YETI’s (NYSE:YETI) Q1: Beats On Revenue But Stock Drops

YETI Cover Image — YETI’s (NYSE:YETI) Q1: Beats On Revenue But Stock Drops

Radek Strnad

Thu, May 8, 2025, 4:17 AM 5 min read

Revenue: $351.1 million vs analyst estimates of $345.8 million (2.9% year-on-year growth, 1.5% beat)
Adjusted EPS: $0.31 vs analyst estimates of $0.27 (15.2% beat)
Adjusted EBITDA: $44.97 million vs analyst estimates of $42 million (12.8% margin, 7.1% beat)
Management lowered its full-year Adjusted EPS guidance to $1.99 at the midpoint, a 32% decrease
Operating Margin: 6.2%, down from 7.6% in the same quarter last year
Free Cash Flow was -$89.2 million compared to -$114.3 million in the same quarter last year
Market Capitalization: $2.31 billion

Matt Reintjes, President and Chief Executive Officer, commented, “A strong start to 2025 showcased our growing global brand and broadening product portfolio alongside the operational execution that has been a hallmark of YETI. We exited the first quarter on our full year plan before the significant tariff disruption announced in April. As we now look at the changing macro and consumer environment, we remain confident that our durable balance sheet and strong gross and operating margins will allow us to continue to drive innovation, supply chain transformation and global expansion during this time.”

Company Overview

Founded by two brothers from Texas, YETI (NYSE:YETI) specializes in durable outdoor goods including coolers, drinkware, and other gear tailored to adventure enthusiasts.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, YETI grew its sales at a 14.5% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. YETI’s recent performance shows its demand has slowed as its annualized revenue growth of 7.1% over the last two years was below its five-year trend.

We can dig further into the company’s revenue dynamics by analyzing its most important segments, Retail and Wholesale, which are 55.9% and 44.1% of revenue. Over the last two years, YETI’s Retail revenue (direct sales to customers) averaged 4.5% year-on-year growth while its Wholesale revenue (sales to retailers) was flat.

This quarter, YETI reported modest year-on-year revenue growth of 2.9% but beat Wall Street’s estimates by 1.5%.

Looking ahead, sell-side analysts expect revenue to grow 6.7% over the next 12 months, similar to its two-year rate. This projection is underwhelming and suggests its newer products and services will not accelerate its top-line performance yet.

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Operating Margin

YETI’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 13.4% over the last two years. This profitability was solid for a consumer discretionary business and shows it’s an efficient company that manages its expenses well.

In Q1, YETI generated an operating profit margin of 6.2%, down 1.4 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

YETI’s EPS grew at a remarkable 19.2% compounded annual growth rate over the last five years, higher than its 14.5% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t expand.

In Q1, YETI reported EPS at $0.31, down from $0.34 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects YETI’s full-year EPS of $2.71 to stay about the same.

Key Takeaways from YETI’s Q1 Results

We enjoyed seeing YETI beat analysts’ EPS expectations this quarter. We were also happy its EBITDA outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed significantly. Overall, this quarter could have been better. The stock traded down 6.7% to $26.09 immediately following the results.

YETI may have had a tough quarter, but does that actually create an opportunity to invest right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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