Yeti Holdings, Inc. reported the fourth quarter delivered its strongest growth quarter of 2025, thanks to healthy demand for its products, but management told analysts growth was restrained by continued cautious ordering patterns by retailers and supply chain constraints in the cooler category, and warned margins in the first half of the current year would feel a notable impact from tariffs.

Fourth-quarter results topped consensus estimates. Full-year EPS guidance is below current-year guidance, but sales guidance exceeded analyst targets.

Shares of Yeti fell $2.34, or 4.7 percent, on Thursday on the disappointing guidance, continued concerns over tariffs, and a surprise CFO transition. Shares had seen a strong run-up recently after trading as low as $$31.66 last October.

On a call with analysts, Matt Reintjes, president and CEO, highlighted some key points, including 6 percent sales growth in drinkware and 25 percent internationally, both marking Yeti’s best quarterly performance of the year.

Gross margins also exceeded expectations, “even in an intense tariff and promotional holiday environment, thanks to Yeti’s premium brand strengths, innovation across the portfolio, and operational execution.”

Reintjes said Yeti expects net sales to increase 6 percent to 8 percent after expanding 2 percent in 2025 and is on the path back towards its goal of high single-digit to low double-digit growth.

He said, “We remain grounded in the same strategic growth priorities that have guided us through the past few years: driving product innovation, broadening our brand and addressable market, expanding our global presence. These pillars position us well as we enter 2026 with a higher capacity innovation engine, solid global demand signals, and a more diversified growth model.”

Fourth-Quarter Results
Sales increased 7 percent to $583.7 million, slightly ahead of the consensus estimate of $582.4 million. Adjusted sales, which exclude the impact of the recall reserves in the prior year quarter, increased 5 percent to $583.7 million. The growth was well balanced across categories and channels, with international growth seen as the standout.

Sales by Channel
Direct-to-consumer (DTC) channel sales expanded 7 percent to $394.3 million, due to growth across all DTC businesses, including its Amazon Marketplace, Corporate Sales, Yeti retail stores, and Yeti websites. Excluding the impact of recall reserves in the prior year, DTC channel-adjusted sales increased 5 percent.

Reintjes said Yeti-owned ecommerce “saw strong engagement around innovation, limited editions, and customization offset by what we believe in the U.S. is elevated cross-channel shopping impacting traffic and increased promotional activity.”

AI-driven improvements in product discovery, search, and customer service are helping drive conversion on yeti.com. He said Amazon “remains an effective reach engine” while corporate sales “delivered another healthy quarter through reach, customization capabilities, and a broadening product assortment.” Owned retail benefited from “healthy conversion” and the appeal of store customization.

Wholesale channel sales increased 6 percent to $189.4 million, primarily driven by growth in international regions. In the US wholesale channel, sell-through continued to outpace sales into the channel, driving a year-over-year decline in inventory levels. This cautious wholesale buying is a continuation of the trend we have seen throughout the year.

Reintjes said, “U.S. wholesale showed ongoing buying caution, as inventory planning remains tight among many partners with our tracked channel inventory down significantly in 2025. Sell-through continued to outpace sell-in, supporting confidence in underlying demand for the brand and innovation, and sustained momentum heading into 2026.”

He also said the brand was “encouraged by the opportunities we see with new strategic distribution partners, which broaden the brand’s reach and support our expanding product portfolio.”

Sales by Category
Drinkware sales increased 6 percent to $380.0 million, primarily driven by growth in international markets. The overall growth in drinkware, as expected, saw notable improvement compared to the trends observed during the first three quarters of 2025. In the U.S., drinkware sales were flat year-over-year, and headwinds from a promotional market, continued cautious wholesale buying, and inventory constraints driven by its supply chain transition were offset by continued expansion and innovation of drinkware offerings.

Reintjes said, “While certain trend-driven styles in the category remained highly promotional, our broadening product platforms drove the business, and we entered 2026 with a refreshed assortment, stronger global traction, and clear line of sight to continued growth.”

Among the recent additions is the Silo 40-ounce and half-gallon jugs made for job sites and team sports sidelines; Yonder shaker bottles; new leakproof products with travel straw mugs; expanded color and personalization capabilities including collegiate, NFL, and team-inspired designs; and a recent extension of premium ceramic line formats.

Said the CEO, “We also advanced our lineup through early limited release carbon steel cookware and grew our offering in vacuum sealed food jars and bowls. We have additional innovation waves planned for 2026, supporting the acceleration we expect during the year. These initiatives create broader uses for consumers, expanding our addressable market beyond traditional drinkware.”

Coolers & Equipment sales increased 7 percent in the quarter to $192.3 million, primarily driven by strong performance in soft coolers, bags, and cargo. The modest gain reflects DayTrip and Camino supply constraints and tough comparisons against a 17 percent gain in the year-ago fourth quarter. Excluding the impact of recall reserves in the prior year period, Coolers & Equipment channel-adjusted sales increased 2 percent.

Reintjes said demand for Coolers & Equipment “remains exceptionally healthy, with strong sell-through across DayTrip soft cooler bags and Camino totes. Camino continued to broaden consumer reach, while DayTrip remained a standout performer in soft cooler bags.”

Reintjes said while hard coolers faced challenging comparisons against a robust year-ago launch, the category continues “to be a core product platform with particular consumer demand for high-performing, more personal-sized coolers.” Strong interest also continues to be seen in protective cases, with Yeti recently introducing a GoBox One entry-price-point option to further address the opportunity.

Reintjes said that while Coolers & Equipment category sell-through “was strong, sell-in was constrained by supply limitations, most notably in DayTrip soft cooler bags and Camino.” “Healthy growth” is expected in 2026 as new production capacity comes online in the first half of the year. He said, “We are combining improved supply with some of our most exciting C&E innovation, which continues at an up-tempo pace, including newly released DayTrip snack boxes, plus additional innovation across the DayTrip family coming later this year.”

In other categories within Coolers & Equipment, Scala, Yeti’s first family of hike packs, was launched last week. Reintjes said Scala combines “the proven foundational DNA from our Mystery Ranch packs with a new design from our Denver design group in a category consumers have been asking us to enter. Built for durability, comfort, and easy access, Scala serves hikers and outdoor explorers, opening meaningful expansion in the core outdoor environment.”

Yeti acquired the Mystery Ranch backpack brand in early 2024.

Other planned launches in the Coolers & Equipment segment this year include the broadening of Camino tote offerings, innovation within the Roadie family of hard coolers “in a personal, everyday use format,” and the continued expansion of the GoBox family across small to large sizes.

Sales by Region
U.S. sales increased 2 percent to $447.8 million. Excluding the impact of recall reserves in the prior year period, adjusted sales in the U.S. were flat.

International sales and adjusted sales both increased 25 percent to $135.9 million, reflecting growth across all regions, led by Australia and Europe, as well as continued momentum in Japan, which launched in the second quarter of 2025. International represented 23 percent of Q4 sales, compared with 20 percent in the prior-year period. ‘

Profitability
Net income increased 10 percent to $58.2 million, or 74 cents a share, against $53.2 million, or 63 cents, in the year-ago quarter. Adjusted net income fell 15 percent to $71.8 million, or 92 cents a share, from $84.6 million, or $1.00, in the prior year. Adjusted net income per share in the current quarter included an unfavorable net impact from higher tariff costs of approximately 15 cents a share.

On an adjusted basis, operating income slid 14 percent to $94.7 million, or to 16.2 percent of adjusted sales, compared to 19.9 percent during the same period last year. The adjusted operating income margin of 16.2 percent reflects an approximately 250-basis-point unfavorable net impact from higher tariff costs.

Adjusted gross margins eroded 180 basis points to 58.4 percent from 60.2 percent a year ago. The decline reflects a 310-basis-point unfavorable impact from higher tariff costs, partially offset by lower product costs and selective price increases implemented in the second quarter of 2025.

Adjusted SG&A expenses increased 190 basis points to 42.2 percent, reflecting higher marketing expenses, growth investments in technology and facilities, and higher employee compensation, partially offset by leverage in distribution and fulfillment expenses on higher sales.

CFO Transition
Yeti surprised investors by announcing that Mike McMullen, Yeti’s CFO since February 2023, would stepping down from his position, effective February 23. He will be replaced by Scott Bomar, who has been with Home Depot for nearly two decades, most recently serving as SVP of finance. McMullen will continue in an advisory role through May.

On the analyst call,  Reintjes thanked McMullen, who had worked for Yeti since 2016 and helped guide their 2018 IPO offering. He said, “Mike’s been a great partner to me, and the strong results we reported today mark an appropriate send off from his successful tenure at Yeti.”

At the same time, he cited Bomar’s credentials at Home Depot, offering “decades of financial and operational leadership expertise across a large-scale, complex, and growing organization” as well as experience with leading teams responsible for predictive insights and analytics. He said, “These experiences give us a lot of confidence as we continue to focus on scale and profitable growth at Yeti.”

Outlook
For the current year, Yeti forecast adjusted EPS in the range of $2.77 to $2.83 (midpoint $2.80), which was below analysts’ consensus estimate of $2.87. Sales are expected to increase between 6 percent and 8 percent in the current year to a range of $1.98 billion and $2.02 billion, above the consensus of $1.97 billion.

By category, high single-digit to low double-digit growth is expected in coolers & equipment, supported by broad-based growth across all C&E categories, and with specific strength in bags, soft coolers, and cargo. Coolers & Equipment growth is expected to be slightly stronger in the first half of the year compared to the second half.

Drinkware is projected to grow at a mid-single-digit pace this year, driven by robust international demand, ongoing innovation, and continued portfolio expansion.  Growth is expected to be slightly stronger in the second half of the year compared to the first.

From a channel perspective, wholesale is projected grow at a slightly faster rate than DTC in fiscal 2026. International growth is seen in the high teens to 20 percent range.

Gross margins of between 56 percent to 57 percent compared with adjusted gross margins of 57.4 percent of sales.  At the midpoint of the range, this is down 90 basis points year over year, reflecting the annualization of a full year of tariffs, partially offset by continued supply chain cost reductions and selective price increases.

Embedded in this guide is approximately 200 basis points of incremental impact from higher tariff costs in 2026, which will primarily impact us in the first half of the year. This headwind is on top of the 230-basis-point gross tariff impact in 2025, which was concentrated in the back half of last year. Year-over-year gross margins to be down approximately 300 basis points in the first half of the year, with the year-over-year decline greater in Q1. As Yeti laps the full impact of tariffs in 2026, second-half gross margins are expected to expand year over year as compared to 2025.

Image courtesy Yeti Holdings, Inc.