YETI Holdings, Inc. Common Stock 2026 Q2 Earnings Call

Please go ahead. Good morning, and thank you for joining us to discuss YETI Holdings' second quarter fiscal 2026 results.

Leading the call today will be Matt Reintjes, Chairman and CEO, and Scott Bomar, CFO. Following our prepared remarks, we will open the call for your questions. Before we begin, we would like to remind you that some of the statements that we make today on this call may be considered forward-looking, and such forward-looking statements are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. For more information, please refer to the risk factors detailed in our most recently filed Form 10-K. We undertake no obligation to revise or update any forward-looking statements made today as a result of new information, future events, or otherwise, except as required by law. During our call today, we will discuss certain non-GAAP measures.

We use non-GAAP measures in certain contexts as we believe they more accurately represent the true operational performance and underlying results of our business. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in the press release or in the presentation posted this morning to the investor relations section of our website at yeti.com. I would now like to turn the call over to Matt.

Thanks, Arvind, and good morning. We appreciate you all joining us today. YETI's second quarter reinforced the strength, resilience, and breadth we are building across the business. We delivered nearly 9% top-line growth, operating margins and EPS that exceeded our expectations, and we executed $130 million in share repurchases in the quarter, which brings our total since 2024 to over $600 million, reflecting our focus on returning value to shareholders through the strength of our balance sheet and free cash flow generation. What I want to emphasize is what Q2 continues to tell us about the business structurally. The business today is poised for scale. It's broader, operationally sharper, and better equipped to win through uncertainty than at any other time in our history.

Despite an uneven consumer backdrop with pockets of caution, value-seeking, and ongoing macro uncertainty, YETI's customer is showing up as the brand broadens, our product platforms expand, and the team continues to deliver. That progress is not accidental. It reflects multi-year investments in brand, innovation, commercialization, and global capabilities that are now driving the model. Scott will walk through the financials and our outlook in detail, so I am going to focus my time on what matters most from an investor perspective, what we are seeing in the business, why we believe the underlying demand signals remain healthy, and how we are positioning YETI to accelerate growth and generate durable returns over time. I will start with four key takeaways from our second quarter. First, brand momentum continues to build, deepening our connection with consumers and driving increasing efficiency in our investments.

In Q2, our national brand campaign, 4 Letters, brought YETI to life through a powerful showcase of the pursuits and passions of our brand. It gave us a scalable platform to express what and who YETI stands for, one that strengthened awareness, expanded the brand's reach to new audiences, and reinforced YETI's relevance across consumer groups. We showed up in premium programming as well as digital, social, and outdoor environments, including a presence in major live sports, highlighted by the most-watched NBA Finals game since 2016. We paired that reach with our active and deep presence, local activations across core and emerging communities around the world, reinforcing our brand continues to be rooted in culture, people, and real-world use. This balance is important. Scale without credibility and trust is expensive. Credibility and trust without scale is limited. YETI is delivering both. We can appear on the biggest stages, and we also show up on the trail, among pit masters, at a surf break, on the fence at a rodeo, and walking the 18th.

That breadth is who we are and what we do, and it increasingly plays a role as we expand our innovation into more use cases, more geographies, and more everyday moments. Strong engagement across our digital ecosystem and wholesale partners reinforces our confidence that the investments we have made in brand building and storytelling are strengthening consumer connection and that brand efficiency is a compounding advantage. Second, innovation continues to drive the expansion of our product platforms across a wide range of product families. Our second quarter performance demonstrated that our brand is building upon our hard cooler and drinkwear legacy into more platforms across soft coolers, bags, and protective cases that increase daily use and reliance.

We are a brand that travels with the consumer through their day and through their week. That platform breadth gives us resilience and opportunity. It means growth isn't tethered to a single product cycle, channel, or geography. Consumers continue to respond to YETI's durability, design, and performance across categories. The combination of brand trust and product credibility is a strategic advantage, and it's what gives us staying power and allows us to enter new categories with relevance. Our Daytrip insulated bags are a great example of platform expansion. Camino Totes are another, where product momentum continues and the recent launch of the Camino Zip brings new sizes and additional functionality to an already strong product family. We also saw continued strength in smaller, more personal sized hard coolers, with the Roadie 15 performing well and the Roadie 8 generating positive early consumer response.

In cases and storage, the LoadOut GoBox family continued to build momentum across both consumer and professional use cases. As we have said before, there is more to come here, and we are excited to see where it goes. In drinkwear, we have been clear over the past few years about YETI's strategy to drive innovation and broaden our assortment across the platform. To put the category in context, we expect a roughly 600 basis point drag on our U.S. drinkwear growth in 2026 from three primary SKUs, all tied to the well-publicized but narrow, trend-driven momentum and share swapping that has played out in the category over the past few years. That is a significant headwind, but it has been more than counterbalanced by strong execution of our diversification and innovation strategy across the rest of the platform.

This is why we continue to show overall drinkwear growth versus what this significant drag would otherwise suggest. The products driving the headwind will largely complete their lap by year-end, resetting the base as we head into 2027. We continue to be very pleased with the underlying performance of the drinkwear platform. Not only new innovation, but also some of our longest-standing models within YETI drinkwear. That reinforces our view of the durable opportunity in front of this category, domestically and globally. The partners who have embraced our broad portfolio are seeing the benefits. Outperformance, new consumer reasons to buy, and stronger merchandising. Our product-led expansion has not only benefited YETI's U.S. drinkwear, but continues to drive opportunity globally. We are focused on breaking away with innovative products that address new occasions and consumer needs.

Hydration remains the growth engine, supported by core Straw Bottles, Rambler Jugs, and Stackable Cups, and core tumblers continue to validate everyday utility. While food storage, our Beverage Buckets, Rambler Bowls, and Carbon Steel Cookware demonstrate YETI's expanding opportunity in the home environment. Third, our omni-channel strategy continues to drive balanced and durable growth. In wholesale, we delivered another quarter of strong year-over-year sell-in and sell-through. This performance reflects continued support from our retail partners as they expand their commitments to the broader YETI portfolio and lean into the brand's momentum. Our wholesale approach has not changed. Premium positioning, healthy inventory, and long-term shelf productivity. Our track channel inventory exited Q2 down, continuing the trend that we have communicated in the past, reflecting a healthy, demand-driven channel. Within D2C, demand remains strong across e-commerce, Amazon, and YETI stores, with corporate sales delivering meaningful improvement versus the first quarter trend.

We continue to see untapped and scalable near and long-term global opportunity in this channel. Fourth, international remains a significant long-term growth opportunity, and we are deploying our disciplined market-by-market approach. Europe delivered strong year-over-year growth with momentum across both digital and wholesale channels, as well as continued door expansion. What is particularly encouraging is the increasing breadth and diversity in the European markets with growth across drinkwear, hard coolers, soft coolers, and bags. We are building awareness, localizing the YETI playbook, and maintaining premium positioning. Our recently opened pop-up store in Munich is a strong example. It sits in a premier, high visibility location, brings the brand to life through storytelling and service, and has already drawn consumers willing to travel meaningful distances to experience the brand. Asia is still early in its journey, but the progress is there.

Japan, in its first full year as a direct business, delivered significant growth in the quarter. We are also advancing our expansion plans for Korea, China, Indonesia, and Taiwan, and by the end of 2026, we expect to be live in 11 markets compared to four at this point last year. These are still early-stage contributions, but the consumer response reinforces our conviction in the long-term international opportunity. In Australia and New Zealand, brand strength and focused go-to-market execution supported a strong Q2 growth even as macro conditions in those markets remain challenging. In Canada, growth was positive but weaker as healthy D2C performance was offset by softer than expected wholesale sales, despite strong underlying consumer demand and sell-through trends. The big picture internationally is this: YETI is still in the early innings of a massive opportunity.