YETI (YETI) 7 Nov 242024 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the YETI Holdings Third Quarter 2024 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, November 7, 2024. I would now like to turn the conference over to Maria Lycouris, Investor Relations for YETI. Please go ahead.

Good morning, and thank you for joining us to the YETI Holdings' Third Quarter Fiscal 2024 Results. Leading the call today will be Matt Reintjes, President and CEO; and Mike McMullen, CFO.

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

may remind begin, make some call risks and and we'd our to we statements. could results are you forward-looking today considered statements such like this uncertainties we Before these various that to to that differ subject from forward-looking, statements of on cause that be actual the materially

on to of we true our revise please information, website accurately measures non-GAAP believe refer We underlying except to update to result undertake to Relations in this morning most directly most in recent our the discussed otherwise law. Unless more a information, section detailed We a performance comparable to now filed call required our more as statements and the presentation For no Investor the future basis. forward-looking financial on factors obligation measures turn or release posted their any as Matt. non-GAAP be are otherwise, our made measures in over they use like XX-K. Reconciliations as Form to call risk this by stated, events today or new of will represent at business. GAAP operational press of measures the included of the yeti.com. I'd non-GAAP these or results

our outstanding in with engagement, performance successful priorities. brand growth growing across consistent of business, and Maria, quarter by our product wrapped morning. strategic good portfolio broadening strong Thanks, execution all the and another YETI our driven international

the were growth sales all with channels. net XX% in quarter Our up across

launched and see. Coolers legacy that saw performance complement highly existing delivering catalyst a expansion & Equipment, newly be products, opportunities anticipated our accessories both we to Drinkware In continues innovation side, the product from newer launches several bar in underscoring the including lineup. several we and good tableware, On with

challenging quarter of delivering U.S. the growth in fourth XX% U.S. we more international of our quality a solid continue see but we consecutive the to On also discerning while front, high over buyers. market, saw where growth outside more

product to to and and strong full strength, brand us year innovation YETI's on growth track together, outlook. line position global cadence bottom Taken deliver on top our remain

reminder, a buying as watch we shortened more holiday QX expectation takes of spending top an consideration into consumer As in in our closely intentional outlook the line season.

relates it our track. chain global to announced to our As remain supply previously on expansion efforts solidly programs,

for primarily supply to portfolio. approximately base. Notably, facility. third XX% on and Drinkware reminder, and and markets cost quarter, a our to goods cost global at tied of been gives As of our China, has support total China chain outside the greater related opportunity we optimization the end service our evolve This of production product during supply pace sourced for us historically our are target initiative Drinkware scale, we second to commenced facility from a

of This success. business are China. supporting our managed outside And priority of and initiative this and this partners we with over result, and past great are for of successful outside the long-term and years is to year, pleased by positioning be key our performance actively few capacity by initiative, be and are YETI XX% that effort moves. All for located have we ensure China. end end the the by be to XX% as these capacity global confident all, We XXXX, will global will our we of encouraged process in this Drinkware remain a in automation of a of Drinkware the approximately improvements will the enable growing

very sound are strong into our our and reiteration holiday of delivery supporting a demand in growth, drivers the confidence opportunity sheet. have outlook in near season to underpinning geographies, across YETI front continue balance expansion. the In the high-quality long-term of channels of product continued heading the We and our profitability and term,

Our the strategy and continues of prioritize product our omnichannel long-term greater and approach diversification, international. expansion of growth reach brand expansion engagement, to

underscores quarter, a the and showed spanning In extending Fair tournament Kingdom, Open our also From to outdoor globally XXX did global brand. in This at reach just over of audiences in Notably, growing event Game point XXXX. to events the third event Turning and terrific we first in YETI create up attracting residents. Showing our broad the in globe, and team over range. enthusiast United attendees. the playbook our multi-day reach our our Missouri bass-fishing as to sales product to access another around was volume job a XXX,XXX annual our enthusiast communities. highest the The consumers. that YETI global is bridge the and Fare brand effectiveness Game

participated and the sports. Miitopia a in Big Dublin engagement notably events in stronger Culinary fire hosted London. presence Grill Stuttgart, with Championship ambassador activations was number and with of hospitality and around highlighted exciting in live Europe, events also We Barbecue a at across the cooking World in including the and globe, in

Our further cooking the entry content was displayed stepping series. the underground eaters YETI in culinary off line the in-season produced featuring in into space and from September,

the side, a of with ambassadors. YETI X group Pacific hosted the On skaters, in of whom brand sports a skateboarding strip are Northwest

we spread League surf, the On Beach World Titles. well Surfing of iconic published John this the the in both industry the Florence of ambassadors, experience. In as won our of Open their where X finals Surf back magazine Katie featuring World a event, San December Summers, had page as and Huntington U.S. Thrasher in in XX-plus issue Clemente,

the in seeing exciting month which the community, Presents the the nature. YETI published we celebrates book With Waves, sport last momentum in our table of fifth surf are intersection we titled coffee

ahead they energized to massive supporting enthusiast and ways, new by in their and YETI authentic pursuits relevant see providing real about the to consumers groups of in lives. opportunities we connect them the are in We product to care

and YETI that the span alongside of broad sports sports it our top These into entered NFL other consumers. selling sports partnerships, with partnerships Drinkware. As of spectrum enthusiasts season our the put program a college tailgating we customized hands XX relates of to league football YETI programs, products

Drinkware, including night placements American brand. linear moments, football millions tens season during Beyond and over recent of the streaming football Monday of live Thursday leveraged also we've sports NFL games, night hard promote for impressions our and and generated coolers the to collectively which soft during

the the launch significant time out media following reducing shared moment we cooler our in was most to functional most viewed partnership a of post the cold Liquid of and joint of our in to one-of-a-kind high-profile quarter collaboration with and the Between brands posts reached our earned we came million the Another Instagram plastics, commitment where Death, launch. of post one X time. videos all saw social single-use create media exposure collaborated after and of both initial alone Instagram campaign The people all around over casket. shared

to Turning innovation. product

or designing home, wild, products Our pursuits frequency for of passion, and in consistency it for team and everyday is in for the lives, routines. the use in developing daily be simply whether

meaningfully global to plus cookware. In such opportunities continue we food innovate increase in portfolio categories newer, markets market and expansion as beverage our seeing our into the bags to We with addressable building our and large the entrance of offerings. out expansion existing Drinkware, continue

our and X as fits extremely drinkware flask well products on and the launched we and feedback pitchers last highly of our the X months products, release launched expansion. new full as this quarter, barware XX which has positive anticipated with category. Early XX over been marked in and tableware the shot glasses, performance During

hard As smaller-sized soft thermal about our legacy hard In strength recently, to we of families. our coolers, format and season, we we coolers, style strength as potential lunch bags. More our and backpack cooler drivers continue new launched enter that newer the these several both well see cooler portfolio. we our Roadie and gifting been have accessories in the equipment as complement in are key optimistic Tundra innovation products. In broad-based products with

from Our our our Seat, which garage expansion Bucket range versatility demand And to theme. and LoadOut functionality to of to September, and to storage organization food complement of field. went in the hard use launched last in tied soft and to month, has and food sideline due the the live, Swivel our been containers coolers high cases

XXXX, in quarter, we're new of well Ranch the designs. launch track to performed Mystery in bags and in by and Drinkware, everyday and bags inspired on Coolers range weather all Beyond a YETI

received newest live fire the extremely while bridge showcasing our strategy Finally, our is food offerings, as to family, product feedback to cookware cast from is eating. encouraging, we coolers around skillet to initial our iron serving we and cooking performance of the our storage connection natural to

build culinary media performance we out key iron and of YETI how Food Eater is highlighted where of & namely This our and they received in introduction Wine products. ecosystem. attention The positive cast quality tastemakers the from product

our wholesale sell-in the innovation our As DTC. to well our portfolio, strong growth cadence performed with release in expand In our and supported are omnichannel. We product partners. healthy across we strategy and we leveraging wholesale has in our quarter, delivering continue channels and channel, diverse

as partners loyal and around we traffic collection Academy as saw Our incredibly shop the where whether inventory for To Wetlands support good into purchasing. manage remains is and exceptional that suggesting directly such our want excellent Independent distribution and impulse launches. intentional. In those of Bass with to shop merchandising as ways weaker while connect. or more collection plays Wholesale the with in Pro innovation those we and shopping shape new role demand Shops, us their customers buying Sports see are trends, to we're we be leaning attracting during intersect to YETI with deliberate some during product them higher, building doing enthusiast quality this shoppers. Channel job significant an consumers value Doors occasions, continue who loyal an and quarter are with us, DTC, new

quarter, exclusive our holders registration and engage our includes unique program experience, as preference we to gear with ID customers. The experience locker During Amazon product deeply a we This center, in our month, more store on the account launched in growth corporate our we Marketplace strong more demand and outside saw in all with In we showed the sales, yeti.com. and commitment U.S. X a YETI retail, the our of opened of store this this openings strength quarter with quarter with XXth the regions hitting year. XXrd coming third across personalized

brand have present, newest our Tysons exposure markets omnichannel performance. strong seen Our of at performance across strong our and in on are to Drinkware Virginia impact In full the stores traffic our awareness we has and are the positive portfolio. product a Corner they we seeing in to raising where continue fleet, see general, location

Turning to our business. international

momentum growing non-U.S. to markets. We continue awareness in see and

and omnichannel go-to-market infrastructure brand approach. reception and we Europe expansion and our traction scale partners we in focused continuing this the for retail strong opportunity, remain is front on strategy as Our receiving seeing strategy and playbook significant and consumers. of We're on is our brand end

robust are continued in [indiscernible] supporting Our growth. team, and our brand distribution

our European our markets good expand in our particular Australia the XXXX, partner we Germany. at grow in expect we wholesale scaling been independent powered and demand we DTC, deliver to focus and performance across customization real has reach, in through partnerships. As a our see with our driving up smaller and to wholesale Similarly, our corporate partners positive sales. custom channels, our important and business ramps continues customization exceptional as we by across continue with U.K. growth as opportunity sales all corporate e-commerce to capacity, retailers. In and we scale strong this national execution are continue footprint, Canada, expanding

wholesale on front, channel and we and consumer while brand headwinds merchandising are presence. the strong cautions On broader persist, focused

exceeded response side, has YETI our which store, in first see opened expectations. positive to in the Canadian customization DTC our we our early Calgary the during enhanced offering quarter, On

and the a the wrap XXXX quality about real went turn so in outlook with of enthusiastic this XXXX EPS. When more and our team, priorities. been of brand, excitement be and as want to look leading XXth long the call innovation, the combined any point my YETI going and about and what to this we our tripled updated Before is expansion business, XXXX, year execution than the at excited why product to we Mike, has history. I I'm look than thoughts today public we're for in hallmark in here year-to-year historical and a share has our are towards more and over our comes portfolio Execution where execution as since to few sit YETI, expect this of revenue different. I future. Taking future in I quarter-to-quarter other The I term front I doubled

not grow believe addressable expansion this Our and long into points growth food be led but and see Drinkware we active, our All to families. evolve broader its outdoors. proof enthusiasm innovation, relevance continues business representing the into across This track we benefit product around market. the $XX Drinkware, around YETI to to collectively large food billion. Underlying term health and evolution deeper space. We has also and and our the global themes, TAM, hydration, storage cookware, from premium of only a trends over strongly global wellness being macro to

YETI relevance broader daily not our fit with coolers our format Additionally, and in macro use, the as bags, expansion current soft within in smaller the opportunity solutions, thermal but cooler only how and the the Coolers, market hard Drinkware luggage. equally to themes also extend such daily in expansion enthusiastic YETI excited expand and continuing about and opportunity and I'm packs growth in bags, premium and enables life. With and opportunity

avenues of YETI publicly multiple have across is capabilities for of sport, beyond that believe out luggage, disclosed. I and large hunt, build and hike, and all DNA, look already landscape and we've address to right water-based with travel, billion-plus and designs As bags expansion ecosystem sustainably expansive what everyday, the I TAM. The varied we products growing weather and $XX global the brand, another

Importantly, we and relationships performance with product connected of underlying the remain brand, in that global through by it lifestyle-oriented cultivate and premium, to rooted all design expansive we powerful and committed and and of vibrant audiences. is outdoor-inspired real ethos a durability,

influence at choppy, in be While unpredictable my as like and driving YETI. we of dynamics current managing outlook I've and long-term time in to consistent 'XX in the potential. To growth. team and the and opportunity on our deliver to for front are can brand and through our would end, the commitment supporting QX Recognizing business, the building customers as full to have profitable in on remains seen our market an that heading rich near-term us I focused environment achievable markets innovation into unwavering on unknowns thank long-term our XXXX year their our is our

over Mike. Now the to turn I will call

GAAP a I'll then that in Matt, full the brief both contained morning, provide affected our everyone. a numbers year of results. review update current of items by by third and quarter our ago start and for on providing year. the good quarter followed performance Thanks, I'll our overview third period an outlook

then We GAAP impacted X our open of were your will it questions. There note results. up items that for

related were year sold current $X.X prior made cost of quarter's benefit goods results to the to There recall product in adjustments the period. million First, a to no our reserve included our recalls.

costs as accounting we the impact other Second, costs earlier associated similar to the our acquisitions results well These that as X this with GAAP prior minor margins year. quarters, include gross include operating within made transition purchase expenses. on our of our

on excluded For our standard business reporting non-GAAP the results practices, the impact of these to and operating be other basis results. nonrecurring from presented the items of on quarter. focus non-GAAP during on performance call order better will the are today's a All in

the to quarter channels in turning with was geographies. and This XX% our third quarter line all Now $XXX expectations growth to categories, Sales driven our results. increased was across by in million. and

XXX approximately includes from our quarter's to basis headwind related growth recall. point redemptions product year-over-year card gift an This net

the in of and the this a capture million in product us basis, last We $X.X our categories, with more in redemptions geographies. categories million growth believe portfolio new potential continued momentum YETI communities, brand of the channels year-to-date card quarter. On the card XX% all go new and gift and across are growth and new prior $X.X in quarter again, redemptions available versus to this geographies. up period comparable include for demonstrates results year gift year, to sales Our compared

by increased & Equipment $XXX our to sales Coolers on moving Now to product million. XX% sales category.

performance of is third and strong believe supported a this sales was been with the double-digit the had season. growth hard in holiday performance and thrilled recent are by C&E pleased Coolers innovation. quarter that Hard as in to have XX have We with particular, row this new year our quarter, of very very position a the Roadie category. cooler product with the in customer In the feedback we a this successful

particularly Panga Camino back-to-school bags also continued Soft lunch with exceeding backpack great key quarter, our strong of products for Daytrip had in from shopping the period. Within and our product performance coolers performed category our Coolers Psychic, benefited good well, our a equipment, demand our lines. expectations and line continued during

Mystery are future design, Mystery our products Finally, what line carry leverage perform $XXX near Ranch by products the about premium supported backpacks holds million, excited launch growth tenants sales Ranch. Drinkware broad increased we global performance and expectations, the that continue and and in diverse the to we of of portfolio innovation of continued our X% and our YETI to our opportunity. our with as branded branded

we quarter, X well losses very our QX. in flask expansion as into shot our of following our release limited barware the successful the this and mentioned, of Matt in and as As tableware full continued with sizes picture the release launch

we consumer behavior. are portfolio, seeing continue we to As some expand our really encouraging

we build retail Chiller, and grow. One seeing that sizes. believe is our products of lift as that opportunity States, As expanding led X our of more We dynamic to are believe footprint. point Beverage United Pitcher, a will are overlooked. more like and our growth we we brand the awareness stackable Bucket, by partner launch Wine parts group often portfolio see such Drinkware nice different tremendous sharing Press our and cups of We as in lineup French in only outside the awareness Drinkware continues for this our full that intended other on a portfolio, in final

demand with the up size, million continue strength channel, same on terms location. of U.S., the macroeconomic our expand product Moving the in well to a position remains by great that we portfolio. Outside also wholesale of partners think that positions as benefit We Wholesale wholesale this channel. of grow period sales versus in as strategy from space in us U.S. of diversity plenty believe opportunity for the this performance the Longer growth last to of and focal our we is market we were to in term, globe. diversity quarter, the pursuits the new In continue our and third XX% to wholesale $XXX dealer see year. capture shelf puts our the around to our a we our point regardless conditions. us partnerships

channel channels Finally, driven growth we X% support to $XXX Drinkware. is our C&E and inventory last good season. growth led in as by both of sales quarter, in enter our Direct-to-consumer all positioned holiday DXC again healthy remains business. to in million Amazon and by the quarter, grew posted demand well to Similar the the

from the total was growth approximately gift DXC XX%. cards, Excluding headwind

the our XX% $XX million, now to Turning Australia. in driven international business. Outside and Europe grew sales U.S., exceptional to by growth

We are markets, invest and building capabilities in is example in encouraged and we we the in momentum and our and geographies. One by scaling customization. brand to will those capabilities are presence awareness these within Drinkware infrastructure continue our of seeing omnichannel new

We products. and in to customers are the for offering growth customize driver this Canada, has us both offering YETI now so far this believe This been personalize and corporate and it holiday successful Australia a ability be their and will year, of our season. a consumer sales, we

we gross from basis during and and supplier compared freight points points XX margins sales on this XX or a the $XXX sales that as first million from the to transition from points higher gains other quarter or building we expenses as mix to in basis basis basis percent DTC to XX.X% of and quarter period of were that XXX certain costs and growth roughly points awareness percent sales, in had well sales brand in decreases to XXX hard Variable basis XX included: $XXX by third Non-variable XX smaller decreased the to costs of respectively. AOVs year. by strategic increase wholesale as year. during last XX.X% the relates for expenses XX.X% opportunity of price product costs, combination basis points it our million basis our implemented support offset of continue compared customization product XX% The to increased third as XX XXX As across looking impacts higher impacts. SG&A of from points mobile profit XX into marketing to basis same higher points to expenses a of out increased the we spend forward. XX.X% last gross favorable expenses quarter coolers of sales global points, higher and These due growing a channels. costs, increased a see teams XX% inbound the primarily margins, in and lower quarter drivers as strong point driven employee basis the by

of year. of was is $XX basis prior same earnings diluted increase income million $XX compared to to increased XX% and share our prior per increase income $X.XX Net year an period. per Year-to-date, the versus XX.X% an in $X.XX share or increased XX% of year to earnings XX%. Operating points nearly XX the of the over $X.XX million XX% diluted period period, up sales, last

of cash balance repurchase the to the relatively Turning million. half increased completed our despite were year-over-year ended to flat was on which this acquisitions our in quarter million and with Inventory our all $XXX $XXX sheet. $XXX We X in first basis X% year. year-over-year million share a that

forward, As fees inventory deferred last million our be global was million drive approximately flat year of expect versus the planning. Total we to we at look finance $XX we $XX continue approximately year's prior and to unamortized quarter. inventory debt, third in leases, financing end as compared excluding efficiencies the approximately to year-end

our which our We outlook. X% compared to prior increase to XX%. net turning midpoint sales X% XXXX's now range of XXXX is fiscal Now expect to the full fiscal sales, to of approximately year adjusted

continue in demand We year. our remainder the of conservative prudently the to a take for approach planning

year. The Matt as between remain As the approach Christmas macroeconomic year holidays outlook consistent. this full of current we the given components well our sales believe Thanksgiving shopping right shorter backdrop largely said, as the and the this period is

our versus current hard outpace to expect expect performance and & to from Equipment channel higher performance continue momentum category, in BXC to We we bags. wholesale. By in coolers strong supported slightly Coolers wholesale Drinkware, continue our by given

in in the domestic digits. growth Finally, mid-single the we growth international remain XX% range with to expect

P&L. Moving down the

year freight but gross last This the not savings XX.X% year. such the expansion also remained product as drive XX.X% our inbound been costs. other at lower margin Our point XXX basis only for target versus areas of to driven approximately teams costs, by in has XXXX efforts

lower As on have shipments well within of surcharges quarter, would hard elevated relatively from the we impact inbound which year-over-year we rate expect QX with expect quarter, through P&L. to to inbound to cooler gross our QX. When our an last our in to mentioned mix, to did smaller surcharges come started down, in of than margins much a Those be manage but decreases we freight fourth be and price third combined from gross the quarter see year-over-year margins unfavorable margins flat benefit we impact sales to on we continue a basis.

on SG&A. to Moving

continue year full growth expect growth. We be above sales SG&A full to year slightly to

the consistently XXXX future this portion we SG&A are in growth. that drive investing will have to margin said increase in order we we of back As year, gross a see in into

also have margins changed. adjusted operating for not expectations Our

of we million. effective $XX to year tax of the prior operating diluted XX.X%, approximately outstanding we to in margins dollar expect continue of XXXX. an of the operating XX%. and XXXX growth This basis that points the shares fiscal profit now fiscal Below operating than line line, continue XX in rate expect XX.X% delivered full XX.X% We higher we with year, expect for approximately approximately represents

prior now adjusted range growth and share is represents of of diluted As of a result, approximately our the approximately earnings $X.XX, XX%. end we year-over-year per expect high which

and outlook expect now between capital for free million. million, $XX cash consistent we at cash, flow our million expenditures year of $XXX full for and $XXX remains As

going We third the in all, broad will our businesses. and are remain opportunistic our authorization. All we on proud $XXX across strength opportunities our million we allocation share capital performance our both balancing and forward, approach of with saw the M&A quarter repurchase remaining

strategic and our the our bottom X while top we this Our year continuing line first us year full achieve priorities forward. execution confidence also can to guidance of gives in months drive

repurchases. and Our business opportunistically growing cash strategic combination opportunity share invest gives also the of pursuing a further in acquisitions while to position us the

growth. As into our strengthening the year-end, we on to brand, and continue omnichannel move and we our product focus driving international portfolio expanding

Now operator your call like I'd the turn back over questions. the to take to to

Baird. question first Peter Instructions] [Operator with Your Benedict comes line of the from

First maybe of If sourcing making one I'm much XX how you're the forward just kind chain supply to your outside the XX is we at this how diversify of of tariff China. I works months, can kind shift to business? question. the directly efforts of point? other China curious we the should around United and international appreciate that tariff fast nuance to my aware not to that or source to impacts the international Drinkware we cost pencil you question. a of just States? try bring on markets of potential out the as Is thinking be That's first all

Mike. Thanks it's Yes. Peter, for the question.

absolutely. So

directly any go the we made go in as So can to Canada region, product China through this, to so Europe to to Australia.

currently business we grows, as primarily our out So one we've is which dynamic is potential feel a international this of helps that offset is obviously some talked there. sort U.S. of through risk this the cost about things we've the gone of as

nonvariable how But growth. X? you've this year event the investing last do more the at as you manage just or side another mentioned tailwinds international do you've as helpful. margin the been as pace and SG&A question, Mike, we gross kind maybe of that have a really look of And and That's Okay. out the support been obviously, of look of -- -- of growth we beyond SG&A think kind we to as Or to for -- you tailwind it year some moderate? ability in line has about gross your that maybe isn't think much margin how the about

Yes.

here. that everything intentional. that I'd So largely been we've And pretty been I'd say year comments have done has say consistent our this

have for of knew we year, it and the to we the invest into tailwinds coming So allow business expand. back and opportunity operating margins were into viewed as to us we as an -- some that to gross going margin that still some

So year-to-date, points. XXX expanded We've up still XXX are gross basis basis and points. margins operating XX that basis margins taken points of

SG&A into Again, gross operating today year, put points XX outlook we of that back of the points. that margin expansion. we're all expansion the points for -- would That's For investing and allowing out margin basis basis of SG&A XX basis imply intentional. -- XXX

we're thoughtful that. about So to year, we we into go as approach how be next going very

-- pretty obviously margins today. pretty drive on So margin to our consistent not as operating intention is gross that, and intention that been we've margins year. And up and XXXX time. into is to we're But next been that we've giving we specific our it guidance go operating together over consistent manage

Piper from line Your of Sandler. of Keith Peter question the comes next

[indiscernible] Morgan topic. on for more on tariff Peter Keith. Maybe the just

that's within China great. relatively smooth how And So Or gross margin you're facility the should that? exposure of we be But think move think to in terms how deemphasizing about Drinkware, impact? there? we is margin expected impact should about

Yes. for question. Thanks the

lot are been obviously, the it's impact on important the remember think really So focus of present I to But time, at a of there's there potential a tariffs. of unknowns. lot

we specific about today tariffs, amount terms the quarter doing. reiterated timing, quantify talked too the of So cetera. et then of the products, in and know what that what to we don't and There's we're much last the just try beyond

through on have quarter like that doing. third, We're one. Number The -- laid we would our risk. relationships two, as long-standing and I to solution we're have but very here's we with and is as think with. track, potentially we any strong them we -- we'd reiterated So who and out also what we option this, offset plan to an last look price -- working assessing potential focus on that's today that is if a go suppliers at we tariff I where to new closely are working we'll think have number see potential partners. And strong we with

thing been control. And that in before focused navigated the that a have But I So now today as successfully, can right that frame goods. that things there's the XXXX -- of the just allow we basically, will out we have the other out just plan in number. time do and would through a we believe that XXXX, reminder, this again, lot are on we that a with to we lay specific soft us we're there unknowns to again. place lay And

wholesale one then on Okay. sell-in. more just That's helpful. And

quarter. the in strong So sales were really

you already. dynamics QX could year? selling then how in And in to on mentioned you those and that into healthy earlier go compared wholesale sorry, you sell-through maybe the But the detail saw wholesale more

Yes.

what We've our our and year. sell-through here's pleased been with say. very So sell-in I'd this

As we this the U.S. in year look

do I that sure sell-in we that's is and U.S. when sell-through, we sell-through, dynamic. make want is thing comparing one talk Now clear a talk to when primarily

And so whereas global. is wholesale the reported number

we the And how We've think just I across performed with into has have as really piece, inventory sell-in a we're U.S. successful think pleased aligned And to sell-through so in both the when C&E a been position this they're Drinkware. look you and really we good really, holidays, go year. at reasonably QX.

comes Your Jefferies next Konik line Randy question the LLC. of from of

us to in here, it up frame business for going to additional we has Just considering we where markets areas out bodies to growth where with for and where been, I us, and we've employees, different way guess try continued terms the about maybe, think today in terms we everything are ahead? international are ahead in power the the those for we're frame in Matt, is of set of you, maybe as in where up just Asia? Europe regions like infrastructure,

I would Randy. couple of things. Thanks, say a

and execution in with As that the more built really the the they're continue of particular, mode. you working. from and and is seeing international of kind extraordinary. past, that continues The scale in opportunity. But really have good under pillars -- that, And it's would relative are we've as Europe still the it's of call we Europe. And of about and for years that of Australia, opportunity in even said the out in even that's early specifically Germany feel focused we we And as Europe been you're the called we I to team really now, playbook look in at reception that we call of strong we the build-out. Australia We has kind Canada is the and to in incredible us meaningful team team result when the outstanding. powering deliver. Europe in that these that growth we're we've is together we've the U.K., that's execution market, talked built. is before, up Europe a say -- those on on early the we some what Continental today, part today and the how -- of is still just infrastructure we reported But strong X U.K. in couple in behind U.K. But exciting scale. have of we that growth built a There's think out and time. are say still out investment through The in the We days and potential I continue we're size put why markets focused of kind its go that growth infrastructure to would down of front the in was more

Asia and building is the early start-up our that in and resourcing investment. back there. out go-to-market We're in strategy in further Asia very our

be Asia, think come. a over to the Japan, Korea Asia, I So years will North story

talking the think about I as of be foundation we it. the Europe, and term scale built more in off in we've kind more U.K., and take we'll of really the near

guess And I some you're maybe how evolution the a talked about barware. unpack You -- excitement thinking about ahead lot product then innovation? us give lastly, and around further

areas in been [indiscernible] of You different us on that around the ahead? or the other us How be -- some go another going innovation side you've perspective we into of culinary thinking Maybe perspective on YETI give how you're for kind you're just -- some also the good other the giving gave targeting. to should thinking brand forward? of strong audience investments categories about about

really has YETI the it the it portfolio. to product and really and been of I and we're out, I the is thoughtfully we're are sort Yes. build you laid say if never Randy, expect the all where shot in connects. for of evolution back, hallmark talking our future. think foundations to so a will brand look historical scatter step What about for want We I don't going what today here, it the shot all just scatter go

use an what you're food really of Drinkware beyond culinary out see into of continue and see we bags our And so build continue as there and we continues we business, seeing, portfolio is, really to our and you're all storage example cases, and I as and case all protect and you'll the to that, as also out YETI expand I it of coolers XXXX more connect think the evolve and XXXX those ecosystem. to within as build cargo think going our fall and fit together into we is

of with ultimately the We in daily more is cases know so brand do to we we about the have we and opportunities brand trying grow use the what's make massive global front that lives, excited We're the more right We YETI. really is bags. it. ethos because what surround have in we feel And present incredibly their to products, for market right consumer think is a more know us those we're brand and in relevant heat. that the

and focused combination all I midterm, excited at you're that But sense I and over say going being look where I think moving the the YETI And of barware solution-oriented. Drinkware culinary, really to -- to market kind we're from of umbrella. that build to think to us next cooking really makes it that's you're underneath serve near see going the think tabletop that moving very aggressively out. very [indiscernible] about. And being connection and

from Your of next Phillip question Blee of the line comes William Blair.

you're upcoming a of expectations for conservatism And level a more had season any And then to of a then peak ability promotional built holiday? little competitive your Can in you impact environment? about what seeing potentially quarter-to-date the trends? more in, any bit chase? talk Maybe

reiterate I'd in of buying said highly a always you the and what and depending Mike has a falls. in said couple starts Phillip, big product I'd say things, QX QX, I desirable gifting and YETI when upon bit for and one. different behaviors us. incredible always little of I'll is see when of environments, been solution year-to-year, kind say, the gifting an season

closely feel positioned the We So holidays. we're for monitor we great those. about how

and wholesale season. run incredible We year, defined a sort is the shortened holiday address the plans there have traditionally consumer our partners between domestically of with the when goalpost they globally of buying shop. This to

put about into we're so excited and well holiday, we to we market have our We're and And great undiscovered always for still traffic has things this opportunity the the stoke innovation some a primed. as holidays solution. And still and we for to drive history has be year demand the well that. have that been, great gifting that's primed energy We're that interest.

to say, as the what into to get shortened market in forward to to would has and it done, -- in relates unusual go what promotional we've it's we have and past. we react we think gives. And ready relates holiday. haven't quarter environment, as always to cadence to similar to quarter as the And continued I So it done the I and we're think early we're date. be our season, outstanding the the seen And consistent I as in anything promotional the the

gross margin of just versus give us product rate? are kind internal sort try of and macro and on about potential your of improvements what bidding some some for impact your tariffs, cost the in helpful. the margin, initiatives costs transportation controllable of more are Very gross you maybe some And Excellent. any kind of on then you talk outside go-forward of to that Okay. between on normalizing of gauge

we Phillip, Yes. terms this our things because so on inning continual the out that year say I'd we've to business, our margins, going XX.X%, on manage and in on a process outlook we manage to that an difficult it gross holding gross to things pleased in in put really we there's every to which that COGS, the market was was that our have can with as essentially expansion well. going XXXX, in happen margins to is been the expansion things to The of internally the need we've year-over-year. put that -- nice had. that react Obviously,

both a things are Drinkware, is mix, won't driving those to than we is our grow the to gross are lap growing believe than in some specific somewhat It's intention margin faster C&E continue grow The essentially period that wholesale faster flat margins. about. into there outlook hard But the we time for that, to intention faster wholesale. it like -- next dilutive sort BXC, that cooler growing categories faster gross what this to QX QX go than year. We'll implies -- growing together. price necessarily of as we is the It's DXC decreases, talked are our sales

what So lower those going But forward. And believe. to get are than flow because thing those, year-over-year going is in talked we've QX. benefit to about provide surcharges did great saw we've a a be P&L seen. going that of is that's our in of managing that lastly, we impact through benefit QX the to we one we we'll then also in We lot think from some can QX QX freight in surcharges job that going nice these

we we transitory, along, said all So come we to -- but and starting down. think are those see are those

over drive specific do but again, manage and gross guidance freight not costs going to which what on we've XXXX, other operating to we're been inbound doing, margins is to costs, giving to continue up our than and So continue our say manage product time.

both would only and and where operating line our And strengthen think they'll is to strong thing P&L, to continue gross an incredibly things when you see sheet. just strong we growth, situation mean, and have I to what think operating to you have what we strong add continue strong have gross have a the I strong We said opportunity. drive think Mike already And we margins, is, margins, we you have and in margins. margins, really top balance I good will continue work happen

comes line of with from next Morgan Your question Clapp the Megan Stanley.

of I ask picture. wanted to just big kind

been a to talking noise obviously to of mid-single-digit acquisitions. this year. There's cards, gift as You're it relates U.S. in year-over-year growth the lot some

So kind digits the that is And do the single the go-forward, level? growth U.S. in share? low in growth up you're gaining is U.S. forward? that you when I maybe And of the about and if some category of you think think not, going right about mid-single-digit kind how guess

market growth more more here the question. brand for doors. brand. reiterate we that continue in we out, would product outlook. expansion of is the as build of not as to What seeing portfolio the domestically the product just any what The the think in QX, for signs opens gets long-term I opportunity our is about version kind QX thanks seeing and we're Megan, see while new the incredibly excited. we potential sitting that would say, expansion and opportunities we're The opportunity us it I call in updating we're in our

product Without I our year-to-year, giving expansion be how it product a weaker, that changes some there number, comes market pegging based quarter-to-quarter, cadence specific our on think number and or to strong, can out. background, a backdrop, on

and bullish consumer But today I picture, receptivity to are bigger have we we we think think growth. the days of address And on when get before the run you very get expansion point market we're partners long what to the on and the it on really step incredibly product from to where go, the brand. all back those to the We're early domestically. your consumers can incredibly that's bullish international you

we as you think consumer, -- where and we about great step more relevance So when about that. connection I about back we'll and product about feel and about But we think are. think you guidance, our potential think you about when think annual talk go think through and you I

Okay. And to helpful. maybe maybe question but sorry different. -- another Awesome. That's ask on bit a little tariffs,

increase and yourself how a take to leverage balance really do on little capacity And bottom think can there Your ability give you the investments on about are in that spot. line? you bit debt accelerate? great sheet is in perhaps the Or flexibility more a some to

XX% maybe that to how end offset some can is to to of capital hear kind It's of balance further? to outside standpoint sheet a It the bit you that from you But obviously anything do great will hear a these leverage little be there to would able the short-term XXXX. the about ability to perhaps by get thinking China just of be you're accelerate more headwinds? encouraging of

it. says business strategic that we approaches faster sheet. answer right initiatives, about we feel an supply say capital ways strong and have, flow about We people, all our chain capabilities We for to the our with thanks what I to other more balance free and get great look about for would leveraging When think great to have. to the Megan, operationally. cash the that generation thoughtful we Yes, our and feel get we the do question. have of we incredibly answer about alongside continue capacity the

pricing relates look of of And make those evolution as look So tariffs, to kind as business relates supply manage think as the we're we the as we'll to absolutely it I kind investments operationalize to and Mike -- those what with specifically get said, flexibility this investment in we we tariffs, we from conversations, deeper into chain. it dealing look at. of we conversations, understand consumer continued at and at our how everything everything to

and discussions table now. it the some actioned on active of right being is that all So

Your line next Joe of the Altobello question of comes Raymond from James.

of was other shorter I just if on This quarter mentioned wondering or But been Joe. to the yet? you're And on season, just on margins. and you I little this for a next any dynamics math want hadn't quarter. is know mentioned Martin XQ up buying that implying touch the bit again. there's pull if flat EPS forward touched XX%. you've right, we've any for done sort

No.

largely consistent story. it's -- the we've mean, I think I

terms a And are to in the related of some we've the and margin then we've this had expenses, the of that talked gross in we Matt on gross business of So when you that I think of to those I using some think about our the decision QX, a upside sales, continue couple dynamics QX specific gross about, in of think margin, there's to this components margin to invest operating into touched believe to quarter. lot year. environment

to looked But and our at and year-to-date be the our of in both year, as everything think of as then well results then -- needs -- outlook. context I terms the

are in a line about. we pleased post, about and unique so had we on both QX so bottom very in the that we've talked year we're some And year There's that basis basis. with to dynamics the top far a that line

to make done good feel sure we when about an today. that I think we we've is put that, we want outlook, that's out and that the obviously what other thing

talked nothing about. what beyond we've So

you could just market the us and landscape competitive Okay. Understood. And update how on is up? share your holding

I'll landscape. of the things The a on take couple -- competitive that.

haven't seen largely the any landscape. We changes competitive in significant

deliver a continue we're are and we and grow growth have globally, think the partnerships and stay we come I that market and how for the residual and that think alternatives of I to some results of I competitive, and strength have, continue our building when space, and we the seeing look think the and you YETI the quarter-to-quarter, the portfolio. you come bit. But maintain of the diversification opportunity we're go product shelf strength brand the at to markets kind of and that domestically,

think of of how are signs all I weather kind the market.

or feel changes we've about And good where the appreciable seen wouldn't I we I are. material say any to so market.

of Your Duffy of next the Jim comes question from line Stifel.

This is Peter on McGoldrick for Jim.

and of new forward, dealer as the growth of this growth, to can the over revenue the forward sequentially of And should some year-over-year you international within contribution thinking existing Just provide first, look the composition that then insight midterm? we to as gains look how evolve quarter? we expect XX% we customers

called we U.S. And talk been the it that that, open Europe, [indiscernible] adding omnichannel we've really negative infrastructure doors. a is what traditionally in it's that to exported globe. Australia believe But to in door business. that you strong at level we kind some playbook out, the we customization, we how resolution talked our e-commerce those we've down the wholesale aren't would things follow to of taken, and haven't That's evolving obviously, those you not the kind and a brand. historically a largely markets has taken Canada But the type point of given wholesale the strong when that been that as lot would about partnerships, specificity. the an about like approach built established, and markets we've lead out Peter, we I comp door we've new and of run, out you into we've say past, e-commerce businesses, the -- if

other of multinational growing growing corporate marketplace. Australia Europe sales custom there business. And see pan-European and Canada. We've in a retailers large We have the a then like is aren't in kind got and Amazon dynamic the U.S. you

more picking And the so be to right it tends doors.

of much wholesale is a to the it's so you business methodical a performing have as process build-out, relates it which we that And kind more to lead conclusion the well. would that

a reorder specifically fourth contribution, the any Drinkware, as about Can in to holiday, space, rates, thinking products new YETI relates underpinning just international then And wholesale is it outlook shelf or you share contribution? already. figures giftable staple quarter ETC

Yes.

to say. think price this, channels think to QX, for growing months I strong and We we've specific we've this would the that we to set to could Matt we us So channel sort relates and that. about look it of expect outlook will similar didn't thanks similar than holiday I'd got mean for the for the season. But seen think Drinkware. Wholesale in QX and relationships highly we talked in that we've faster -- we items highly for growing I as question. are international, pretty than expect year dynamics released -- how -- faster of giftable last -- when points at long. between give number think up the to all continue look BXC. looked the and Drinkware I sort of We really international a give and that's we categories I XX specifically our here's products category what And year. talked the that mean giftable year we've C&E about

Brooke question, For have last Goldman Roach Sachs. of your we

to changes similar packs the earlier expanded Roach. with should price Savanna lot we depth a how excitement about Should those the bags for your year? year. think around and cooler changes? your so, planned rebalancing In you think of your Summer bags we business launch Brooke the you and the value for If about of is prepared breadth next on proposition to of launch a ahead expansion made existing remarks, This similar this mentioned hard

question. Yes. the Savanna, thanks for

think we the about what potential those of as growth laid not out the literal are the expansion growth I sport, run excited incredible natural bags, weather we everyday bags. an from are this call things, extensions for starts those I bags, travel, packs frankly, of a mean hunt, hike, luggage launch We in in and water-based that sort it see space. YETI as, in actually only the all on from long-term what bags, all in but

of think next bags half really first additive we and are in kind the to QX, of year what that bringing out are expansionary the we have about today. As I

So in we meaningfully there -- bags really of transition-wise wouldn't that consumers is meaningfully create more It's market anything kind and some interplay between between looking the we're bags to line, expect our expand choices and I in the packs. these. have But those. for

Thank Matt over to closing for final remarks. Reintjes you. like back I'd turn call to now the

on for our everybody, joining and forward full month. of look us. We QX speaking year Thanks, call. you rest wonderful to Have with a your

for and concludes please Ladies ask participating you disconnect and gentlemen, you lines. this your your conference today. call that for thank We