Matt Reintjes, President and Chief Executive Officer, commented, “YETI continued to execute at a high level in the second quarter, driven by brand strength, consideration and purchase in a dynamic demand environment. We continue to see attractive trends in the market with growing consumer demand for hydration solutions from coolers to drinkware, broadening colorways and an increasing focus on durable, reusable product. Our innovation continues to successfully address these trends, and we are excited about the pipeline of product we have in development across our product families. In drinkware, we are seeing positive results from the expansion of our bottle portfolio, our straw lid tumblers, the growing range of our Yonder water bottles, and the successful launch of our beverage bucket. In hard coolers, we saw strong demand for our wheeled cooler offerings. On the soft cooler front, we remain firmly on-track to not only bring our full lineup of soft coolers and dry gear bags back to the market, but also expand some of these offerings to new sizes as we move into the fourth quarter.”
Mr. Reintjes continued, “As we look at our second quarter performance, adjusted sales growth was above our expectations. Importantly, our gross margin performance continues to strengthen as we are now seeing greater benefit from lower container costs. We continue to thoughtfully invest in the business to drive growth and brand expansion, while maintaining a healthy level of profitability. Finally, we have further strengthened our balance sheet with a growing cash balance and an expanded credit facility, providing increased flexibility across our capital allocation priorities.”
Second Quarter 2023 Results
Sales decreased 4% to $402.6 million, compared to $420.0 million during the same period last year. Sales were unfavorably impacted by $24.5 million due to a recall reserve adjustment. See “Product Recall Updates” below for additional information on the impact of the recalls referenced throughout this press release.
Adjusted sales, which exclude the unfavorable impact of the recall reserve adjustment, increased 2% to $427.1 million.
Sales and adjusted sales for the second quarter of 2023 include $12.5 million of sales related to gift card redemptions in connection with recall remedies. Our 2023 results have also been materially adversely impacted by the stop sale of the soft coolers included in the recalls initiated during the first quarter of 2023.
Gross profit decreased 2% to $214.8 million, or 53.4% of sales, compared to $219.1 million, or 52.2% of sales, in the second quarter of 2022. Gross profit included a $19.4 million, or 150 basis points, unfavorable impact related to the recall reserve adjustment. Gross profit was positively impacted by lower inbound freight and lower product costs, partially offset by other costs, including higher customization costs and the unfavorable impact of foreign currency exchange rates.
Operating income decreased 26% to $50.3 million, or 12.5% of sales, compared to $68.3 million, or 16.3% of sales during the prior year quarter, and includes an $8.7 million unfavorable impact primarily from the recall reserve adjustment.
Net income, which includes the unfavorable impact from the recall reserve adjustment, decreased 18% to $38.1 million, or 9.5% of sales, compared to $46.3 million, or 11.0% of sales in the prior year quarter; Net income per diluted share decreased 17% to $0.44, compared to $0.53 in the prior year quarter.
details at: https://investors.yeti.com/news/news-details/2023/YETI-Reports-Second-Quarter-2023-Results/default.aspx