YETI(US:YETI)2022-08-04 18:30Financial Data and Key Metrics Changes - YETI reported a 17% increase in sales for Q2 2022, reaching $420 million compared to $357.7 million in the prior year period, although this was slightly below the planned growth range of 18% to 20% [51][66] - Gross profit increased by 5% to $219.1 million, representing 52.2% of sales, down from 58.5% in the same period last year due to higher inbound freight costs and unfavorable product mix [57][66] - Adjusted net income decreased by 10% to $54.8 million, or $0.63 per diluted share, compared to $60.7 million, or $0.68 per diluted share, in the prior year [61][66] Business Line Data and Key Metrics Changes - Wholesale sales increased by 21% to $195.2 million, driven by strong performance in coolers and equipment [52] - Direct-to-consumer (DTC) sales grew by 14% to $224.8 million, with corporate sales showing particular strength [52][66] - Coolers and equipment sales rose by 23% to $193.4 million, while drinkware sales increased by 12% to $216.1 million [54][55] Market Data and Key Metrics Changes - International sales grew by 35% to $48.1 million, representing approximately 11.5% of total sales, with balanced growth across Canada, Australia, and Europe [56][39] - The company noted that the competitive landscape for digital traffic has intensified, impacting customer acquisition efforts [86][117] Company Strategy and Development Direction - YETI aims to drive brand relevance through innovative product marketing and storytelling, focusing on high consideration from consumers [22][49] - The company is adapting its supply chain management to align with global demand and is optimistic about potential cost relief in transportation [19][66] - YETI plans to continue expanding its retail presence, with new store openings and enhancements to existing locations [36][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges in the marketplace, including elevated supply chain costs and a competitive digital environment, but expressed confidence in the brand's strength and demand durability [10][19] - The company has prudently adjusted its full-year outlook to reflect uncertainties, expecting sales growth between 15% and 17% for the year [66][72] - Management emphasized the importance of maintaining a balance between DTC and wholesale growth channels [66][106] Other Important Information - The company has introduced new products in its cooler and equipment portfolio, which are expected to drive growth in the upcoming quarters [26][28] - YETI's inventory position has improved, but it remains below pre-COVID levels, with ongoing efforts to optimize inventory management [32][63] Q&A Session Summary Question: Digital landscape challenges and initiatives - Management noted that while casual shopper traffic has declined, retention efforts have been strong, and they are focused on driving relevance and acquisition through advanced analytics and marketing strategies [81][84][88] Question: Wholesale partner order behavior - Management indicated that wholesale partners remain supportive, and they are closely monitoring inventory levels to ensure adequate supply [93][95] Question: Promotional environment and pricing strategy - Management stated that they are thoughtful about promotions, using them strategically to drive traffic without compromising brand value [98][99] Question: DTC channel performance expectations - Management expects balanced growth between DTC and wholesale, with particular strength in corporate sales and improved performance in Amazon due to easier comparisons in the second half [104][106] Question: Competitive pressure and sell-through trends - Management observed increased competition for digital traffic but noted strong sell-through trends in wholesale, with a focus on maintaining positive relationships with partners [116][120]