YETI Q2 Earnings Call Highlights
YETI (NYSE:YETI) reported second-quarter fiscal 2026 sales growth of 9%, supported by gains across coolers and equipment, wholesale, direct-to-consumer channels and international markets. The company also raised its full-year operating margin and adjusted earnings outlook, while maintaining its sales growth forecast.
Chief Executive Officer Matt Reintjes said the quarter reflected the benefits of investments in brand development, product innovation, commercialization and international capabilities. He said consumer behavior remains uneven, with pockets of caution and value-seeking, but that demand for the brand has remained healthy across categories and channels.
“The business today is poised for scale,” Reintjes said, describing YETI as broader, operationally sharper and better positioned to manage uncertainty than in prior periods.
Sales Growth Led by Coolers, Equipment and International
Second-quarter sales totaled approximately $484 million, up 9% from a year earlier. Coolers and equipment revenue increased 16% to $232 million, driven by bags, soft coolers, cases and storage, and outdoor-living products. The company cited strong demand for its Daytrip insulated bags and Camino tote products, as well as momentum in personal hard coolers, including the Roadie 15 and newly launched Roadie 8.
Drinkware sales rose 2% to $241 million, marking the category’s third consecutive quarter of growth. U.S. drinkware sales were flat amid category competition, though YETI said U.S. end-consumer demand increased by a mid-single-digit percentage during the quarter. International markets and new product innovation supported overall drinkware growth.
Reintjes said YETI expects roughly a 600-basis-point drag on U.S. drinkware growth in 2026 from three SKUs associated with a narrow, trend-driven period in the category. He said the products are expected to largely lap their comparisons by year-end, resetting the business heading into 2027.
- Wholesale sales increased 10% to $218 million.
- Direct-to-consumer sales rose 7% to $266 million.
- U.S. sales increased 6% to $391 million.
- International sales grew 19% to $93 million.
Chief Financial Officer Scott Bomar said wholesale sell-through was robust and inventory in the channel remained healthy. Direct-to-consumer growth was supported by marketplaces, e-commerce and YETI retail stores. The company opened stores in Boston and Atlanta during the quarter.
International growth was led by Europe, Australia and Japan. YETI said Europe saw strong digital, marketplace and wholesale demand, while Japan continued to gain traction in its first full year as a direct business. The company has expanded to more than 500 wholesale doors in Japan and recently launched an e-commerce site in the country.
Canada produced positive sales growth, though results were below YETI’s expectations as cautious wholesale inventory purchasing offset strong direct-to-consumer performance and consumer sell-through.
Margins Improve Despite Cost and Tariff Pressures
Adjusted gross profit rose 12% to $288 million, while adjusted gross margin expanded 170 basis points to 59.5%. Bomar attributed the improvement to pricing discipline, product cost management, supply-chain optimization and other operational factors.
The quarter also included an $8.2 million benefit from refunds of International Emergency Economic Powers Act tariffs previously expensed in 2026. The refunds contributed 170 basis points to adjusted gross margin, partly offset by a 110-basis-point impact from higher year-over-year realized tariff costs.
Adjusted selling, general and administrative expense increased 19% to $220 million, or 45.4% of sales. The increase reflected the timing of YETI’s “Four Letters” brand campaign, which moved into the second quarter from the fourth quarter a year earlier, as well as higher incentive compensation accruals, productivity investments and elevated distribution and fulfillment costs.
Adjusted operating income declined 7% to $68 million, or 14.1% of sales. Adjusted net income declined 8% to $51 million, while adjusted diluted earnings per share increased 2% to $0.67.
Bomar said the company continues to face inflation in materials including stainless steel, magnets, resins and oil-derived products, along with foreign-exchange, fuel and transportation pressures. He said YETI is pursuing productivity initiatives, supply-chain diversification and additional raw-material sourcing to mitigate those costs.
Outlook Raised for Margins and Earnings
YETI maintained its forecast for full-year sales growth of 7% to 8%. It continues to expect high-single-digit to low-double-digit growth in coolers and equipment, mid-single-digit drinkware growth, high-single-digit to low-double-digit wholesale growth, and mid-single-digit direct-to-consumer growth.
The company continues to project low- to mid-single-digit U.S. sales growth and international growth in the high teens to 20% range for 2026.
YETI raised its adjusted gross margin outlook to 57.5% to 58%, an increase of 100 basis points from prior guidance. The company now expects adjusted operating margin of approximately 14.9%, compared with previous guidance of 14.6%, and adjusted operating income growth of 10% to 12%.
Adjusted diluted EPS is now projected at $2.94 to $3.00, representing growth of 19% to 21%. The prior forecast was $2.83 to $2.89. The revised outlook includes a $0.08 benefit from tariff refunds, partially offset by inflationary costs. YETI’s outlook assumes tariff rates return to approximately 20% beginning in September.
The company expects capital expenditures of $60 million to $70 million and free cash flow of $200 million to $225 million for the year.
Capital Allocation and Investor Day
YETI repurchased 2.8 million shares for $130 million during the quarter, bringing total repurchases since 2024 to more than $600 million, according to Reintjes. As of July 4, approximately $370 million remained under the company’s repurchase authorization.
The company ended the quarter with about $60 million in cash, $359 million in inventory and approximately $102 million in debt excluding finance leases and deferred financing fees.
Management said its capital-allocation priorities remain focused on reinvesting for growth, evaluating selective acquisition opportunities and returning capital to shareholders when cash flow is available. YETI plans to provide a broader look at its brand, innovation pipeline, commercialization strategy and financial model at an Investor Day in Austin on Sept. 17.
About YETI (NYSE:YETI)
YETI Holdings, Inc is an American outdoor and lifestyle products company known for its premium, performance-driven coolers, drinkware and accessories. The company's portfolio includes hard coolers under its flagship Tundra series, soft coolers in the Hopper line, and vacuum-insulated drinkware sold under the Rambler brand. YETI's products are engineered for durability, temperature retention and rugged outdoor use, targeting consumers ranging from avid anglers and hunters to outdoor enthusiasts and everyday users seeking high-quality insulated containers.
Founded in 2006 by brothers Roy and Ryan Seiders in Austin, Texas, YETI began with a focus on building a better cooler that could withstand extreme conditions and maintain ice retention longer than traditional alternatives.
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