YETI Q4 2024 Earnings Analysis

Thanks Alex. And wow, what a year it's been for Yeti. Let's start with the headline numbers because they're pretty solid. For the full year 2024, Yeti delivered $1.84 billion in sales - that's 9% growth year-over-year. But what really caught my attention was the bottom line performance. Operating income jumped 18% to $309 million, and earnings per share grew 21% to $2.73.

It's really a three-pronged story, Alex. First, their Coolers & Equipment category absolutely crushed it with 17% growth in Q4 alone. That's four straight quarters of double-digit growth in that segment. Second, their international business is on fire - growing 30% for the full year and now representing 18% of total sales. And third, they're successfully diversifying beyond just coolers and drinkware.

The bags category really impressed me. They had what they called "fantastic" performance with their Crossroads packs, Camino totes, and various dry bags. Plus, they acquired Mystery Ranch, which gives them serious credibility in the premium bags and backpack space. CEO Reintjes mentioned they see a "massive global addressable market" in premium bags, packs, and luggage.

Exactly. What I found interesting was how disciplined their M&A approach seems. Reintjes emphasized they look for acquisitions that bring "ingredients or technologies or know-how to accelerate stuff that's already on our product roadmap." That's smart capital allocation, especially when you're sitting on $359 million in cash.

Now let's talk about some challenges, because it wasn't all smooth sailing. The U.S. drinkware market got pretty competitive in Q4. Reintjes mentioned "more promotional activity and heightened competition," particularly in drinkware. Their U.S. drinkware business was actually down slightly year-over-year in the quarter.

Let's dig into their 2025 guidance because there are some important nuances. They're expecting 5-7% sales growth for the full year, but the timing is back-half weighted. They expect low to mid-single digit growth in the first half, then high single to low double-digit growth in the second half.

Two main factors. First, their drinkware innovation pipeline is much more heavily weighted to the second half of 2025. McMullen attributed this partly to their supply chain diversification efforts - they're moving production out of China, and that's affecting the timing of new product launches. Second, they had easier year-over-year comparisons in the back half versus the first half.

That's incredibly relevant given the current tariff environment. When analysts asked about the 10% China tariff that went into effect in early February, McMullen said it would have "less than a $10 million impact" for the year - that's pretty manageable for a company doing nearly $2 billion in sales.

Europe is particularly exciting. They grew remarkably in Q4 and now have over 1,000 doors in the region. Australia continued its "exceptional" performance, and even their mature Canadian market showed steady growth. When you look at a brand that's only at 18% international sales, there's clearly a lot of runway ahead.

And they're leveraging that loyalty across multiple touchpoints. I loved hearing about their partnership with Oracle Red Bull Racing, where they're now the official bags and luggage partner in addition to their existing drinkware and cooler partnerships. Those kinds of premium brand associations really reinforce their positioning.

What I find compelling is how they're balancing growth investments with shareholder returns. They're investing in supply chain diversification, international expansion, and innovation acceleration, while also returning cash through buybacks. It's a disciplined approach for a company in growth mode.

The main headwind is foreign exchange. They're expecting about 100 basis points of sales headwind and roughly 350 basis points of operating income headwind from FX in 2025. The strong dollar is working against their international growth story in the near term. Also, the U.S. drinkware competition isn't going away, so they'll need to execute well on their diversification strategy.

Absolutely. And with their planned investor day later this year, we should get more details on their long-term strategy. For a company trading at reasonable multiples with strong brand loyalty and significant international white space, Yeti seems well-positioned despite the near-term headwinds.

Before we sign off, remember that everything discussed today is AI-generated analysis for educational purposes. Past performance doesn't guarantee future results. Please do your own due diligence.