this As for sports and wholesale

on locales. have openings audiences more Newer focused diverse and

London the curated good destination influential goods in in in a outdoor selection of to hood modern a For Devereux street [indiscernible] shop household offering products and Munich.

reach out YETI the team advantage As our grows, take are the of actively brand opportunity. building we to

ahead. call to emphasize Paul, hand we I are where points want As the over YETI how to approaching is about I as and think the road today three we

the First, remains strong. for demand brand

opportunity. is and seen consistently merchandise and we servicing wholesale, when have that in demand a through or corresponding as demand. inventory omni-channel remains We DTC in whether significant Building there flow well, focus a velocity

impacting comes time that only a sector. outlooks but In YETI, the while variety line pressures are mitigate we ongoing the in broader taking proud without external a this unique we that our be truly goes to delivering with consumer impacts. appropriate to on top of for it environment bottom actions goods and Second, not operate saying year

and we great capitalize to beginning. on like ensure Finally, globally at foundation is YETI and team customer now, maintaining over remain diligent same harnessing brand ahead. relevant exceptional in stories build building highlighted we on deep culture the products time, telling and are this the the how focus of The development that turn I Paul. call And to the engagement we we at At the and scale. I'd opportunities to

Matt, morning. and good Thanks

of with a start outlook. the our review year the me our third followed updated balance by thoughts quarter of the on and Let

the increased $XXX.X open questions. period. then to will Net XX% your million the prior We call for compared up sales year $XXX.X to in million

was and compared annual our million $XXX.X to by As well Coolers own to driven quarter followed compounded Direct-to-consumer period in categories, XX% Equipment last third to rate of XX%. last Matt net two-year same grew strength strong compared the in generate net $XXX.X highlighted, and both to this period corporate Direct-to-consumer XX% in properties, and an as performance sales impressive for both year's the year. our retail. sales of the improved trending Similar our across growth Drinkware and performance Equipment as million Drinkware $XXX.X digital quarter mix year. to was our Overall, our driven net Wholesale and million million the last year-over-year. XX% and to Wholesale DTC, last to increased sales categories. direct-to-consumer to increased sales compared by XX% now higher YETI wholesale performance inventory Coolers $XXX.X throughout year. is growth

ample to We sales By year. by Drinkware compared in-stock increased $XXX when $XXX.X encouraged strong demand consistently replenish the a remain million fully have ahead last net consumer category, to assorted. we work more channel, million and to while XX%

the with the broad-based We Drinkware pleased seen with continue well to demand as have be as and we our customers. corporate customisation both across portfolio, trends yeti.com strong

XX tumblers further vitality like as seasonal seven adding in the heritage our have by our market. the more Rambler years products continue as We the product items enhanced of extremely well we introducing same after cases. strong see consumer been across offerings more broadly to our building see remain Importantly, and time, and demand such features chug lids caps. use MagSlider effective colourways we perform At

increased to more two of hard the of these year. soft both with of limited period $XXX bottle, coolers. million wholesale compared coolers remained supply last in the coolers QX. During outperforming, to travel the given the further Demand Coolers Rambler for to sales XX net introductions hard hotshot the soft Equipment, which and during $XXX.X and early million quarter, the efforts XX% same strong third the latter the bottle, In Rambler XX included channel mugs, and expanded

by to with coolers of with Our Canada, Flip existing corresponding $XXX the new opportunities led has demand a remained and strong We international net combines YETI's to quarter seeing net or about a performance cooler the a of consistently given the the line the Australia, expenses million X% million million $XXX in compared of strong spending were to and XX.X% same as performer, sales of our functionality XX.X% Europe percentage in increased of total net Continuing compared Gross sales. of non-variable $XXX.X Variable XXX to across the points category consideration our which income million been backpack. to the or third net Camino to U.K. with driven unfavourable by higher only expenses $XX.X operating same XXX XX growth building XX.X% BackFlip related million, which bags, headwinds COVID-XX sales the beginning the focus $XX.X of the drove points net period period start as GSP to sales are other the from customers excited net the driven basis time XXX basis dynamics remain soft period. by cost period million a points of product XXX or third sales last on uncertainties versatile offset soft from Adjusted in freight, sales. year. the normalized points, compared same and These great was a marketing the following driven points year's XX XXX planned also last existing $XXX.X contraction of we percent of point expiration sales compared and partially our to a XX% XX.X% operating same launch. SG&A $XX.X points adjusted sales the as margin impacts. last to or improvement. sales to increase to growth representing increased increased profit Tangle by our basis by Compared year. primarily net quarter The supported At period the program X% points. XXX increased expenses at is duties up, overall from for were of the improved basis or line reductions basis Compared new year. by net Internationally, off as basis expanded all sales XXXX, its a expanded XX.X% to The but sales expense points grew year-over-year basis basis points. higher not basis XXX in the XX% net same tote percentage response lower line. flat of higher and of net margin to reserves following XX% crossroads August expanded the during and Adjusted was more the XXXX, coupled inventory year, points to million contracting of in of factors; inbound period last net XXX in from during basis gross in from XXX basis by expenses, same XX.X%

tax reflecting $XX.X benefit Adjusted period. income $X.XX in net during compared third was rate XX.X% $XX.X last effective to quarter, share discrete the quarter to rate with income a per the year X% compensation. a increased million million share prior diluted Our per stock $X.XX XX.X% to or compared lower year's or in diluted tax related to

turning our to Now balance sheet.

year. Our and $XXX.X two-year line Inventory third growth compound $XXX of the with increased year below quarter million in to ago same to to last compound rate basis cash growth sales the XX% the our in expectations to year period. during position million compared was $XXX.X annual a million annual on compared growth $XXX.X XX%. quarter increased Inventory XX% million

in fees $XXX.X year's rate third than at from chain to quarter. higher leases financing disruptions. planned inventory million unamortized does debt, ongoing last lead Total of transit the deferred $XXX.X million include inventory, finance the balance extended compared Our was end and given of excluding a supply times

$X.X quarter, million. principal the made we of During payments

basis for we expect sales and are fiscal the compared outlooks our was negative to year, increase our top once now to as in to performance full higher XX% XX-week We and raising an again. we year third impact the net full in fourth point last quarter year XX% a As year's updated bottom-line XXXX. This outlook turn quarter both between quarter factors approximate range our the for and from XXX period. full upside

of higher flat pressures. continue assumed year. last nearly margin This from and the we level contraction expect impact greater record strong fourth to ago comparing in year level for year to where very a full gross XX%. GSP the quarter XX.X% input the against Expected We inbound freight cost remain of period headwinds include of the the expense, margins year-over-year are non-renewal

we Looking trend below expect year slightly growth expense below dollar for growth. at revised expense sales to total now our be overall growth SG&A, Non-variable to the sales expected growth. is slightly

gross line our channel While directly tied to sales. higher variable expenses with faster total grow will and direct-to-consumer margin in most growing

the to the year-over-year For digits quarter, SG&A growth against spending in as period. moderate single compare adjusted expect to fourth normalized more we sequentially continue to we ago high year

a amidst will focus fourth driving of On our $XXX continued of in driver to the this and channels. replenishment be will elevated transit key now diluted challenging efforts, build diluted now income the the to discrete adjusted our earnings for to our our satisfying of in million, expected million, a ongoing the XXXX. $X.XX As backdrop. execution XX% year across benefit on tax $XX.X sheet, outlook impact year. approximately effective to year restocking inventory $X.XX be XX% strong fiscal in This increase Based inventory in to efforts XX.X% full result chain compared result, $X.XX continue and full we outstanding in to experience in reflecting fiscal continue quarter demand tax expected quarter. our planned The on XXXX margin the operating approximately per prior to is grow we of is rate to given build of to will adjusted XX.X% all expect supply balance XX% third believe to to the better compared recorded shares we the between time. We in share approximately approximately

expanded $XX for support and data of including capital expect as for to capabilities, reflecting upgrades, the products. technology well expenditures optimization to and year, for full primarily as $XX increased continue product analytics million spending existing to million capacity enhancements to development We website SAP,

of to unrelenting believe ability demand, team I as incredibly manage Q&A, which with proud on the the of focus I all our momentum reiterate and our product and and XXXX. starts into of unique truly how environment. external like ongoing planning work to of finalize will of our engagements and this brand will turning both remain next to which first am we high, This year. in incredibly support would Before reflects priorities we execute through It nearly remain mitigate the our adapt, complexities also for driving headwinds, holidays, our

to throughout both our the a Our to your ability questions. With the the raise top and this year like tireless to to efforts. bottom team's line I to over now call consistently that, is would operator outlooks take turn testament back

line Our Instructions] the first with [Operator with your of Ohmes from is Bank of Please you. proceed question Robby America. questions. Thank come

of or should year et guys. I'm that how how or into sales asked to and should half you how you related pull has and dynamics? think the been and part all think this XXXX and of there you saw about last benefit to years any ask talk leisure of question the lap quarter. going to forward of cetera, Hey, in about well, solitary we to we you if first probably good Thanks. get in year maybe that that those Listen, you in two that Great time. about morning, demand Can XXXX, think look the a guys as us stimulus

really question. think we've YETI combination public said I marketing about consistent as through Great is, through we continued seen said we would of existing think is through drive What growth. morning. year-to-date quarter-over-quarter we And engagement. years all outstanding a and and say demand company, products product XXXX consumer three a Robby. to performance, we innovation, if XXXX what Matt. you and Good Hi,

there And the don't awareness, we stories. performance really it's wholesale performance so, of a growing out channels, DTC great we consideration, the partnerships, stimulus think YETI from we telling of the product the discrete growing thing, when about our of benefit discrete good strength then our actually and putting to and think attribute the

talked And to we opportunities, with that supply of disruption to continue we're saw XXXX, we've some continued be that continue and As to into the our XXXX. chase in something demand we continues and expect about, to growing XXXX, happened. of one it's in that started with the that supply we

quick thinking could in then really talked see a That's rollout, helpful. supply Canada issues, the a where either about, Australia, like follow chain China related And some related well had but sounds you you reasons? things as and of I are about for that, up initiatives going know to how it other place you just supply are and to delaying the are international you or that

pacing growth Yes, foundation. the I great our would in a say, sure international we're make build to and that we're we're supporting markets

the the we and on the of and we're days in So in has prepared And traction the remarks years biggest Europe last talked over success the seeing kind been we're UK of expansion out. about there. and still couple that the early of building

advantage out the some internationally we of to we to rest opportunity an the as appropriate going of think and build proper as I infrastructure out it's remains availability of build of and take way. supply, in that be go

at on the all international really markets new our enter to we're then has It's changed has out, pointed in the fully sure expansionary do with the just making you a way. timing international and in and we can market, think supply don't really today, markets I as outlook opportunity. supply timing the our So domestic successful

much, That Matt. sounds Thanks great. so

Robby. Thanks,

you. Thank

Our next Jefferies. Please proceed questions. coming Randy your the with of line with question is Konik from

doing And you're just around bit up setting support ready give some can to on to infrastructure, give and international, distort you terms infrastructure helpful. there. comments what Just with more we your us dollars on elaborate talk those markets I where now just then about accelerated Matt your international, just are have lot. levels and some, flavor to just regions? sitting maybe of a follow in thanks just up Yes, getting marketing right a little super those more in towards of our awareness for want started those on more Thanks. some That's color your markets international rollout?

say awareness strength grown. has would in the on the newer on Canada UK, it's four I Europe earlier those continued I over has the Randy. much Awareness in markets morning, markets. would grown seeing years these still calls. say awareness, Australia year-after-year, stage. in last you're low Good In and significantly and it's about talk significantly we international the that in

relationships, the present. like even a actually that things operations social a brand present, of ambassador that benefit internationally think media, do some that global it, flavor are events I is today commercial to to brand the building our have have being led we our of the before

think in early and the the of So we're Europe that. days, seeing UK, I in benefit

I with of five, the think some awareness the going back the we've six it's the expansion U.S. is opportunities we the of the the there of pleasantly of amount in upon. there ago, days brand. that early of to years regional which like been on awareness But little a street build saw surprised

awareness, our partnerships. is ambassador driving focus endemic our so efforts the also now and kind broad our of on through event that brand build based and And tight for we marketing really relationships

strength real see really opportunity, early early there platform to and a we upon. So grow

faster presence, having use relationships our connection our was, to of with having relates expand partners. things we instead build of wanted having of that a of wholesale and a and the out distribution We to partners As infrastructure, the ecommerce marketing and also kind YETI direct important infrastructure. and one it believe that own we internationally decided direct was direct

really cost thoughtful, do also effective way. in we but it so, a And

our have markets. built support XPLs, we in we existing So our out XPL

it's advantage business, help and consumer where out drive ecommerce all the engagement, marketing smartly that also of in three We model. We one can building and the that's ecommerce to our our further. they performance in think scalable that then and cost We team we we so expand a effective it's the a have presence, one has major but we think as worked now take both replicate regions really model look backbone. operational that

to going That's talked increases or for costs, going take just super think then And to you're helpful. about pricing, offset Paul, into next up, you maybe price following I year.

shift, [ph] thinking benefits the amazon.com. there's the yeti.com can you're within freight continued mosaic part the EPC give that us just about you're getting of ways some increases, kind year from shift what from So EPC but around more towards you

guys partners. volume you your get benefits think from continue increases with to manufacturing I scale

So think to just giving heading we're maybe year this guidance, to some ending obviously year? Thanks. towards as of think that end us some into the we're about us year, just giving as mosaic this next things give of but about without

thanks. And, big to use word insight year. of and levers, morning is Good back, give absolutely for Randy, we'll several we you years, the items report as our just about. hit give process And are we XXXX talked we've done the the you in an as next quarter planning. a outlook are last more all you your mosaic we fourth that the to But earnings step

into costing to So the and have we year next Input and year the the a rates next continue or year. costing, average DTC with pressures full a inbound offsets full we channel continues GSP freight channel year mix. expect price GSP then of the

offset to morning will So that headwinds. those be talked are those, pricing an obviously, the Matt some of the about this and levers

the through XXXX. we and levers going you've were planning, right in managing, mitigating driving that plan hit at as for the we're things So our looking but right

guys. Thanks, Understood.

you. Thank

Our come from Lyon of next the proceed BTIG. questions line Please with questions. your Camilo with

Thanks. job and excellent morning, guys, excellent, really Good execution. great

line XXXX, further up about foresee brands? and think As it in lot in that level step high we and you've both generating. a investments the talked seems do investment top but international you cadence well a international, managing domestic you're markets markets given like about Matt, the those the you're and Paul to the And

a approaching see so year or context, mixed level line be with necessary very margins go this term this investment where EBIT XX% in of You're long top can generating that's up margins you're perpetuate to benefits And in continuing in there? the we margins luxury do now? to that So quickly. stepped the type

I'm opportunity? So do think how margin about curious, the longer you term

take of and have, and we we I’ll on this it really and with with global Camilo and dollars. can is, of think brand. take front we dollars powerful Yes, years to which really brand investment consumers, can from relates our talked about brand, as marketing driving efficient that connect I those deploy an to marketing shown peer-to-peer the effectively tool awareness be reference. And What effective maybe five, ago to most six create the margin expanded emerging is we've Paul question. we've would And consumer expansion. products. the I a YETI We and half with we seeing and continue our demand but another our our a more just domestic we're consumer that, benefit of YETI about international expansion, regional And say power the the don't, not as telling the of the recent

we spend our be with spend marketing brand a the we that and drive So we model efficient in the lot and can really effective our here and replicate of and U.S. had think

operating the for asked And Good margin at we the holistically. up On that strong. margins. P&L, say and margins, is morning. look and down incredibly to want P&L this about, And we gross demand and on OpEx, margins in I would really -- brand you

and continue. expect We that strength. build feed that we And will it strength to into

this where So as gross We all we've over approximately think XX last year. the the we're with operating up overall about points year, is last be updated Throughout basis to incorporated margins we're we year. saying flat with year this of that margin headwinds roughly happy P&L, ending outlook the would the year. morning's really started

management of you what team from that give think give quarter next the and fourth continue is balancing of XXXX P&L this year drivers seen report to you've we'll the as I when we again earnings, expect this So for outlook and I that. we our into holistic

diversify quick costs to are more partners or able base That's could if out wring to the adding but from you just more on existing to have deeper going a partners chain, I perspective continue your great your factory partners, you so follow with of you're that are savings? up and factory your supply

Yes, Camilo suppliers years deepen last been demand volume that a the also our And ago we over to and growing and on and geographic with the five that journey tariffs leveraging of driving this of diversity diversity is it's while the both. really growing accelerated of use, both few years we've really relationships.

So of them outstanding and what focused really, we and job really have the opportunity is that's our on to done both team of. an has drive

all Excellent, best. you. Thank the

Thanks.

Thanks.

Thank you.

Please Our proceed Sachs. questions. of with from questions Brooke Goldman your come line Roach with next the

your little strong at talk marketplace seeing through overall partner overall from a thank sell versus you this bit insights strategy Matt bit you're follow talked so assorted, wholesale very bit your we where Can the when you base doors level selling question. that fully be by is today? partnerships? then that up more trimming XXXX remarks in about or of much fully you here, doors, you It you. in prepared your you the currently and year? can wholesale percentage should little any talk location be about to the across given and the doors you sales gleaning velocity the seems like of end to a are you've assorted update little about morning from that perhaps the you of prepared on And your of inventory level Thank the the to close that might number a maybe our wholesale the doors. taking where of Good independent remarks a for about and talk of

and the take end. front I'll Paul will take the Brooke. Thanks, end back

do said the are as in point partners YETI wholesale with important a They they do the my consumer. anchor us YETI our incredibly of and relationship, great to the they're I products, anchor really remarks. engagement wholesale the On brand

build seen the also that we build to our way. that partners strength up invest sure continue reach. we're best best really supporting we and behind want make is have we there So partners But over right time and in invest to what the and our right and help we have

transformed it is consumer say identify shop the continuation Paul's the we've really channel, omni so, and to as brand what about and is the the with go and partners the best stories, out been keep they for would of and five And gave as as has to chosen in merchandising presentation, how them on years, which doing in the have opportunity I the talked a the just stock. evolution we them across accounts, us last plus business has tell also work

don't I so, our changed strategy. think it's And

and And I think it's remains and we're expanding an part of an the part the our strategy. important important business brand. it's a wholesale continuation internationally of how domestically

prepared making an year, so negative inventory after and we we're so quarter-over-quarter quarters the remarks, quarter, I'd this And from all into the of this restocking our was say as of through, is two first inroads we've XXXX turned inventory talked sell in we first returned year-over-year positive have channel. our positive,

great of problem channel headwinds one strong the of demand. have, restocking One is is to a -- of the the and this

as merchandise there soon as selling through. is we So get it the

sell consumer sell through a we're have, through the to there. So problem and stores that's demand chosen customers wholesale the is again so restocking great it to through, is customer as sell

customers. in You about really against category. what fully our I'll stocked? way is asked answer against a percent little that not different different It's

had constrained So hard if I category coolers. talk our in of said most hard coolers is be our you customers they surprised would if enough they and to any

continue will XXXX. channel inventory wholesale build to and coolers throughout or inventory hard So

best replenishment than in stage. but Drinkware coolers and the still then Soft is better constrained hard coolers,

So our But inventory based to by it's remain the of expect this do year. demand, of through really maintain end about It's would channel of the now on And we the any to our we assumptions expect end inventory categories than the cetera. all positive particular customer. less year. et

Thank you.

Thanks, Brooke.

you. Thank

line Peter questions next come with from with questions. Benedict Our proceed your Please Baird. of the

double-digit driving a into Hey What's customer lend on that but could to a that, in your remarks, you I guys, wondering and little just per mentioned maybe driving increase context revenue good just on during that? and prepared dive personalization guys deeper. around was and have you customer morning. efforts, Matt, what's know you detail working been I if retention little that

customer pretty acquisition customer customer which this we in data, look add significant calls, good excited seen we're it what have we've a a And it, seeing over a what last was growth actually our enough acquisition, talked data the the as year, like. Yes, where collected potential customer rolled we're, opportunity long we've And as you customer we're our few now, at makeup year. analytics incredibly year we we of times acquisition. intelligence, looks last then peter. on as and these really work of the on we're over year's excited of data about in Absolutely a in period

gets higher driving we're intelligence rates. acquisition We're as comes copying it big retention we've these seen And volume on So continue, our the -- also better this as in. side it.

the in you with side, combine you revenue double-digit I that retention then and as the out So in rates, that addition increase acquisition to mentioned called driving we're then strong customer. per which

funnel. way. whether smarter data And about then So it's let are that understand really we letting those and And just data inform second, intelligence combined we've around driving our us our performance and continues purchase on team get the and the to and from allowed really and let's make really formula. customer to marketing, lead the to smarter we're that, new get is directing next focused acquisition the to we sure repeat buying third, -- data more like. that likelihood it's sure looks nice our drive patterns, that it performance buy efforts a perspective, with a what making YETI.com in What been retention our or marketing to the customer granular purchases

repeat to experience how of and using us funnel really consideration to data then that YETI of the it's help retention in the came balance and to the with feed customers good top the acquisition. in and using So a

the just there? on thinking, of That's end pace the as year. friction Paul all in we And how this that's are was the Kind supply improvement the better the impacted you, seeing cadence then at think of innovation And how chain are been into given of that? think helpful, has Where inventory there? XXXX, that I I all just guess, about getting looks as we the out than thanks. of then million at $XXX anybody kind the the I came guess you year front, or

I'll So question the overall. start inventory with

talked wholesale continued channel approximately and we've the Drinkware. the year-over-year over of our in our will increase end in said, the the similar, inventories as said transit category quarter was as that's $XXX you the expand, XX% transit. million, at So sheet as about year, we of to In healthiest was balance well. third And it be

as then year, as Drinkware But of a hard So be coolers inventory be at center will end a next there roadmap that talked much shut transit hard from the and distribution if coolers the We to out well. Overall again, look in our disruption. impact had coolers to issues. question, then in. to for go year they about chain as been of the I year supply -- we come our on very lot of healthiest, hasn't Vietnam expect innovation, and next direct down, soft from but your has fast being little

hear. to Good Thanks Okay, so great. guys. much,

Thanks, Peter.

Thank you.

Our next with proceed question Please Sandler. is coming Piper your Keith of from question. line Peter the with

the May sales sales drive and of are be existing up guys. you're brands be that customer some you it changes, even great of that results focused. gave new Apple a sales, some does I overview customer but seem to digitally the iOS at analytics Peter the to on privacy impacting nice thanks, Hey, of Matt, follow on was data question. Benedict's using curious to first DTC

just topic, of on you the eroded guys and how are if and has could navigating your any advertising change So hit that it, metrics? you

a we saying, focused on domestically have goes question. importance the is Peter, team Yes and the for highly or obviously of that's And It thanks privacy without it, utmost data whether to us. internationally. but

that's kind to So of something us. an that's and of a important area but given, really focus

subject are changes. the actually and to iOS we the relates that tools privacy changes, As to it reliant haven't on been overly channels those

been disruption. So acquisition we've It's algorithms allowed at have through our kind real our we actually of when data, our to haven't kind us we our of teams really that retention to roll that. any build and of seen to able analytics leverage for out first-party look -- continued performance,

really come been with we've pleased So together. way all the it's

and idea Maybe gross roll these And you of helpful. as categories us some QX of that and beginning That's on just to the to you the could financial prices pivoting some which in we'll QX early increases? pressure would Paul price question guys then in? margin call. around raise going you're see to to is, abate topic, conference color by will a look this for that more maybe the other mentioned price increases year, give the the Okay. had the But hear

price say think at any attacking is levers went working the our rest not the and would we COVID after And to rest our those price price relation look it's We challenge broad-based most how is of importantly, and we and portfolio we in and that our we the relation in Yes. things look the in business, changes days coming. we very innovation And just do than not offset. to fundamentally a targeted which we thoughtful way P&L. have our and the of and way as I with about way have it. tariffs act look partnerships different we across of way really are our about product disruption, of an to with through on we the at one all the the new we is handled early starting suppliers

planned priced And as where so year we be products portfolio, and for it existing into the price may about come into there how at then next think where we price next we're where the they're and product product to and family the looking fits opportunity. products the year, look in market at we have and

the would And broad-based but look within so that. targeted it portfolio, across a I is say very

for year And through things GSP to a price. we full freight of an of from gone And we've the certainly will when headwinds it next impact, tailwind is be and us take year. a

detail a our tailwind So dimensionalize that we'll said, it will we QX be on and certainly as call. more

holiday this season. luck good Bye thanks. Okay,

you. Thank

you. Thank

from Our your line questions. of come Please next proceed Jim Stifel. Duffy questions with the with

me. guys. Two from Good of Thanks. lines Terrific execution. question morning

unusual you're you wanted throughput product Can maybe methodologies? an for season you availability? standpoint. operational Is about lead using times? can ahead more get DC to longer then to forward you're doing ensure First, like any on the the surge, ask it and And prepare of things or challenges speak and maybe from more atypical just to I to Are about the and season last-mile peak holiday talk tactics Paul, production pulling tactics how it using freight specific expenses? the you,

the have the back standpoint, coming Thanks From at very demand morning. QX high since operate our for they of last, continue to XXXX of at capacity as manufacturers, the for out days saw of the high the we middle they a very capacity question. darkest of Good when COVID. rates, Sure. really

possible. doing transportation, From other has We which anything container port we nothing of sending been things centers. we call sure out beneficial are there. making talked put an on ships ordinary as in faster that things sure coming Houston, has earlier on we changed through as and continued, our we're So has fast a of have than certainly to the hits making not it the availability, some port distribution as up the

-- have we're it. -- I think focused just we're a very we very, on So

here. gross about on downside so that. to on higher of merchandise it's But seen not of the You've impact we're the margins really cost, focus immune getting

the peak nice about seeing we performance, As think holiday throughput. talked about, you we're and as

year, read I think to in e-com Our we're carriers. ready. the you've that, on Memphis DC outbound is From piece last open. and on throughput capacity an seeing We're nice of it headlines freight, similar the of

relationship we're So gave have -- believe have use them we achieve we that the strong the morning. just outlook we and But a certainly to this very very, UPS. capacity, we that outbound with

the Matt, then, end little And quarter that. XXXX wanted to for look I around bit. of a Thanks

we some delayed product XXXX anything you releases or looking should you think high-level originally view Can of I a for? XXXX. be new give new product for pipeline planned for

as to we do that from family. new in to Jim, I of of our XXXX, is in say, things would And look I to most that. innovation is do drive the straightforward, think product products into And that one ranges product as the we you about Yes. continue look innovation, families. colorways wholly all which think that we'll innovation

our products some the the so, in design have. XXXX work with look new like products market. we we're to doing forward pipeline And We -- that to we ready. some our teams And and we bringing suppliers like products bringing get to

Excellent. guys. Thank you,

Thank you.

Suisse. proceed come Credit of Our with the next questions. questions Kaumil your line with from Please Gajrawala

you I sure questions Thank XQ, Did heard a supply to sort can properly, and of get obviously, supply your or the you'll question, you remarks. to feel a that morning lot to lot of over around you'll get you commentaries of XXXX end A a is where ability better like getting course where say have in by it? thing is that's quick make need sequentially we'll there's it need? prepared of the want of I you you. the everybody. supply the still and Good of just point Or what

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by be spots over We the What the but Drinkware build of we our portfolio, but the supply inside will be will year, be end is it will course healthiest, the XXXX. Drinkware will said over even XXXX. our of still there course the of

Okay, you think many growth -- a was maybe on of great. on you little then you of – to a existing from light if could shed had buyers market. mentioned new of Maybe your a new able you are of where lot brought And of that and year. how kind have how customers? is had ask into follow-on a I a this you such. users users, them lot the repeat of sense study terms year in much of XXXX coming I more a customers Are

be would that useful. on context more any Just

is say I Yes. the to obviously, YETI.com. data direct best comes we have would that the data

buyers, when is I the have stayed the returning that and we that and of between we and about really kind we've sign consistency of we acquisition kind look that's customer and What seen that that's is retention. So data strong a had new of relative set health of think at. data, that talk high new

stoke that So, with And that put they're our both working the I and also and growing in team in driving as grow they're able having conjunction acquisition that think team our if team them with analytics growing is retention creative incredible e-commerce driving brand retention conjunction, together, and acquisition. together. we working that we're benefit of to we're the rates,

really of growing the they're at expense So other. not the

Thank Got you. it.

you. Thank

from Our final Please conference the call Matt Koranda with with your questions. come Capital. questions ROTH proceed for will

here. me for Hey guys. Thanks in sneaking

helpful. from least Just of learning maybe be repeat Thank that AOVs versus quantifiable in those the the wondered qualitatively around just DTC I'm repeat repeat could in or machine and metrics you if learnings new channel customers customers AOVs you purchases at for if curious, compare could [ph] initiative cadence any provide you from would you. and have particular,

say hyper things on great Matt, What I hyper the you focused aware question. all are Yes. is would mentioned. we and

trajectory seeing is, what those growth strength metrics. the And -- And in those. shared as haven't seeing we're would importantly, I want. but We say range is we what almost we're the across of real

like What that We is a putting just to So to they're not positive ability don't continues affect number to intelligence today. we're to and static. it in our grow. sitting those the seeing grow we're the continues way

what I right would I say create But So sharing we non-data say, business. is, I would inform natural we're call of of not the analytics-driven our organic help those can the they continue business. is just what now. side performance But to the to growth overall other continue through it,

just historical building, in this great move data and with grow So to which as think it consumer brand our then we've importance got I building, now forward. combining this we're momentum will naturally business behind we demand intelligence, the by driven us

Okay, I appreciate it.

at are would to There you. call I any this like closing to Reintjes questions comments. over back Thank time. no turn for Matt further the

Thank forward you look you We fourth results. all to joining talking us with for morning. to this our quarter

This does your conclude participation. today's teleconference. appreciate We

your You at lines may disconnect day. great time. this a Have