Shares of Yeti Holdings, Inc. fell about 11 percent Thursday, August 13, after the company reported second-quarter results that raised investor concerns over the brand’s continued sluggish growth in the Drinkware category and slower growth in the U.S. in the second half.

Shares closed at $45.47, down $5.37, or 10.6 percent on the day.

The share pressures came despite Yeti raising its EPS guidance for the year as second-quarter earnings of 67 cents came in comfortably ahead of analysts’ consensus estimate of 55 cents. The beat was due to operational efficiencies, including continued pricing discipline and product cost management;  refunds associated with IEEPA tariffs; and share buybacks.

Sales increased 9 percent to $483.9 million, in line with analyst targets.

Sales by Category
By category, Coolers & Equipment sales increased 16 percent to $232.4 million, driven by strength across bags, soft coolers, cases and storage and outdoor living.

Matthew Reintjes, president and CEO, said the healthy growth in the Coolers & Equipment segment reflects the success from platform expansion, citing strong demand for its Daytrip insulated bags, Camino totes and Camino Z as examples.

Reintjes added, “We also saw continued strength in smaller, more personal-sized hard coolers with the Roadie 15 performing well and Roadie 8 generating positive early consumer response. In cases and storage, the GoBox family continued to build momentum across both consumer and professional use cases.”

Yeti continues to expect high single-digit to low double-digit growth for Coolers & Equipment for the year.

Drinkware sales increased 2 percent to $241.4 million, driven by momentum across international markets but decelerating from the 5 percent growth seen in the first quarter. Scott Bomar, Yeti’s SVP, CFO and treasurer, said that in the U.S., Drinkware sales were flat “amidst continued Drinkware market pressure and competition. However, end consumer demand for Yeti Drinkware remained healthy, increasing mid-single digits in the U.S. during the quarter.”

Drinkware still marked its third straight quarter of growth and is still expected to see mid-single growth for the year.

Reintjes said Yeti estimates it faces a “600 basis point drag” on its U.S. drinkware in 2026 due to competitive pressures on 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.”

Yeti’s drinkware sales have been impacted by heightened competition in the insulated stainless-steel space, including competition from trendier brands such as Stanley and Owala. Reintjes added, “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 Drinkware growth versus what this significant drag would otherwise suggest.”

He said the products driving the headwind will be “largely” lapped by year-end, resetting the Drinkware category up for healthier growth from more differentiated product in 2027. The CEO said, “We’re 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.”

Sales By Region
By region, U.S. sales increased 6 percent to $391.0 million, primarily driven by growth in Coolers & Equipment. Bomar said, “We saw a robust demand in the wholesale channel as well as across marketplace and YETI retail stores.”

Yeti reiterated its expectations calling for low to mid-single-digit growth for the full year in the U.S., indicating the domestic sales will see a sharp slowdown in the second half. Sales in the U.S. were up 7 percent in the first half.

Asked in the Q&A section of the call about the softer growth expected for the U.S. in the second half, Bomar said Yeti was being “cautious” given “some consumer uncertainty” in the marketplace. He said, “We were really pleased with the demand that we saw throughout the first half. We had steady consumer demand over the course of the first 2 quarters. In fact, in the United States, our consumer demand exceeded our reported sales. So, all the trends are positive. And we don’t really see anything derailing those trends. We had improved corporate sales in the quarter, improved international sales. The innovation is working.”

Reintjes added, “We are very focused on driving innovation, driving our channels, supporting our channel partners, building this brand. And we’re not quarter-to-quarter. We’re thinking about the long-term opportunity, and that’s how we’re building the business. And so we feel really good about the first half of this year. We like the direction we’re going in the back half of this year, but we’re thinking about ’27, ’28, ’29.”

International sales increased 19 percent to $92.9 million, reflecting strong growth in Europe and Australia, as well as growth in Canada and Japan. Performance was driven by strong growth across its key channels, reflecting increased brand awareness across key markets.

YetI continues to expect to see international growth in the high teens to 20 percent for the year.

Sales By Channel
By channel, Wholesale sales increased 10 percent to $218.0 million, driven by strength across the U.S. and international markets. Bomar said, “Sell-through in the wholesale channel was robust and channel inventory remained healthy, positioning us well for the back half of the year.”

Direct-to-consumer sales increased 7 percent to $266 million, thanks to a “robust performance” in its Amazon Marketplace business as well as growth in Yeti websites and Yeti retail stores. Two new stores opened in Boston and Atlanta in the quarter.  Corporate sales declined slightly year-over-year, but improved “markedly” from the first quarter, according to Bomar.

Wholesale growth is still expected to expand at high-single to low double-digit rates while DTC is still projected to deliver mid-single-digit growth.

Profitability
Adjusted gross margin expanded 170 basis points to 59.5 percent. Continued pricing discipline, product cost management and other factors drove 110 basis points of margin. The net tariff benefit was 60 basis points, reflecting a 170-basis point benefit from refunds of IEEPA tariffs, partially offset by a 110-basis point impact from higher year-over-year realized tariff costs.

Adjusted SG&A increased 19 percent to $220 million and deleveraged 410 basis points to 45.4 percent of sales. The increase largely reflects a shift of its brand campaign to the second quarter this year from the fourth quarter last year. Higher short-term incentive compensation accrual and elevated distribution and fulfillment costs driven by ongoing inflationary pressures also represented a headwind.

Adjusted operating income decreased 7 percent to $68 million. Adjusted net income fell 8.2 percent to $50.7 million from $55.2 million a year ago although adjusted EPS increased 2 percent to 67 cents a share, reflecting share buybacks. Yeti made $130 million in share repurchases in the quarter, bringing its total since 2024 to over $600 million.

Including non-recurring items, including the IEEPA tariff refunds in the latest quarter, net earnings were $71.3 million, 94 cents a share, against $51.2 million, or 61 cents a year ago.

Balance Sheet and Liquidity Review
Yeti continued to maintain a strong liquidity position with cash of $59.8 million, $101.7 million of total debt, excluding finance leases and unamortized deferred financing fees, and $270 million of available capacity under its $300 million revolving credit facility as of the end of the second quarter of 2026. Inventory increased 5 percent to $359.1 million.

Outlook
Yeti continues to expect full-year sales growth of 7 percent to 8 percent. Growth expectations across channels, categories and geographies were reiterated.

Gross margins are now expected to increase to a range of 57.5 percent to 58 percent, up 100 points versus previous guidance as operational favorability and the impact of IEEPA tariff refunds offsets continued inflationary pressures in commodity and inbound transportation costs.

Operating expense growth is now projected to be 6 percent to 8 percent, is slightly higher than the prior outlook of 4 percent to 7 percent growth, reflecting increased inflationary pressures in distribution, fulfillment and other costs as well as continued investments in growth and productivity initiatives, including international expansion. Adjusted operating income growth is now projected between 10 percent to 12 percent for the year, up from prior guidance of 8 percent to 10 percent growth.

Image courtesy Yeti