YETI(US:YETI)2021-05-13 18:02Financial Data and Key Metrics Changes - Net sales increased by 42% to $247.6 million compared to $174.4 million in the prior year period, marking the highest growth rate since going public [50][12] - Adjusted net income rose to $33.3 million or $0.38 per diluted share, compared to $9.9 million or $0.11 per diluted share during the prior year period [60] - Gross profit increased by 57% to $145.2 million, with gross margin expanding by 560 basis points to 58.6% [56][14] Business Line Data and Key Metrics Changes - Direct-to-consumer sales grew by 59% to $126.8 million, representing 51% of net sales, up from 46% in the previous year [51][52] - Wholesale net sales increased by 27% to $120.8 million, driven by strong growth in both Coolers & Equipment and Drinkware categories [53] - Drinkware net sales rose by 32% to $148.9 million, while Coolers & Equipment net sales surged by 57% to $93.5 million [54][55] Market Data and Key Metrics Changes - International net sales grew by 146% to reach 9% of total net sales, with significant contributions from Australia, Canada, and Europe [56][41] - The international business saw a more than threefold increase in Australia, reflecting strong demand and brand acceptance [41][43] Company Strategy and Development Direction - The company is focused on digital-led growth, emphasizing digital demand creation, product launches, and data analytics [11][10] - YETI aims to expand beyond its $1 billion base, with a top-line outlook increase to 20% to 22% for the full year [17][63] - The brand is committed to sustainability and has joined the Outdoor Industry Association's Climate Action Corp to measure and reduce greenhouse gas emissions [26][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the brand and product demand, despite ongoing supply chain pressures [48][16] - The company anticipates strong sales growth in Q2, with continued double-digit growth expected in the latter half of the year [63][64] - Management highlighted the importance of maintaining a healthy inventory position to meet rising demand [81][85] Other Important Information - The company launched a new collection of bags, which received positive market feedback and is seen as a significant growth opportunity [31][95] - YETI's marketing efforts have focused on brand awareness and product education, utilizing both digital and traditional channels [20][19] Q&A Session Summary Question: Inventory management and future flows - Management indicated that while inventory is down 9% year-over-year, there was a 31% sequential increase from Q4, and they expect positive inventory growth moving forward [81][82] Question: International market growth and margin composition - Management noted that the margin profile in international markets is similar across Canada, Australia, and Europe, with expectations for continued growth [83][84] Question: Luggage launch and inventory concerns - Management acknowledged challenges with stock levels for new products but emphasized a measured approach to ramping up supply [117][118] Question: Cooler business momentum - Management confirmed strong performance in the cooler category, driven by both new and returning customers, with a balanced acquisition strategy [100][99] Question: Long-term gross margin outlook - Management stated that there is no ceiling on gross margins, with expectations for continued improvement driven by channel mix and product cost efficiencies [104][102]