YETI(YETI) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - YETI reported a 9% increase in sales to $1.84 billion for the full year 2024, with operating income growing 18% to$ 309 million and earnings per share increasing 21% to $2.73 [46][63] - In Q4, sales increased 7% to$ 555 million, driven by strong performance in Coolers & Equipment, which grew 17% [48][49] - The company generated $220 million in free cash flow and ended the year with a cash position of approximately$ 360 million [10][64] Business Line Data and Key Metrics Changes - Coolers & Equipment sales in Q4 increased 17% to $189 million, with notable growth in hard coolers and bags [49][52] - Drinkware sales grew 3% to$ 358 million in Q4, with a slight decline in the U.S. market but over 20% growth internationally [52][54] - Direct-to-consumer (DTC) sales increased 10% to $377 million in Q4, representing 68% of total sales [55] Market Data and Key Metrics Changes - International sales grew 27% to$ 109 million in Q4, with full-year international sales increasing 30% to $339 million, representing 18% of total sales [57][58] - The U.S. Drinkware market experienced higher promotional activity and competition, impacting overall performance [53][112] Company Strategy and Development Direction - YETI's strategy focuses on brand strength, product innovation, and expanding its global presence, with significant investments in new product categories and acquisitions [6][10] - The company aims to diversify its supply chain, with a target of 80% of U.S. Drinkware capacity located outside of China by the end of 2025 [13][72] - YETI plans to continue its capital allocation strategy, including share repurchases and investments in innovation [10][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities despite anticipated macro pressures and foreign exchange headwinds in 2025 [14][78] - The company expects full-year sales growth of 5% to 7% in 2025, with stronger growth anticipated in the second half of the year [65][70] - Management highlighted the importance of maintaining brand loyalty and expanding into new markets, including Japan [39][71] Other Important Information - YETI completed three acquisitions in 2024, including Mystery Ranch and Butter Pat, which are expected to enhance product offerings [11][47] - The company is focused on maintaining a healthy balance sheet while pursuing growth opportunities [64][78] Q&A Session Summary Question: Impact of tariffs on outlook - Management indicated that a 10% tariff on goods from China would have less than a$ 10 million impact on the year, viewing it as manageable [82][84] Question: Contribution of recent acquisitions to sales - The powered cooler technology acquired is expected to be in development and not contribute to sales in 2025, but it aligns with YETI's product roadmap [88][90] Question: U.S. Drinkware growth dynamics - Management expects U.S. Drinkware to be flat in the first half of 2025 but anticipates a return to growth in the second half due to a robust innovation pipeline [96][100] Question: Competitive environment in Drinkware - Management noted increased promotional intensity but believes their diversified Drinkware strategy is resonating with consumers [112][114] Question: Innovation outlook over the next 12-24 months - Management emphasized a strong innovation pipeline and significant opportunities in the bags category, indicating a focus on new product development [117][118]