YETI(US:YETI)2023-11-09 18:50Financial Data and Key Metrics Changes - The company reported third quarter sales of $434 million, flat year-over-year, impacted by $6.3 million in gift card redemptions related to a product recall [78] - Gross profit increased 13% to $250 million, with gross margin improving to 57.8% compared to 51.3% in the same period last year [21] - Operating income decreased 3% to $71 million, representing 16.5% of sales, while net income also decreased 3% to $53 million or $0.60 per diluted share [15][30] Business Line Data and Key Metrics Changes - Sales in the coolers and equipment category decreased 8% to $172 million, while drinkware sales increased 6% to $253 million, driven by direct-to-consumer (DTC) growth [12][13] - DTC sales grew 14% to $259 million, representing 60% of total sales, with strong performance in Amazon and overall customer acquisition [84] - Wholesale sales decreased 16% to $174 million, impacted by the recall in soft coolers and a significant sell-in comparison versus the prior year [18] Market Data and Key Metrics Changes - International sales grew 20% to $68 million, representing nearly 16% of total sales, with double-digit gains across Europe, Australia, and Canada [21] - The company noted strong consumer demand across major channels, despite a cautious ordering environment in wholesale [89] Company Strategy and Development Direction - The company plans to focus on growing its global brand audience and enhancing its product portfolio through innovation [10] - A new partnership with Tractor Supply is expected to provide complementary distribution and reach new customers [53][80] - The company aims to maintain double-digit growth in DTC while returning to growth in wholesale, with a sales mix expectation of approximately 60% for the year [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming holiday season, citing a strong lineup of new products and the brand's resilience [33] - The company anticipates approximately 10% sales growth in the fourth quarter, supported by balanced category growth and new product launches [23] - Management acknowledged ongoing uncertainties in the consumer and macro environment but remains confident in the brand's strength and consumer demand [33] Other Important Information - SG&A expenses increased 20% to $179 million, driven by higher incentive compensation and investments in growth [14][28] - The company ended the third quarter with $281 million in cash, a significant increase from $78 million in the previous year [25] Q&A Session Summary Question: How do you view the sell-through and overall sales trends in recent months? - Management noted strong sell-through growth in the U.S. wholesale channel, despite a cautious ordering environment [37] Question: Can you provide insights on the new distribution agreement with Tractor Supply? - Management highlighted the long-term potential of the partnership, emphasizing its complementary nature to existing distribution channels [42][44] Question: What are the strategic objectives for 2024? - Management indicated a focus on brand, product, channels, and geographies, with plans to strengthen organizational competencies and improve operational efficiency [117]