YETI (YETI) Q2 FY26 earnings call: guidance and Q&A

Can you elaborate on the U.S. growth outlook, especially with tougher comparisons, and what gives you confidence in sustained growth in the core U.S. market?

Management expressed satisfaction with strong consumer demand in the U.S. during the first half, which exceeded reported sales. They are confident in the underlying trends driven by innovation and improved corporate/international sales, but remain cautious in the back half outlook due to consumer uncertainty. The focus is on long-term growth beyond quarter-to-quarter fluctuations.

“We had steady consumer demand over the course of the first 2 quarters. In fact, in the United States, our consumer demand exceeded our reported sales. So all the trends are positive.”

asked by Brooke Roach · answered by Scott Bomar

Can you provide more detail on the Drinkware headwinds abating by year-end and whether the business is poised to reaccelerate into next year due to product breadth and geographic expansion?

Management confirmed that the acute drag from a narrow set of SKUs in Drinkware, which caused a 600 basis point headwind, is expected to largely cycle through by year-end 2026. This will re-baseline the business, allowing YETI to showcase its innovation and strength in the broadening Drinkware category, both domestically and globally, setting up for future growth.

“What we wanted to call out today is there's an acute drag and a headwind to that. We have more than overcome that and then driven growth on top of it. And then we called out that by the end of this year, we'll have largely cycled through those specific narrow set of SKUs, which should rebaseline the business and give us an opportunity to really showcase the innovation, the strength and the relevance of the brand that we've built into that broadening Drinkware category.”

asked by Randal Konik · answered by Matthew Reintjes

How has YETI improved its speed in producing and distributing products, and what are you doing to enhance the supply chain to meet increasing demand and address sellouts?

Management noted that consumer demand exceeding reported sales in the U.S. is a positive dynamic. They highlighted investments in supply chain flexibility, increased capacity, and shortened lead times. They also mentioned significant improvements in innovation cycle time and the maturation of their commercialization go-to-market strategy, which will be detailed at the upcoming Investor Day. Inventory levels are currently healthy, preparing them for back-half demand.

“What Scott said was that consumer demand exceeded our reported in the U.S., which is a dynamic we really like. I think the other thing that we have is as we have continued to cycle through the buildup of our global supply chain and diversification of our supply chain is it's created more nimbleness.”

asked by Randal Konik · answered by Matthew Reintjes

Is the assumption of tariff rates returning to 20% in September based on specific insight, or is it a conservative planning measure?

Management stated that the tariff discussion changes regularly and they have no particular insight into whether tariffs will or won't happen. The assumption is a conservative planning measure given ongoing investigations.

“No, we don't have any particular insight into this other than the fact there are still remaining investigations that are underway and with the intent to potentially introduce more tariffs. We have no particular insight on whether that will or won't happen, but we're just being conservative in our outlook.”

asked by Peter Benedict · answered by Scott Bomar

Can you elaborate on the inflationary pressures, their impact, and what YETI is doing to offset them?

Management noted that inflationary pressures worsened in Q2, impacting input costs for products (stainless steel, magnets, resins) and OpEx (fuel, transportation). FX also weighs on COGS. They are actively working to mitigate these through productivity initiatives, pricing discipline, and supply chain optimization. The Q2 gross margin performance, despite these pressures, reflects the team's efforts.

“We have a variety of different pressures that are weighing on input costs into our cost of goods, inflationary pressures and things like stainless steel, magnets, oil derivative products like resins that go directly into the production of our products. Those are direct. FX weighs on our cost of goods as well. And then in OpEx, it's really about fuel and transportation.”

asked by Peter Benedict · answered by Scott Bomar

How do you view international growth stability, inventory levels, and the expected contribution from new Asian markets like Japan over the next several years?

Management sees strong demand signals globally, with Europe driving significant growth and Asia having significant long-term aspirations. Japan, in its first full year as a direct business, has shown terrific traction with strong e-commerce performance and over 500 wholesale doors. They expect a multi-year build for Asia, not short-term explosion, but are happy with early results and customer reaction.

“Asia is really interesting. It's one that we have significant growth aspirations over the long haul. We're very newly entered into the markets there. We've seen some terrific traction in Japan. Our e-commerce site is performing extremely well. We know that growth will take -- it will be a multiyear build. It's not something where we expect it to explode in the short term, but we are really happy with the results we're seeing there.”

asked by Olivia Witte · answered by Scott Bomar

What are the longer-term benefits of the 'FOUR Letters' brand campaign, particularly in metrics like e-commerce traffic or YETI Search, given no national branding is planned for the back half?

Management views 'FOUR Letters' as a platform, not just a campaign, with lasting benefits. They saw strong Q2 metrics in reach, audience diversification, and intersection with various moments. The internal creative team is breaking it down into smaller digital-focused bites for targeted audiences, which will continue through the year and likely beyond 2026. They remain opportunistic for future broad-based campaigns.

“We look at this as a platform that we can use and continue to bring back to life because we think it has more than just a campaign moment. And you're seeing that already and that we've taken this big Q2 campaign and our incredible internal creative team has broken it down into smaller digital-focused bites where we can target different audiences, different communities, different YETI passion points.”

asked by Peter Keith · answered by Matthew Reintjes

Given international growth of 14% year-to-date, what gives you confidence in accelerating to high teens to 20% for the full year?

Management stated they have the benefit of seeing demand signals and healthy traction in the market. While there's quarter-to-quarter noise, they see a positive trajectory driven by investments in teams and supply chain capabilities. They feel good about delivering the full-year growth expectations for the international business as a portfolio.

“We have the benefit of seeing the demand signals. Look, there's always going to be quarter-to-quarter noise, and we talked a little bit about that in Q1, some items that could have hit in the quarter that didn't. And so we see the trajectory of the business and see the healthy traction that we're getting in the market.”

asked by Joseph Altobello · answered by Scott Bomar