Yeti will launch bags and packs in 2025 and is on track to expand its supply chain outside of China as it again reported strong results in the quarter.

Net sales increased by 10% in the quarter to $478.4 million year-over-year, and:

• • Coolers and equipment net sales increased 12%, which was attributed to strong performance in bags, hard coolers, and outdoor living products.
  • Drinkware net sales increased 9% to $275 million, which was due to new seasonal colorways and expanded offerings.
  • Wholesale net sales increased 14% to $197.6 million, attributed to growth in both drinkware and the coolers and equipment category.
  • Direct-to-consumer net sales increased 8% to $280.8 million, again because of growth in drinkware as well as coolers and equipment.
  • International net sales increased 30%.
  • U.S. net sales increased 7%.

“On the product side, innovation continues to be a catalyst, with drinkware delivering several highly anticipated launches in bar and tableware, underscoring the expansion opportunities we see,” said President and Chief Executive Officer Matt Reintjes on the company’s earnings call Thursday morning.

Yeti’s net income increased by 32% in the quarter to $56.3 million, and total debt was $79.1 million down from $83.3 million in the same quarter last year.

Mystery Ranch-Inspired Bags Launching in 2025

On the heels of its launch of storage containers and cookware, Yeti will launch everyday and all-weather bags, inspired by Mystery Ranch, which it acquired in January 2024.

“We’re incredibly excited about what’s in front of us in bags,” Reintjes said. “We think that is a massive global market that is right for Yeti.”

Mystery Ranch brand products performed in line with expectations, he said. Yeti’s bags will leverage Mystery Ranch’s premium design elements and will fit into Yeti’s ecosystem of products.

“And so what we’re really ultimately trying to do is surround the consumer with more use cases in their daily lives, make the brand more present and the brand more relevant, because we know we have the brand heat, we know we have the right product ethos, and we feel those opportunities to grow it,” Reintjes said.

Drinkware Production Leaving China to Reduce Tariff Threat in U.S.

Yeti began producing drinkware at a second facility outside of China in the quarter, in its effort to meet its goal to shift more than 50% of its drinkware capacity outside of China by the end of 2025. The move is to mitigate the cost impact of tariffs the incoming Trump administration said it will implement.

Those tariffs at this stage would only impact products coming into the U.S. and not other countries, Reintjes clarified.

“It’s really important to remember at the present time, there are a lot of unknowns,” he said. “So the amount of the tariffs, the specific products, the timing, etc. – there’s just too much that we don’t know to try and quantify beyond what we talked about last quarter and then reiterated today in terms of what we’re doing.”

Yeti is moving its drinkware capacity outside of China. Photo by David Bokuchava for stock.adobe.com

Reintjes said the company managed tariffs on soft goods in 2018 and 2019 successfully, and that he was confident it was well-positioned to manage additional tariffs on goods produced in China, and that price increases are always an option.

“We’ll have to see as we go through this, but I think we would look at price potentially as an option to offset any potential tariff risk,” he said.

Looking Ahead

For fiscal year 2024, Yeti expects adjusted sales to increase by 9%, compared to the previous outlook of between 8% and 10%.

Its adjusted operating income as a percentage of adjusted sales remains at approximately 16.5%, and capital expenditures will be approximately $50 million, compared to its previous outlook of between $50 million and $60 million.

“Despite some uncertainty in the macroeconomic backdrop, we believe we are well positioned as we head into the holiday season, and we continue to expect to end 2024 with strong top-line and earnings growth, as well as exceptional cash flow generation, which will further strengthen our balance sheet and enable us to continue to return value to shareholders,” Reintjes said.

Kate Robertson can be reached at [email protected].