YETI Holdings: Solid Q1 Results Led By International Growth

Core Insights - YETI Holdings, Inc. reported Q1 2024 earnings that exceeded estimates and raised full-year guidance, despite the stock being down over 20% year-to-date [1] - The company is focusing on international growth, which has shown significant potential with a 30% increase in international sales, now representing 19% of total business [2][19] - New product launches, including a $200 hard cooler and cast iron cookware, are expected to drive future growth [8][23] Financial Performance - Q1 2024 revenue was approximately $341 million, a 13% increase compared to Q1 2023, with direct-to-consumer sales at $188 million (up 12%) and wholesale sales at $153 million (up 13%) [15][19] - Gross profit for the quarter was $104.8 million, with net income of $15.9 million, reflecting growth from the previous year [24][25] - The company increased its gross margin estimate to 58% and adjusted operating margin to between 16% and 16.5% [25] International Expansion - YETI's management emphasized international growth as a top priority, with plans to build commercial organizations tailored to different regions [2] - The company has seen international sales grow by over 30% year-over-year, indicating strong demand outside the U.S. [19][28] - New hires, such as Naoji Takeda as Managing Director for the region, are expected to enhance international market success [2] Product Development - Recent product launches include innovative drinkware items like stackable cups and French presses, which have contributed to stable revenue growth [3][23] - The introduction of a new line of cast iron cookware is anticipated to significantly impact growth, aligning with the company's strategy to expand its product offerings [8][23] - The company is also focusing on enhancing its cooler product line, with a new $200 cooler aimed at capturing a broader market segment [32] Valuation and Market Position - YETI's trailing P/E ratio was reported at 19.59, with an estimated intrinsic value of approximately $44 per share [6][20] - The company maintains a healthy balance sheet, with sufficient current assets to cover liabilities despite a decrease in cash balance due to acquisitions and stock repurchases [31] - The valuation grade for YETI is currently a "C-", indicating room for improvement compared to sector peers [11][30]