©Reuters. YETI Holdings (YETI) falls as revenue and guidance fall short of expectations
YETI Holdings (YETI) stock fell more than 15% on Thursday after the company reported a difficult fourth quarter, with both earnings per share (EPS) and revenue below Wall Street expectations.
The company's adjusted EPS was $0.90, beating the analyst consensus of $0.96 by $0.06. Revenue was also lower than expected, coming in at $519.8 million versus the expected $535.98 million.
Despite these setbacks, the company's revenue increased 16% to $519.8 million from $448 million in the year-ago period. Adjusted sales, excluding the impact of recall provisions, increased 6% to $517 million. Direct-to-consumer channel sales increased 11% to $344.9 million due to growth in drinkware. Wholesale channel sales increased significantly to $174.9 million, an increase of 26%. In particular, the company's drinkware sales increased by 12%, and annual sales for this category exceeded $1 billion.
Matt Reintjes, YETI's president and CEO, acknowledged mixed results, saying, “We saw strong performance in many key areas of our business in the fourth quarter…However,… “Fourth quarter results were mainly below expectations.'' This is the result of more cautious and inconsistent spending on big-ticket items in the cooler and equipment categories. ”
After the announcement of its financial results, YETI's stock price experienced a steep decline of 15.8%. This sharp decline indicates investors' disappointment with the company's performance, especially related to revenue and revenue underachievement.
YETI expects adjusted sales to increase 7% to 9% for fiscal 2024. The company also reported adjusted operating income as a percentage of adjusted sales of approximately 16.0% and adjusted net income per diluted share of $2.45 to $2.50, reflecting an increase of 9% to 11%. I predict that it will. However, this midpoint of his EPS guidance range of $2.475 does not compare to the analyst consensus of the data provided.
YETI's fourth quarter saw a notable increase in gross profit of $315.2 million (60.6% of sales), an 89% increase compared to $167 million (37.3% of sales) in the prior-year quarter. did. Adjusted gross profit increased to $311.1 million (60.2% of adjusted sales) from $264 million (54.3% of adjusted sales) in the fourth quarter of 2022. The company attributed the improvement to lower import freight costs, lower product costs, and an increased share of sales in high-margin direct-to-consumer channels.
In response to this report, Citi analysts, who have a “buy” investment rating on the company and a $50 price target, said the company's fourth quarter 2023 results were below expectations, and the company's 2024 guidance was below expectations. said. Analysts noted that adjusted gross margins improved, but said operating margins were also worse than expected.
