Why Drinkware Maker YETI Holdings Shares Are Falling Today

YETI Holdings, Inc. YETI shares are falling in the morning session on Thursday.

The company reported adjusted earnings per share of 90 cents, missing the street view of 96 cents. 

The company reported net sales of $519.79 million, missing the street view of $535.95 million. Fourth quarter net sales increased 16%, while adjusted net sales increased 6%.

Quarterly net sales were highlighted by a 12% increase in Drinkware net sales and a 44% increase in International net sales. YETI Holdings’ fourth quarter International adjusted net sales increased 39%.

Direct-to-consumer channel sales increased 11% to $344.9 million, and wholesale channel sales increased 26% to $174.9 million.

Gross profit increased 89% to $315.2 million, or 60.6% of sales, compared to $167.0 million, or 37.3% of sales in the year-ago period.

“Despite strong topline performance in these areas, our fourth quarter results were below our guidance, primarily as a result of more cautious and inconsistent spending on high-priced ticket items in our Coolers & Equipment category,” said Matt Reintjes, President and Chief Executive Officer. 

Quarterly operating income was $98.2 million, or 18.9% of sales, compared to an operating loss of $(43.7) million a year ago.

Total debt, excluding finance leases and unamortized deferred financing fees, was $82.3 million. Cash increased by $204.2 million to $439.0 million by the end of fiscal 2023, compared to $234.7 million at the end of fiscal 2022.

“Also, as we look to leverage the strength of our balance sheet while maintaining flexibility, our Board of Directors has authorized the repurchase of up to $300 million of YETI’s common stock,” the company said.

During the fourth quarter of 2023, the company experienced lower-than-anticipated consumer recall participation rates and a further shift to gift card elections in lieu of product replacement remedies.

Outlook: For fiscal 2024, the company projects adjusted sales to increase between 7% and 9%. Adjusted earnings per share is expected to be between $2.45 and $2.50 (estimate: $2.68), reflecting a 9% to 11% increase.

Price Action: YETI shares are trading lower by 11% to $42.90 on the last check Thursday.