YETI

• Brand Building

  • The Q2 "Four Letters" national brand campaign, run across premium linear television, digital, social, and local outdoor/community activations, delivered strong reach to new audiences and reinforced brand relevance. Management noted the campaign functions as a scalable long-term platform rather than a one-time initiative, with early metrics showing strong engagement and broad audience diversification.
  • Multi-year investments in brand credibility and scale are compounding, as Yeti expands into more daily consumer use cases across outdoor, home, work, and gifting, increasing long-term brand value.

• Product Innovation & Platform Expansion

  • Yeti continues to expand beyond its legacy hard cooler and drinkware categories into scalable new platforms including soft coolers, bags, cases/storage, and outdoor living products, expanding the addressable market and reducing dependence on single product cycles. Recent successful launches include the Camino Zip bag, Rodeo 15/8 small hard coolers, and the Govox cases line.
  • A 5-location global design and development network has shortened innovation cycles and expanded the product pipeline, enabling faster prototyping and time-to-market for new products. Digital capabilities including the AI-powered Ranger shopping assistant and the new Artboard customization tool on Yeti.com are improving conversion and consumer personalization.
  • Ongoing drinkware portfolio diversification has more than offset a 600 basis point full-year 2026 U.S. headwind from three cycling trend-driven SKUs, delivering overall category growth; the headwind is expected to fully lap by the end of 2026, resetting the base for 2027.

• Omnichannel & International Strategy

  • The omnichannel model continues to deliver balanced resilient growth, with healthy channel inventory declining year-over-year in Q2 reflecting demand-driven inventory discipline.
  • International is a long-term growth opportunity, with Yeti following a disciplined market-by-market expansion strategy. By end of 2026, Yeti will operate directly in 11 global markets, up from 4 in 2025. Europe delivered broad-based growth across categories, Japan (in its first full year as a direct business) saw strong early consumer demand, and Australia/New Zealand delivered growth despite challenging macro conditions.

• Capital Allocation

  • Yeti returned $130 million to shareholders via share repurchases in Q2 2026, bringing total repurchases since 2024 to over $600 million, consistent with management's commitment to returning free cash flow to shareholders.

• Full-year 2026 total sales growth guidance is maintained at 7% to 8%, with relatively consistent growth phasing expected through the second half of the year. By segment: high single-digit to low double-digit growth for coolers and equipment; mid-single-digit growth for drinkware; high single-digit to low double-digit growth for wholesale; mid-single-digit growth for D2C; low to mid-single-digit growth for the U.S.; and high teens to 20% growth for international, all unchanged from prior guidance.
• Full-year adjusted gross margin guidance is raised to 57.5% to 58%, an increase of 100 basis points from prior guidance, reflecting year-to-date operational performance and IEPA tariff refunds, partially offset by ongoing inflationary pressures. Guidance assumes current tariff rates will return to ~20% starting in September 2026.
• Full-year operating expense (OPEX) growth guidance is revised to 6% to 8%, up from the prior 4% to 7% range, reflecting higher inflationary pressures in distribution, fulfillment, and other costs, plus continued investments in growth initiatives including international expansion. OPEX growth is expected to moderate in the second half due to the Q2 timing shift of the annual brand campaign (moved from Q4 2025 to Q2 2026).
• Full-year 2026 adjusted operating income margin guidance is raised to 14.9%, an increase of 30 basis points from prior guidance. Adjusted operating income growth guidance is raised to 10% to 12%, up from 8% to 10% prior. Operating margins are expected to increase ~280 basis points year-over-year in the second half, with a slightly larger increase in Q4.
• Full-year adjusted diluted EPS guidance is raised to $2.94 to $3.00, representing 19% to 21% year-over-year growth, up from prior guidance of $2.83 to $2.89 (14% to 17% growth). The increase reflects strong year-to-date performance and a $0.08 benefit from IEPA tariff refunds, partially offset by higher inflationary pressures.
• Capital expenditure guidance is maintained at $60 million to $70 million, and full-year free cash flow guidance is maintained at $200 million to $225 million.
• Diluted shares outstanding guidance is revised down to 75.4 million from 76.6 million prior, reflecting 2026 year-to-date share repurchases.

By Product Category:

• Coolers and Equipment: Revenue grew 16% year-over-year to $232 million, contributing 47.9% of total Q2 revenue. Growth was driven by strong demand for innovative products including day-trip insulated bags, Camino product lines, small personal-sized hard coolers, and the Govox cases and storage family.
• Drinkware: Revenue grew 2% year-over-year to $241 million, contributing 49.8% of total Q2 revenue. U.S. drinkware sales were flat against 600 basis points of headwind from three trend-driven SKUs, but underlying consumer demand for Yeti drinkware grew mid-single digits in the U.S. International drinkware growth drove overall category expansion supported by new product innovation.

By Channel:

• Wholesale: Revenue grew 10% year-over-year to $218 million, contributing 45% of total Q2 revenue. Robust sell-through and healthy channel inventory position the business well for the back half of 2026.
• Direct-to-Consumer (D2C): Revenue grew 7% year-over-year to $266 million, contributing 55% of total Q2 revenue. Strong demand was seen across marketplaces, e-commerce, and Yeti retail stores, and corporate sales improved meaningfully from Q1 trends.

By Region:

• United States: Revenue grew 6% year-over-year to $391 million, contributing 80.8% of total Q2 revenue. Growth was led by coolers and equipment, with robust demand across wholesale, marketplaces, and Yeti retail stores.
• International: Revenue grew 19% year-over-year to $93 million, contributing 19.2% of total Q2 revenue. Strong growth was delivered in Europe, Australia/New Zealand, and Japan; Canadian sales fell short of expectations due to cautious wholesale inventory purchasing despite healthy underlying consumer demand.

• Ongoing macroeconomic uncertainty and uneven consumer demand, with consumers displaying continued caution and value-seeking behavior, particularly in international markets facing constrained discretionary spending.
• Persistent inflationary pressures across supply chain inputs, including oil, raw materials (stainless steel, magnets, resin derivatives), and inbound transportation and distribution costs, which have worsened through Q2 2026.
• Uncertainty around future tariff policy, with ongoing trade investigations creating potential for higher tariffs; management built a conservative assumption of a return to 20% tariff rates starting September 2026 into guidance to account for this uncertainty.
• Shipping delays across certain Asia trade lanes create ongoing supply chain volatility.
• Wholesale partners in some markets (including Canada) remain cautious about inventory purchasing, even when underlying consumer sell-through is healthy, leading to softer-than-expected sell-in revenue.

Q: Brooke Roach (Goldman Sachs) asked management to frame underlying U.S. consumer demand through early back-to-school, and confirm if double-digit near-to-medium term growth remains achievable ahead of the September Investor Day. / A: Scott Bomar noted U.S. consumer demand exceeded reported sales in the first half of 2026, with positive trends across all channels and innovation driving strong results. He said management is confident in underlying trends but cautious on the back half given ongoing market uncertainty. Matt Reintjes added that Yeti builds the business for the long term rather than quarter-to-quarter results, and the company remains bullish on its long-term growth opportunity, with more growth opportunities ahead than behind it as it enters its 21st year. More details will be shared at Investor Day.

Q: Randy Koenig (Jefferies) asked for clarification on the drinkware headwind: whether cycling the three pressured SKUs by the end of 2026 will allow U.S. drinkware growth to re-accelerate in 2027, and asked how supply chain and innovation speed has improved in recent years. / A: Matt Reintjes explained that the 600 basis point full-year headwind comes from a narrow set of trend-driven SKUs that have now cycled out of favor. Yeti's multi-year strategy to diversify its drinkware portfolio has more than offset this drag, delivering overall growth despite the headwind. Cycling these SKUs will reset the business base in 2007, allowing the strength of the broader portfolio to be fully visible, with significant additional global expansion opportunity. He added that supply chain diversification has created more operational nimbleness, with improved lead times and flexibility, and the expanded global innovation network has cut cycle time; more details on this progress will be shared at the upcoming Investor Day. Scott Bomar added that Yeti's current inventory position is the healthiest it has been in years, prepared to meet back half demand.

Q: Peter Benedict (Baird) asked how management is approaching the 20% tariff assumption starting September 2026, and asked to break down the largest current inflationary pressures and mitigation efforts. / A: Scott Bomar responded that management has no special insider insight into future tariff policy changes, and the 20% assumption is a conservative approach given ongoing active trade investigations. For inflation, he explained that the largest pressures are on raw material costs (stainless steel, magnets, oil-based resins) and inbound transportation costs, and these pressures have worsened in Q2. Even with the $8 million one-time benefit from IEPA tariff refunds, most of that gain was offset by higher inflation, but the team still delivered year-over-year gross margin expansion via operational and pricing productivity. Matt Reintjes added that Yeti runs ongoing structural enterprise productivity programs to offset these input cost pressures.

Q: Olivia Witte (William Blair) asked how Yeti plans to sustain stable international growth going forward, what early results look like in Japan, and if the one-time tariff refund increases management's appetite for M&A. / A: Scott Bomar noted that quarter-to-quarter international volatility is normal due to timing factors, but underlying demand signals remain strong across all markets, with Japan delivering strong early traction from its new e-commerce platform and in-market activations. Growth in Asia is expected to be a multi-year build rather than an immediate short-term pop, and Yeti remains on track to hit its full-year 2026 international growth target. Matt Reintjes said that the tariff refund does not change Yeti's M&A strategy: the company will still pursue selective acquisitions of capabilities, talent, or products that support its long-term growth algorithm. Scott Bomar added that core capital allocation priorities (reinvest in growth, selective M&A, return excess capital to shareholders via repurchases) remain unchanged.