Matt Reintjes, President and Chief Executive Officer, commented, “Our third quarter results demonstrate the continued and consistent execution of the YETI growth playbook, driving strong brand and product interest, while setting up the business for long-term, sustainable growth. Sales in the quarter were in line with our prior outlook, as a diverse range of new product offerings drove strong consumer demand across our major sales channels. Gross margin performance remained exceptional and above expectations, led by strong partnerships with our suppliers on product cost and the ongoing optimization of our transportation and logistics expenses. These gains continue to support growth focused investments across our business, while still driving upside to our bottom line.”
Mr. Reintjes continued, “In addition to disciplined execution during the third quarter, we also successfully launched our expanded line of Hopper M Series soft coolers back to the market earlier in the fourth quarter. We are well positioned to build upon our leadership position in the soft cooler category as these products are more fully distributed across our channels into next year. In addition, we have extended a key customization capability across our global business with the debut of our first Ecommerce customization options outside of the U.S. Our consistent ability to drive innovation, combined with our unique omni-channel approach to reaching consumers and our continued brand investments, builds a strong and scalable platform for future growth.”
Third Quarter 2023 Results
Sales were flat at $433.6 million compared to the same period last year. Sales and adjusted sales for the third quarter of 2023 include $6.3 million of sales related to gift card redemptions in connection with recall remedies. Our 2023 results have been materially adversely impacted by the stop sale of the soft coolers included in the recalls initiated during the first quarter of 2023.
Direct-to-consumer (“DTC”) channel sales increased 14% to $259.5 million, compared to $227.4 million in the prior year quarter, due to growth in both Drinkware and Coolers & Equipment.
Wholesale channel sales decreased 16% to $174.1 million, compared to $206.2 million in the same period last year. This decrease was due to a decline in both Coolers & Equipment and Drinkware.
Drinkware sales increased 6% to $253.3 million, compared to $239.0 million in the prior year quarter, led by strong demand for Rambler® straw lid mugs, expanded offerings in Rambler® and Yonder® bottles, our new beverage bucket, and new seasonal colorways.
Coolers & Equipment sales decreased 8% to $171.5 million, compared to $185.7 million in the same period last year, primarily due to the stop sale of the soft coolers affected by the recalls. Despite strong overall consumer demand, hard coolers declined year-over-year primarily due to the success in rebuilding channel inventory during the same period last year. These impacts were partially offset by strong performance in our existing Hopper® Flip soft cooler line as well as cargo.
Gross profit increased 13% to $251.3 million, or 58.0% of sales, compared to $222.4 million, or 51.3% of sales, in the third quarter of 2022. Gross profit included a $0.8 million, or 20 basis points, favorable impact related to lower than anticipated recall-related costs. The increase in gross margin was primarily due to lower inbound freight costs and lower product costs.
Adjusted gross profit, which excludes the favorable impact related to lower recall costs, increased $28.0 million to $250.4 million, or 57.8% of adjusted sales, compared to $222.4 million, or 51.3% of adjusted sales, in the third quarter of 2022.
Operating income decreased 10% to $61.9 million, or 14.3% of sales, compared to $68.5 million, or 15.8% of sales during the prior year quarter.
Adjusted operating income decreased 3% to $71.4 million, or 16.5% of adjusted sales, compared to $73.3 million, or 16.9% of adjusted sales during the same
Net income decreased 6% to $42.7 million, or 9.8% of sales, compared to $45.5 million, or 10.5% of sales in the prior year quarter; Net income per diluted share decreased 6% to $0.49, compared to $0.52 in the prior year quarter.
details at: https://investors.yeti.com/news/news-details/2023/YETI-Reports-Third-Quarter-2023-Results/default.aspx