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Yeti says sales have benefited from outdoor activities during COVID-19.
@YetiCoolers
Yeti Inc. YETI, +16.51% shares soared 16.5% in Thursday trading after the cooler and outdoor drinkware company reported earnings that beat expectations and said sales exceeded $1 billion over a one-year period.
Yeti’s third-quarter net income totaled $51.4 million, or 58 cents per share, up from $21.3 million, or 25 cents per share, last year. Adjusted EPS of 61 cents beat the FactSet consensus for 37 cents per share.
Sales of $294.6 million were up from $229.1 million last year and also ahead of the FactSet consensus for $262.0 million. Direct-to-consumer sales were up 53% to $363.1 million.
The company attributed the sales growth to a surge in demand for outdoor recreation and leisure products and e-commerce growth during the pandemic.
Read: COVID-19 drives sales of Newell Brands items like contactless hand sanitizers and iced coffee makers
“Yeti crossed $1 billion in net sales for the trailing 12 months,” said Matt Reintjes, Yeti’s chief executive officer, on the earnings call, according to a FactSet transcript.
A Yeti hard cooler can cost as much as $1,300, according to the company’s e-commerce site.
Reintjes also attributed Yeti’s better-than-expected quarterly results to outreach to its customers, such as the eight YouTube films that were released during the quarter in lieu of live events that were canceled due to the pandemic, and the drive-in film tour that launched in September.
The company also added to its product line, including can insulators designed with hard seltzer in mind.
Yeti issued a voluntary recall of one of its travel mugs due to a safety issue. However, the company said it sold “fewer than 15,000” over nine days that it was available on its direct sales channels. Yeti produced 242,000 of the product.
“This delay, while disappointing in the near term, is fully contemplated in our outlook and will continue to make us better,” Reintjes said.
Yeti forecasts a fourth-quarter sales rise of 15% to 16%, EPS between 55 cents and 58 cents and adjusted EPS between 57 cents and 60 cents.
The FactSet consensus is for fourth-quarter sales of $340.6 million, suggesting a 14.4% rise, and EPS of 56 cents.
” We continue to see significant upside in the long-term top-line potential and upside to consensus sales, gross margin and earnings expectations on a multi-year basis,” wrote Cowen analysts led by John Kernan.
“The innovation and product pipeline for Spring 2021 received positive reception and Yeti’s ongoing investments in customer acquisition, digital, technology and supply chain should support further expansion of the brand globally. “
Cowen rates Yeti stock outperform with a $72 price target, up from $63.
“[W]e expect this demand momentum to continue, while Yeti should also benefit from inventory replenishment well into 2021, thus remaining an attractive growth story for the foreseeable future,” wrote Raymond James analysts led by Joseph Altobello.
Raymond James rates Yeti shares outperform and also raised its price target, up to $65 from $56.
Yeti stock has skyrocketed 72.3% for the year to date while the S&P 500 index SPX, +1.94% is up 8.7% for the period.
