Yeti Q4 Sales Rise 18%

YETI Reports Fourth Quarter and Fiscal Year 2021 Results

Fourth Quarter Net Sales Increased 18%; Full Year Increased 29%

Full Year Operating Margin of 19.5%; Adjusted Operating Margin of 20.9%

Fourth Quarter EPS Increased 15%; Adjusted EPS Increased 18%

Full Year EPS Increased 36%; Adjusted EPS Increased 37%

Provides Fiscal Year 2022 Outlook

AUSTIN, Texas–(BUSINESS WIRE)– YETI Holdings, Inc. (“YETI”) (NYSE: YETI) today announced its financial results for the fourth quarter and fiscal year ended January 1, 2022. The 13-week fourth quarter and 52-week fiscal year ended January 1, 2022 are compared to the 14-week fourth quarter and 53-week fiscal year ended January 2, 2021.

Matt Reintjes, President and Chief Executive Officer, commented, “2021 was an incredible year for YETI, achieving several milestones during our fourth year as a public company. Today we are reporting nearly 30% net sales growth, adjusted operating margin expansion to approximately 21%, and balance sheet strength with over $300 million of cash on hand. We drove demand across our omni-channel with 35% growth in our DTC business, delivered strong performance in both our product categories of drinkware and coolers and equipment, and approached a 10% international sales mix. This performance was capped by fourth quarter net sales growth of 18%, exceeding the high-end of our outlook despite the many supply chain challenges facing the entire industry. Looking forward, as we continue to maneuver through the varied supply chain disruptions and pressures, I remain incredibly confident in the demand for the YETI brand.”

For the Three Months Ended January 1, 2022 (13 Week Period)

Net sales increased 18% to $443.1 million, compared to $375.8 million during the same period last year.

• Direct-to-consumer (“DTC”) channel net sales increased 21% to $263.9 million, compared to $217.8 million in the prior year quarter, driven by strong performance in both Drinkware and Coolers & Equipment. The DTC channel grew to 60% of net sales, compared to 58% in the prior year period.

• Wholesale channel net sales increased 13% to $179.2 million, compared to $158.0 million in the same period last year, primarily driven by Drinkware.

• Drinkware net sales increased 21% to $285.6 million, compared to $235.7 million in the prior year quarter, primarily driven by the continued expansion of our Drinkware product offerings, including the introduction of new colorways and sizes, and strong demand for customization.

• Coolers & Equipment net sales increased 13% to $151.6 million, compared to $134.3 million in the same period last year, driven by strong performance in bags, outdoor living products, hard coolers and soft coolers.

Gross profit increased 13% to $254.8 million, or 57.5% of net sales, compared to $224.8 million, or 59.8% of net sales, in the fourth quarter of 2020. The 230 basis point decrease in gross margin was primarily driven by higher inbound freight rates, the unfavorable impact of the non-renewal of the Global System of Preferences (“GSP”) program on import duties and product input cost inflation, partially offset by lower inventory reserves.

Selling, general, and administrative (“SG&A”) expenses increased 12% to $161.1 million, compared to $143.4 million in the fourth quarter of 2020. As a percentage of net sales, SG&A expenses decreased 190 basis points to 36.3% from 38.2% in the prior year period, primarily driven by lower planned marketing expenses, partially offset by higher variable expenses.

Operating income increased 15% to $93.7 million, or 21.2% of net sales, compared to $81.4 million, or 21.7% of net sales during the prior year quarter.

Adjusted operating income increased 18% to $99.8 million, or 22.5% of net sales, compared to $84.5 million, or 22.5% of net sales during the same period last year.

Net income increased 17% to $72.9 million, or 16.4% of net sales, compared to $62.4 million, or 16.6% of net sales in the prior year quarter; Net income per diluted share increased 15% to $0.82, compared to $0.71 per diluted share in the prior year quarter.

Adjusted net income increased 19% to $77.4 million, or 17.5% of net sales, compared to $65.2 million, or 17.4% of net sales in the prior year quarter; Adjusted net income per diluted shareincreased 18% to $0.87, compared to $0.74 per diluted share in the prior year quarter.

For the Twelve Months Ended January 1, 2022 (52 Weeks)

Net sales increased 29% to $1,411.0 million, compared to $1,091.7 million in the prior year.

• DTC channel net sales increased 35% to $784.7 million, compared to $580.9 million in the prior year period, driven by both Drinkware and Coolers & Equipment. The DTC channel grew to 56% of net sales, compared to 53% in the prior year.

• Wholesale channel net sales increased 23% to $626.3 million, compared to $510.9 million in the same period last year, primarily driven by both Drinkware and Coolers & Equipment.

• Drinkware net sales increased 32% to $832.4 million, compared to $628.6 million in the prior year period, due to the continued expansion of our Drinkware product offerings, including the introduction of new colorways and sizes, and strong demand for customization.

• Coolers & Equipment net sales increased 24% to $551.9 million, compared to $446.6 million in the same period last year. The strong performance was driven by growth in bags, outdoor living products, soft coolers and hard coolers.

Gross profit increased 30% to $816.1 million, or 57.8% of net sales, compared to $628.8 million, or 57.6% of net sales in the prior year. Improvements in gross margin of 210 basis points were primarily driven by lower inventory reserves as well as a favorable mix shift to our DTC channel and product cost improvements, largely offset by 190 basis points of contraction primarily driven by higher inbound freight rates and the unfavorable impact of the non-renewal of the GSP program on import duties.

Selling, general, and administrative expenses increased 31% to $541.2 million, compared to $414.6 million in the prior year. The 2020 period included the benefit of cost reduction initiatives implemented in response to COVID-19. As a percentage of net sales, SG&A expenses increased 40 basis points to 38.4% from 38.0% in the prior year period. This increase was due to an increase in variable expenses, driven by the increased mix of our faster growing and higher gross margin DTC channel coupled with higher marketing expense.

Operating income increased 28% to $274.9 million, or 19.5% of net sales, compared to $214.2 million, or 19.6% of net sales during the prior year.

Adjusted operating income increased 32% to $295.1 million, or 20.9% of net sales, compared to $224.3 million, or 20.5% of net sales during the same period last year.

Net income increased 36% to $212.6 million, or 15.1% of net sales, compared to $155.8 million, or 14.3% of net sales in the prior year; Net income per diluted share increased 36% to $2.40, compared to $1.77 per diluted share in the prior year.

Adjusted net income increased 39% to $227.8 million, or 16.1% of net sales, compared to $164.2 million, or 15.0% of net sales in the prior year period; Adjusted net income per diluted shareincreased 37% to $2.57, compared to $1.87 per diluted share in the same period last year.

Balance Sheet and Cash Flow Highlights

Cash increased to$312.2 million, compared to $253.3 million at the end of Fiscal 2020.

Inventory increased 128% to $318.9 million, compared to $140.1 million at the end of Fiscal 2020, primarily due to the intentional inventory purchase order reductions taken during 2020 in response to COVID-19. Additionally, inventory was impacted by higher in-transit inventories in Fiscal 2021 due to extended lead times from ongoing supply chain disruptions, as well as the impact of higher inbound freight costs. The inventory increase represents a CAGR of 31% since the same period in 2019 compared to our net sales CAGR of 24% from full year 2019 to full year 2021.

Total debt, excluding finance leases and unamortized deferred financing fees, was $112.5 million, compared to $135.0 million at the end of the Fiscal 2020. During Fiscal 2021, YETI made mandatory debt payments of $22.5 million. At the end of Fiscal 2021, our cash balance exceeded total debt by $199.7 million.

Fiscal 2022 Outlook

Mr. Reintjes concluded, “Our strategic focus is unchanged in 2022, as we will continue to broaden reach and awareness of the brand, deliver uncompromising innovation, enhance and optimize our digital capabilities and expand our channel reach to scale internationally. Our net sales outlook of 18% to 20% growth is solidly above the high end of our long-term target. It reflects our strong conviction in our product pipeline, the opportunity to fulfill robust demand, and the ability to engage our global consumer. Despite the expectation of significant supply chain cost headwinds throughout the year, we remain focused on prioritizing strategic investments to support the long-term sustainable growth of the YETI brand.”

For Fiscal 2022, YETI expects:

• Net sales to increase between 18% and 20% with sales growth weighted to the second half of the year;

• Operating income as a percentage of net sales ofapproximately 18.5% and operating income to increase between 13% to 15%;

• Adjusted operating income as a percentage of net sales of approximately 20% and adjusted operating income to increase between 13% to 15%;

• An effective tax rate of approximately 24% (versus 21.8% in the prior year period);

• Net income per diluted share between $2.62 and $2.67, reflecting a 9% to 11% increase, with earnings growth weighted to the second half of the year;

• Adjusted net income per diluted share between $2.82 and $2.86, reflecting a 10% to 11% increase, with earnings growth weighted to the second half of the year;

• Diluted weighted average shares outstanding of approximately 88.9 million; and
• Capital expenditures of approximately $60 million primarily to support investments in technology and new product innovation and launches.

About YETI Holdings, Inc.

Headquartered in Austin, Texas, YETI is a global designer, retailer, and distributor of innovative outdoor products. From coolers and drinkware to bags and apparel, YETI products are built to meet the unique and varying needs of diverse outdoor pursuits, whether in the remote wilderness, at the beach, or anywhere life takes you. By consistently delivering high-performing, exceptional products, we have built a strong following of brand loyalists throughout the world, ranging from serious outdoor enthusiasts to individuals who simply value products of uncompromising quality and design. We have an unwavering commitment to outdoor and recreation communities, and we are relentless in our pursuit of building superior products for people to confidently enjoy life outdoors and beyond. For more information, please visit www.YETI.com.