Key Takeaways:
YETI reported Q2 adjusted EPS of $0.67, beating the $0.55 consensus, as sales rose 9% to $483.9 million.
"YETI delivered a strong second quarter, with 9% top-line growth, and stronger-than-expected profitability," Matt Reintjes, chair and chief executive officer, said.
Adjusted EPS rose 2% from $0.66 a year earlier, while GAAP EPS jumped 54% to $0.94 including an approximately $0.40 net tariff benefit. Gross margin expanded 890 basis points to 66.7%, aided by a $45.6 million IEEPA tariff refund. Coolers & Equipment sales climbed 16% to $232.4 million, and international sales rose 19% to $92.9 million.
The company raised its 2026 adjusted EPS outlook to $2.94 to $3.00, up from $2.83 to $2.89, and lifted adjusted operating margin to 14.9%. Shares opened at $50.83, near the top of a 52-week range of $31.66 to $53.99.
Wholesale channel sales rose 10% to $218.0 million, and direct-to-consumer sales gained 7% to $265.9 million, led by Amazon Marketplace and YETI retail stores. Drinkware grew 2% to $241.4 million. US sales increased 6% to $391.0 million.
Adjusted operating income fell 7% to $68.2 million, with adjusted operating margin slipping to 14.1% from 16.4% as SG&A expenses rose 17% to $229.0 million on brand campaign timing and international headcount. The company repurchased 2.8 million shares for $130 million, leaving $370 million under its $500 million authorization.
The guidance raise reflects strong year-to-date sales, gross margin strength and share repurchase timing, and assumes US tariff rates return to about 20% in the second half. Goldman Sachs upgraded YETI to buy with a $63 target in July, and the stock carries a consensus rating of moderate buy with an average price target of $53.17.
The raised outlook points to management's expectation that demand will hold through the second half, with free cash flow guided to $200 million to $225 million. Investors will watch the September 17 Investor Day in Austin for updated margin and international targets.
This article is for informational purposes only and does not constitute investment advice.
