Yeti Holdings Inc.

05/14/2026 | Press release | Distributed by Public on 05/14/2026 04:10

Quarterly Report for Quarter Ending April 4, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws and should be read in conjunction with the disclosures we make concerning risks and other factors that may affect our business and operating results, including those described in more detail in Part I "Item 1A. Risk Factors" included in our Annual Report on Form 10-K for the year ended January 3, 2026. The information contained in this section should also be read in conjunction with our consolidated financial statements and related notes and the information contained elsewhere in this Report. See also "Cautionary Note Regarding Forward-Looking Statements" immediately prior to Part I, Item I in this Quarterly Report on Form 10-Q.
The terms "we," "us," "our," "YETI," and "the Company" as used herein, and unless otherwise stated or indicated by context, refer to YETI Holdings, Inc. and its subsidiaries.
Business Overview
Headquartered in Austin, Texas, YETI is a global designer, retailer, and distributor of innovative outdoor products. From coolers and drinkware to bags and apparel, YETI products are built to meet the unique and varying needs of diverse outdoor pursuits, whether in the remote wilderness, at the beach, or anywhere life takes you. By consistently delivering high-performing, exceptional products, we have built a strong following of brand loyalists throughout the world, ranging from serious outdoor enthusiasts to individuals who simply value products of uncompromising quality and design. We have an unwavering commitment to outdoor and recreation communities, and we are relentless in our pursuit of building superior products for people to confidently enjoy life outdoors and beyond.
We distribute our products through a balanced omni-channel platform, consisting of our wholesale and direct-to-consumer ("DTC") channels. In our wholesale channel, we sell our products through select national and regional accounts and an assemblage of independent retail partners throughout the United States, Canada, Australia, New Zealand, the United Kingdom, Europe, and Japan, among others. We carefully evaluate and select retail partners that have an image and approach that are consistent with our premium brand and pricing. Our domestic national and regional specialty retailers include Dick's Sporting Goods, REI, Academy Sports + Outdoors, Bass Pro Shops, Ace Hardware, Scheels, and Tractor Supply Company. In our international regions, our notable retailers include FGL Sports and SportChek in Canada, BCF and Rebel in Australia, and GO Outdoors in the United Kingdom. We sell our products in our DTC channel to customers through our websites and YETI Authorized on the Amazon Marketplace, as well as in our retail stores. Additionally, we offer customized products with licensed marks and original artwork primarily through our DTC channel, including our corporate sales channel, on our websites, and at select retail stores. Our corporate sales program offers customized products to corporate customers for a wide-range of events and activities and in certain instances may also offer products to re-sell.
Product Introductions and Updates
During the first quarter of 2026, within our Drinkware category, we expanded our bottles and mugs offerings with the launch of a new size of the Rambler Travel Bottle and the introduction of the redesigned Straw Mug 2.0 in two sizes. We continued to broaden our coffeeware and barware offerings with the launch of the Rambler Ceramic Stackable Lowball and the Rambler Ceramic Wine Tumbler. In our Coolers & Equipment category, we expanded our pursuit bags offerings with the introduction of the Skala Collection of Hiking Packs in eight sizes. Within our soft cooler bags offerings, we further expanded the Daytrip Collection with the launch of the Insulated Snack Box in two sizes and the Insulated Box. We also introduced new seasonal colorways across our Drinkware and Coolers & Equipment categories.
Macroeconomic Conditions
Our business is exposed to and impacted by macroeconomic factors, including but not limited to uncertainty surrounding inflationary pressures, consumer confidence and purchasing behaviors, foreign currency exchange rate fluctuations, geopolitical conflicts, and government actions and policies, including changes in interest rates, tax rates, and tariff rates. The impact of such conditions on our business and results of operations for 2026 remains uncertain. Such uncertainties are exacerbated by the ongoing conflict in the Middle East. Although we have not experienced material impacts to date, the ultimate future impact of such geopolitical conflict on factors such as freight rates, raw materials costs, and consumer spending are unknown.
IEEPA Tariff Refunds
During 2025, the U.S. government implemented incremental tariffs on imports from many countries where our products are produced. In February 2026, the U.S. Supreme Court found unlawful the tariffs imposed under the International Emergency Economic Power Act ("IEEPA"). The ruling introduced the potential for importers of record, including us, to receive refunds on tariffs paid under the IEEPA. Although certain refund claims may now be submitted, significant uncertainty remains regarding the eligibility, timing and amount of any potential refunds. We estimate that we have paid approximately $66.5 million in tariffs under the IEEPA. The IEEPA tariff refunds may be subject to taxes and other adjustments or cause us to incur additional costs. Given the uncertainties, as of April 4, 2026, we determined that potential recovery of any funds was not probable. As such, we did not recognize a receivable and corresponding offset to expense related to the potential refund as of April 4, 2026. We will continue to evaluate new information and developments, and will recognize an asset or receivable as recovery becomes probable. In addition, even though the U.S. Supreme Court found unlawful the tariffs imposed under the IEEPA, the U.S. government has implemented and may implement new tariffs under other statutory authorities.
General
Components of Our Results of Operations
Net Sales. Net sales are comprised of wholesale channel sales to our retail partners and sales through our DTC channel. Net sales in both channels reflect the impact of product returns as well as discounts for certain sales programs or promotions.
We discuss the net sales of our products in our two primary categories: Coolers & Equipment and Drinkware. Our Coolers & Equipment category includes hard coolers, soft coolers, bags, outdoor equipment, and cargo, as well as accessories and replacement parts for these products. Our Drinkware category is primarily composed of our stainless-steel drinkware products and related accessories. In addition, our Other category is primarily comprised of ice substitutes and YETI-branded gear, such as shirts, hats, and other miscellaneous products.
Gross profit. Gross profit reflects net sales less cost of goods sold, which primarily includes the purchase cost of our products from our third-party contract manufacturers, inbound freight and duties, product quality testing and inspection costs, depreciation expense of our molds, tooling, and equipment, and the cost of customizing products. We calculate gross margin as gross profit divided by net sales. Our DTC channel generally generates higher gross margin than our wholesale channel due to differentiated pricing between these channels.
Selling, general, and administrative expenses. Selling, general, and administrative ("SG&A") expenses consist primarily of marketing costs, employee compensation and benefits costs, including non-cash stock-based compensation, distribution and fulfillment costs, depreciation and amortization expense, and general and administrative expenses. Our distribution and fulfillment costs include costs of our third-party warehousing and logistics operations, outbound freight costs, costs of operating on third-party DTC marketplaces, and credit card processing fees. Certain distribution and fulfillment costs will vary as they are dependent on our sales volume and our channel mix. Our DTC channel variable SG&A costs are generally higher as a percentage of net sales than our wholesale channel distribution costs.
Fiscal Year. We have a 52- or 53-week fiscal year that ends on the Saturday closest in proximity to December 31, such that each quarterly period will be 13 weeks in length, except during a 53-week year when the fourth quarter will be 14 weeks. Our fiscal year ending January 2, 2027 ("2026") is a 52-week period. The first quarter of our fiscal year 2026 ended on April 4, 2026, the second quarter ends on July 4, 2026, and the third quarter ends on October 3, 2026. Our fiscal year ended January 3, 2026 ("2025") was a 53-week period. Unless otherwise stated, references to particular years, quarters, months and periods refer to our fiscal years and the associated quarters, months, and periods of those fiscal years. The unaudited condensed consolidated financial results presented herein represent the three months ended April 4, 2026 and March 29, 2025.
Results of Operations
The discussion below should be read in conjunction with the following table and our unaudited condensed consolidated financial statements and related notes contained elsewhere in this Quarterly Report on Form 10-Q. The following table sets forth selected statement of operations data, and their corresponding percentage of net sales, for the periods indicated (dollars in thousands):
Three Months Ended
April 4, 2026 March 29, 2025
Statement of Operations
Net sales $ 380,414 100 % $ 351,128 100 %
Cost of goods sold 170,203 45 % 149,406 43 %
Gross profit 210,211 55 % 201,722 57 %
Selling, general, and administrative expenses 197,773 52 % 180,051 51 %
Operating income 12,438 3 % 21,671 6 %
Interest (expense) income, net
(1,117) - % 308 - %
Other income, net 979 - % 1,376 - %
Income before income taxes 12,300 3 % 23,355 7 %
Income tax expense (2,449) 1 % (6,746) 2 %
Net income $ 9,851 3 % $ 16,609 5 %
Comparison of the Three Months Ended April 4, 2026 and March 29, 2025
Three Months Ended
April 4,
2026 		March 29,
2025 		Change
(dollars in thousands) $ %
Net sales $ 380,414 $ 351,128 $ 29,286 8 %
Gross profit $ 210,211 $ 201,722 $ 8,489 4 %
Gross margin (gross profit as a % of net sales)
55.3 % 57.4 % (210) basis points
Selling, general, and administrative expenses $ 197,773 $ 180,051 $ 17,722 10 %
SG&A as a % of net sales 52.0 % 51.3 % 70 basis points
Net Sales
Net sales increased $29.3 million, or 8%, to $380.4 million for the three months ended April 4, 2026, compared to $351.1 million for the three months ended March 29, 2025.
Net sales in our channels were as follows:
•DTC channel net sales increased $0.6 million to $196.8 million, compared to $196.2 million in the prior year quarter, primarily due to growth across our YETI websites, Amazon Marketplace business, and YETI retail stores. This strength was offset by a decline in Corporate Sales, reflecting cautious purchasing behavior as well as a challenging growth compare in the prior year quarter. DTC channel mix was 52% in the first quarter of 2026, compared to 56% in the first quarter of 2025.
•Wholesale channel net sales increased $28.7 million, or 19%, to $183.6 million, compared to $154.9 million in the same period last year, driven by strong growth across the U.S. and our international regions, reflecting strong consumer demand.
Net sales in our two primary product categories were as follows:
•Drinkware net sales increased by $11.3 million, or 5%, to $216.9 million, compared to $205.6 million in the prior year quarter, primarily due to growth in our international regions and the U.S. The Drinkware category growth was supported by continued innovation in our Drinkware product portfolio.
•Coolers & Equipment net sales increased by $15.9 million, or 11%, to $156.1 million, compared to $140.2 million in the same period last year, primarily driven by strong performance in soft coolers, bags, hard coolers, and cargo, reflecting continued strength across core and expanded categories.
Net sales in our geographical regions were as follows:
•Net sales in the U.S. increased $21.8 million, or 8%, to $293.1 million, compared to $271.3 million in the prior year quarter, driven by growth in both Coolers & Equipment and Drinkware, reflecting solid consumer demand trends. Demand was strong in the wholesale channel as well as YETI websites, Amazon Marketplace, and YETI retail, partially offset by a decline in Corporate Sales.
•Net sales in international locations increased $7.5 million, or 9%, to $87.3 million, compared to $79.9 million in the prior year quarter, reflecting strong growth in Europe, as well as growth in Australia and Canada, and continued momentum in Japan. Strong demand in the wholesale channel as well as Amazon Marketplace was partially offset by a decline in Corporate Sales. Net sales in international locations represented 23% of total net sales in both the first quarter of 2026 and 2025.
Gross Profit
Gross profit increased $8.5 million, or 4%, to $210.2 million, compared to $201.7 million in the prior year quarter. Gross margin rate decreased 210 basis points to 55.3% from 57.4% in the prior year quarter, primarily due to the following factors:
•higher tariff costs, which unfavorably impacted gross margin by 280 basis points;
•a decrease in the mix of our DTC channel net sales and Drinkware net sales, which unfavorably impacted gross margin by 70 basis points; and
•higher inbound freight, which unfavorably impacted gross margin by 50 basis points.
These decreases were partially offset by:
•favorable foreign currency exchange rates, which favorably impacted gross margin by 80 basis points;
•lower product costs, which favorably impacted gross margin by 60 basis points;
•the impact of selective price increases on certain products implemented during the second quarter of 2025 and the first quarter of 2026, which favorably impacted gross margin by 30 basis points; and
•other impacts, which favorably impacted gross margin by 20 basis points.
Selling, General, and Administrative Expenses
SG&A expenses increased $17.7 million, or 10%, to $197.8 million for the three months ended April 4, 2026, compared to $180.1 million for the three months ended March 29, 2025. As a percentage of net sales, SG&A expenses increased 70 basis points to 52.0% from 51.3% in the prior year quarter. The increase in SG&A expenses was primarily driven by:
•an increase in general and administrative expenses of $5.8 million (increasing SG&A as a percent of sales by 90 basis points) mainly due to growth investments in technology and facilities, higher professional fees, as well as asset impairments in the current year quarter;
•an increase in distribution and fulfillment expenses of $4.7 million (decreasing SG&A as a percent of sales by 10 basis points) primarily due to higher third-party logistics fees, outbound freight, and online marketplace fees;
•an increase in employee compensation and benefits expenses of $3.6 million (decreasing SG&A as a percent of sales by 20 basis points), including investments in headcount to support our international expansion, partially offset by lower non-cash stock-based compensation expense;
•an increase in marketing and advertising expenses of $2.7 million (increasing SG&A as a percent of sales by 10 basis points); and
•an increase in depreciation and amortization expense of $0.8 million (no impact on SG&A as a percent of sales).
Non-Operating Expenses
Interest expense, net was $1.1 million for the three months ended April 4, 2026. Interest income, net was $0.3 million for the three months ended March 29, 2025. The change versus the prior year quarter was primarily due to a decrease in interest income.
Other income was $1.0 million for the three months ended April 4, 2026, compared to $1.4 million for the three months ended March 29, 2025. The change versus the prior year quarter was primarily due to lower foreign currency gains on intercompany balances.
Income tax expense was $2.4 million for the three months ended April 4, 2026, compared to $6.7 million for the three months ended March 29, 2025. The decrease in income tax expense was primarily due to lower income before income taxes. The effective tax rate was 19.9% for the three months ended April 4, 2026, compared to 28.9% for the three months ended March 29, 2025. The lower effective tax rate was primarily due to the impact of a discrete tax benefit related to stock-based compensation in the three months ended April 4, 2026.
Liquidity and Capital Resources
General
Our cash requirements have principally been for working capital purposes, long-term debt repayments, and capital expenditures. Our plans for cash may periodically include repurchasing shares of our common stock pursuant to our Share Repurchase Program described below. We fund our working capital, capital investments, and other cash needs from cash flows from operating activities, cash on hand, or borrowings available under our revolving credit facility (the "Revolving Credit Facility"). We believe that our current operating performance, operating plan, strong cash position, and borrowings available under our Revolving Credit Facility will be sufficient to satisfy our liquidity needs, cash requirements, and plans for cash for at least the next twelve months and foreseeable future.
Current Liquidity
As of April 4, 2026, we had a cash balance of $127.8 million, working capital (excluding cash) of $208.9 million, and $300.0 million of borrowings available under the Revolving Credit Facility.
Credit Facility
Our Credit Facility provides for a $300.0 million Revolving Credit Facility and an $84.4 million term loan (the "Term Loan A").
At April 4, 2026, we had $72.8 million principal amount of indebtedness outstanding under the Term Loan A under the Credit Facility and no outstanding borrowings under the Revolving Credit Facility. The weighted-average interest rate for borrowings under the Term Loan A was 5.55% during the three months ended April 4, 2026.
The Credit Facility requires us to comply with certain covenants, including financial covenants regarding our total net leverage ratio and interest coverage ratio. Fluctuations in these ratios may increase our interest expense. Failure to comply with these covenants and certain other provisions of the Credit Facility, or the occurrence of a change of control, could result in an event of default and an acceleration of our obligations under the Credit Facility or other indebtedness that we may incur in the future. At April 4, 2026, we were in compliance with all covenants and expect to remain in compliance with all covenants under the Credit Facility.
Share Repurchase Program
In 2024, our Board of Directors authorized the repurchase of up to $300.0 million of YETI's common stock (the "Share Repurchase Program"), excluding fees, commissions, and excise tax due under the Inflation Reduction Act of 2022. Repurchases under the Share Repurchase Program may be made from time to time at prevailing prices in the open market, through various methods, including, but not limited to, open market, privately negotiated, or accelerated share repurchase transactions. Repurchases under the Share Repurchase Program may also be made pursuant to a plan adopted under Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The timing, manner, price, and actual amount of share repurchases will be determined by management based on various factors, including, but not limited to, stock price, economic and market conditions, other capital allocation needs and opportunities, and corporate and regulatory considerations. YETI has no obligation to repurchase any amount of our common stock, and such repurchases may be suspended or discontinued at any time. All shares repurchased under the Share Repurchase Program are held as treasury stock.
During 2024, we entered into two separate accelerated share repurchase agreements, which resulted in our repurchase of approximately 5.1 million shares of YETI's common stock for an aggregate of $200.0 million. In 2025, our Board of Directors approved a $350.0 million increase to the Share Repurchase Program. We subsequently repurchased approximately 8.0 million shares of YETI's common stock on the open market for approximately $300.0 million during 2025. As of January 3, 2026, approximately $152.0 million remained available for repurchases under the Share Repurchase Program. In May 2026, our Board of Directors approved an approximately $348.0 million increase to the Share Repurchase Program, resulting in $500.0 million remaining available as of May 14, 2026.
See Note 7-Stockholders' Equity of the Consolidated Financial Statements for additional information about the Share Repurchase Program.
Material Cash Requirements
There have been no material changes in our material cash requirements for contractual and other obligations compared to the disclosures included under "Material Cash Requirements" included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended January 3, 2026 filed with the U.S. Securities and Exchange Commission (the "SEC").
Cash Flows from Operating, Investing, and Financing Activities
The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated (in thousands):
Three Months Ended
April 4,
2026 		March 29,
2025
Cash flows provided by (used in):
Operating activities $ (32,649) $ (80,296)
Investing activities $ (14,527) $ (15,510)
Financing activities $ (11,588) $ (6,471)
Operating Activities
Cash flows related to operating activities are dependent on net income, non-cash adjustments to net income, and changes in working capital. The decrease in cash used in operating activities during the three months ended April 4, 2026 compared to cash used in operating activities during the three months ended March 29, 2025 is primarily due to a favorable impact from changes in working capital, partially offset by a decrease in net income, excluding non-cash expenses.
Investing Activities
The decrease in cash used in investing activities during the three months ended April 4, 2026 was primarily due to lower purchases of intangible assets, partially offset by higher purchases of property and equipment.
Financing Activities
The increase in cash used in financing activities during the three months ended April 4, 2026 was primarily due to higher taxes paid for the net share settlement of stock-based awards.
Recent Accounting Pronouncements
For a description of recently issued and adopted accounting pronouncements, including the respective dates of adoption and expected effects on our results of operations and financial condition, see "Recently Adopted Accounting Pronouncements" in Note 1 of the Unaudited Condensed Consolidated Financial Statements.
Critical Accounting Policies and Estimates
Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates. A discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results is included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended January 3, 2026 filed with the SEC. There have been no significant changes to these critical accounting policies.
Yeti Holdings Inc. published this content on May 14, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 14, 2026 at 10:11 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]