YETI Holdings Beat Q1 Estimates Despite Products Recall, Reiterates 2023 Outlook

YETI Holdings Inc YETI reported first-quarter 2023 sales grew 3% Y/Y to $302.8 million, beating the consensus of $294.6 million.
Net sales from the Direct-to-consumer channel increased 7% Y/Y, Drinkware gained 3% Y/Y, Coolers & Equipment rose 1% Y/Y, and Wholesale channel fell 1% Y/Y.
Adjusted EPS decreased 44% Y/Y to $0.18, beating the analyst consensus of $0.16.
Adjusted gross profit increased to $160.6 million from $154.9 million, with margins expanded to 53.0% from 52.7%.
Adjusted operating income for the quarter declined 43% Y/Y to $21.7 million.
Adjusted selling, general, and administrative expenses increased 19% Y/Y to $139.0 million.
The company held $167.8 million in cash as of April 1, 2023.
In Q1, YETI recalled Hopper M30 Soft Cooler, Hopper M20 Soft Backpack Cooler, and SideKick Dry gear case for safety concerns and plans to resume the sale of the redesigned products in Q4 2023.
2023 Outlook Reiterated: YETI expects growth in adjusted sales of 3% and 5% and a decline in adjusted operating income of 3%-8%.
The company projects adjusted operating margins of 15% and 15.5% and adjusted EPS outlook of $2.12-$2.23 versus the consensus of $2.19.
"In an environment with ample uncertainty remaining across macroeconomic and consumer behavior, we continue to take a prudently cautious approach to our outlook, particularly with our largest quarters ahead. Supported by our ongoing execution across brand and product, we remain confident in our path ahead as we look to return to double-digit sales growth in the fourth quarter with the return of our full soft cooler line. In addition, we also remain confident in our ability to steadily improve our gross margin profile as we go through the year," said Matt Reintjes, President and CEO.
Price Action: YETI shares are trading higher by 1.56% at $43.74 on the last check Thursday.

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