YETI(US:YETI)2022-02-17 18:18Financial Data and Key Metrics Changes - For Q4 2021, net sales increased by 18% to $443.1 million compared to $375.8 million in the prior year period, with full-year net sales increasing by 29% to $1.41 billion [51][60] - Adjusted net income for Q4 increased by 19% to $77.4 million or $0.87 per diluted share, while full-year adjusted net income grew by 39% to $227.8 million or $2.57 per diluted share [66][79] - Gross profit for Q4 increased by 13% to $254.8 million, with a gross margin of 57.5%, down from 59.8% in the prior year [60][61] Business Line Data and Key Metrics Changes - Direct-to-consumer (DTC) net sales grew by 21% to $263.9 million in Q4, representing 60% of net sales for the period, up from 58% last year [52][53] - Wholesale net sales increased by 13% to $179.2 million in Q4, with full-year wholesale net sales increasing by 23% to $626.3 million [55][56] - Drinkware net sales for the full year grew by 32% to $832.4 million, while Coolers & Equipment net sales increased by 24% to $551.9 million [57][59] Market Data and Key Metrics Changes - International sales grew by 62% to $43.5 million in Q4, representing nearly 10% of total net sales, with full-year international sales increasing by 102% [59][41] - The international business closed 2021 at 9.5% of sales compared to 6.1% in 2020, indicating significant growth in global markets [41][60] Company Strategy and Development Direction - The company aims for 18% to 20% growth in net sales for 2022, supported by strategic price increases to offset cost pressures [16][69] - Focus on product innovation and brand building, with plans for new product launches and enhanced marketing strategies [19][28] - The company is optimizing its wholesale channel by reducing the number of independent accounts to focus on high-quality partnerships [37][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand's strength and the ability to navigate cost pressures while maintaining profitability [12][48] - The company anticipates continued challenges from supply chain disruptions but believes it has taken prudent measures to mitigate impacts [18][69] - Management highlighted the importance of customer retention and acquisition through advanced analytics and data integration [33][115] Other Important Information - The company published its inaugural ESG report, emphasizing its commitment to sustainability and conservation [46] - Cash position increased to $312.2 million, with inventory rising by 128% to $318.9 million, reflecting ongoing supply chain challenges [66][67] Q&A Session Summary Question: Supply chain visibility and pricing strategy - Management expects inbound freight rates to remain stable throughout 2022, with pricing decisions made strategically rather than reactively to cost pressures [86][90] Question: Corporate sales growth and infrastructure - Corporate sales have grown significantly, and the company continues to invest in capacity to support this area [94][96] Question: International development infrastructure - The company is replicating successful strategies from Canada and Australia in the UK and Europe, aiming for deeper market penetration [101][104] Question: Pricing elasticity and cash flow utilization - Pricing actions were taken based on market knowledge, and free cash flow is expected to be around $125 million, with plans for inventory rebuilding and potential M&A [108][110] Question: Wholesale footprint and Lowe's decision - The decision to reduce independent accounts and wind down the relationship with Lowe's was made to optimize the wholesale channel and focus on stronger partnerships [128][134]