YETI(US:YETI)2024-08-08 10:08Financial Performance - Net sales increased 15% to $463.5 million, compared to $402.6 million in the same period last year, with adjusted net sales increasing 9%[3] - Gross margin expanded 360 basis points to 57.0%, while adjusted gross margin expanded 280 basis points to 57.7%[2] - Operating income increased 34% to $67.4 million, representing 14.5% of sales, with adjusted operating income increasing 19% to $80.0 million, or 17.3% of adjusted sales[6][7] - EPS increased 34% to $0.59, with adjusted EPS increasing 23% to $0.70[7] - Net income for the three months ended June 29, 2024, was $50.4 million, compared to $38.1 million for the same period in 2023, representing a year-over-year increase of 32.5%[28] - The company reported a diluted net income per share of $0.59 for the three months ended June 29, 2024, compared to $0.44 for the same period in 2023, showing improved profitability[28] - Net income for the quarter was $66,251, up from $48,635, representing a growth of 36.5% year-over-year[32] Sales Channels - Direct-to-consumer channel sales increased 11% to $250.4 million, while wholesale channel sales increased 21% to $213.1 million[4] - The United States accounted for $386,886 of total net sales in the three months ended June 29, 2024, up from $345,888 in the prior year, a growth of 11.9%[38] - Direct-to-consumer sales accounted for $250,370 of net sales in the three months ended June 29, 2024, compared to $226,388 in the prior year, a growth of 10.6%[38] - Wholesale channel sales were $213,129 for the three months ended June 29, 2024, compared to $176,175 in the prior year, reflecting a 20.9% increase[38] - The company anticipates continued growth in both direct-to-consumer and wholesale channels, supported by new product launches and market expansion strategies[36] International Sales - International net sales increased 35%, with a third consecutive quarter of over 30% growth in the international business[2] Financial Outlook - The company raised its full-year 2024 sales outlook to an increase of 8% to 10%[15] - Adjusted net sales for Fiscal 2023 were $1,680,413, with a projected range for Fiscal 2024 between $1,814,846 and $1,848,454[40] - Adjusted operating income for Fiscal 2023 was $262,785, expected to rise to between $299,450 and $304,995 in Fiscal 2024, representing an increase in margin from 15.6% to 16.5%[40] - Adjusted net income for Fiscal 2023 was $196,987, with a forecast for Fiscal 2024 between $223,989 and $228,138, increasing the margin from 11.7% to 12.3%[40] - Adjusted net income per diluted share for Fiscal 2023 was $2.25, projected to increase to between $2.61 and $2.65 in Fiscal 2024[40] Expenses and Investments - Selling, general, and administrative (SG&A) expenses for the three months ended June 29, 2024, were $196.9 million, compared to $164.5 million in the same period last year, reflecting increased investment in growth initiatives[28] - Capital expenditures are expected to be between $50 million and $60 million, primarily for investments in technology and new product innovation[15] Debt and Equity - Total debt decreased to $80.2 million, with mandatory debt payments of $1.1 million made during the quarter[14] - Stockholders' equity decreased to $705,860 from $723,610, a decline of approximately 2.4%[30] - Total current liabilities decreased to $351,860 from $398,353, a reduction of about 11.7%[30] Inventory and Cash Flow - Inventory increased 17% to $378.3 million, driven by the re-stock of soft coolers and bags inventory[14] - Cash and cash equivalents at the end of the period were $212,937, down from $223,136, a decrease of 4.9%[32] - The company reported a net cash used in operating activities of $(47,714) compared to $28,781 in the previous year[32] Product Recalls - For the three months ended July 1, 2023, net sales decreased by $24.5 million due to product recalls, with $8.1 million attributed to direct-to-consumer (DTC) and $16.4 million to wholesale channels[16] - The total impact of product recalls on income before income taxes was a decrease of $8.7 million for the three months ended July 1, 2023[16] - The company reported a product recall adjustment of $21,700 impacting net sales for the twelve months ended December 30, 2023[41] Share Repurchase Program - The company initiated a share repurchase program of up to $300 million, with $100 million executed through an accelerated share repurchase agreement, resulting in the repurchase of approximately 2.6 million shares[18] - As of June 29, 2024, $200 million remained available under the share repurchase program, indicating ongoing commitment to returning value to shareholders[18] Operational Efficiency - The company is focused on strategic organizational realignments and business optimization to enhance operational efficiency[41]