Q2 2024 YETI Holdings Inc Earnings Call

August 8, 2024

Operator: Good morning, ladies and gentlemen, and welcome to the YETI Holdings 2Q24 earnings conference call. At this time, all lines are in listen-only mode.

Good morning, ladies and gentlemen, and welcome to the Yeti Holdings Q4 earnings Conference call.

Operator: Good morning, ladies and gentlemen, and welcome to the YETI Holdings 2Q24 Earnings Conference Calls. At this time, all lines are in listen-only mode.

Operator: Great, thanks.

This time all lines are in listen only mode.

Operator: Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 8, 2024. I would now like to turn the conference over to Mr. Tom Shaw, Vice President of Investor Relations. Please go ahead.

Speaker Change: All living depressive base shouldn't we will conduct a question and answer session.

Speaker Change: If at any time during this call you're going to get the assistance. Please press star zero for the operator.

Speaker Change: This call is being recorded a Thursday August eight plenty 24, I would now like the conference over to Mr. Tom Shaw Vice President of Investor Relations. Please go ahead.

Operator: Great, thanks so much.

Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 8, 2024. I would now like to turn the conference over to Mr. Tom Shaw, Vice President of Investor Relations. Please go ahead.

Tom Shaw: Good morning, and thanks for joining us to discuss Yeti Holdings' second quarter fiscal 'twenty 'twenty four result.

Tom Shaw: Good morning, and thanks for joining us to discuss YETI Holdings' second quarter fiscal 2024 results. Leading the call today would be Matt Reintjes, President and CEO, and Mike McMullen, CFO. Following up a couple of remarks, we'll open the call for your questions. Before we begin, we'd like to remind you that some of the statements that we make today on this call may be considered forward-looking, and such forward-looking statements are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements.

Alex Perry: The next question will be coming from Alex Perry.

Speaker Change: Leading the call today would be met righteous, president and CEO and Mike Mcfarlane CFO.

Speaker Change: During our prepared remarks, we'll open the call for your questions.

Speaker Change: Before we begin I'd like to remind you that some of the statements that we make today on this call maybe considered forward looking and such forward looking statements are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements.

Tom Shaw: For more information, please refer to the risk factors detailed in our most recently filed Form 10-K. Reconciliations of these non-GATT measures to their most directly comparable GATT measures are included in the press release or in the presentation posted this morning to our investor relations section of our website at yeti.com.

Alex Perry: Hi, thanks for taking my questions here. Just on the NFL license for drinkware, how significant do you think this could be? Can you give us any case studies on when you rolled out other professional leagues in terms of the sales uplift that you saw, and just sort of remind us of the timing of the NFL license rollout thing?

Tom Shaw: Before we begin, we'd like to remind you that some of the statements that we make today on this call may be considered forward-looking, and such forward-looking statements are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. For more information, please refer to the risk factors detailed in our most recently filed Form 10-K. We undertake no obligation to revise or update any forward-looking statements made today as a result of new information, future events, or otherwise, except as required by law.

Speaker Change: For more information please refer to the risk factors detailed in our most recently filed Form 10-K.

Speaker Change: We undertake no obligation to revise or update any forward looking statements made today as a result of new information future events or otherwise except as required by law.

Tom Shaw: Unless otherwise stated, our financial measures discussed on this call will be on a non-GAAP basis. We use non-GAAP measures as we believe they more accurately represent the true operational performance and underlying results of our business. Reconciliations of these non-GATT measures to their most directly comparable GATT measures are included in the press release or in the presentation posted this morning on our investor relations section of our website at yeti.com. Now, I'd like to turn the call over to Matt. Thanks, Tom, and good morning.

Speaker Change: Unless otherwise stated our financial measures discussed on this call will be on a non-GAAP basis.

Speaker Change: We use non-GAAP measures as we believe they more accurately represent the true operational performance and underlying results of our business.

Speaker Change: Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in the press release or the presentation posted this morning to our Investor Relations section of our website at <unk> Dot com.

Speaker Change: And now I'd like to turn the call over to Matt.

Matt: Thanks, Tom and good morning.

Matthew Reintjes: YETI wrapped up a great first half of 2024, showcasing the strength of our brand, our products, and our global go-to-market. As we have highlighted in the past, the second quarter includes a number of key moments, including Mother's Day, Father's Day, and the return of summer, creating a perfect intersection for our brand and product.

Matt: Yeti wrapped a great first half of 2020 for showcasing the strength of our brand our products and our global go to market.

Matt: As we've highlighted in the past the second quarter includes a number of key moments, including mother's day father's day and the return of summer, creating a perfect intersection for our branded products.

Matthew Reintjes: Our innovation across our portfolio, in particular coolers, proved to be impactful, creating what we believe will be momentum going into the second half of the year and beyond. Complementing our focus on coolers, we continue to drive expansion in our Drinkware portfolio. These efforts are seen in our wholesale sell-through, our social engagement and sentiment, and our global performance. In the quarter, we drove 9% sales growth, above expectations, and led by coolers and equipment and international.

Matt Reintjes: Our innovation across our portfolio, in particular coolers, proved to be impactful, creating what we believe will be momentum going into the second half of the year and beyond. Complementing our focus on coolers, we continue to drive expansion in our Drinkware portfolio. I would like to thank our team for managing and neutralizing the ongoing risks in the dynamic supply chain environment. We anticipate that the end result of these efforts and the momentum we are seeing puts us on pace to deliver record high gross margins for the full year.

Matt: Our innovation across our portfolio in particular coolers proved to be impactful, creating what we believe will be momentum going into the second half of the year and beyond.

Matt: Complementing our focus on coolers, we continue to drive expansion in our drink our portfolio.

Matt: These efforts are seen in our wholesale sell through our social engagement and sentiment and our global performance.

Matt: In the quarter, we drove 9% sales growth above expectations and led by coolers equipment and international.

Matthew Reintjes: Emphasizing this top-line performance and showing the continued presence and strength of the brand, we delivered excellent gross margin expansion on top of significant improvement last year. I would like to thank our team for managing and neutralizing the ongoing risks in the dynamic supply chain environment. We anticipate that the end result of these efforts and the momentum we are seeing puts us on pace to deliver record high gross margins for the full year.

Matt: Besides the top line performance and showing the continued residents and strength of the brand we delivered excellent gross margin expansion on top of significant improvement last year.

Matt: I would like to thank our team for managing a neutralizing the ongoing risks and the dynamic supply chain environment.

Matt: We anticipate that the end result of these efforts and the momentum we are seeing puts us on pace to deliver record high gross margins for the full year.

Matt: Our top line and gross margin execution continued to support our long term growth and strategic investments, while also delivering upside to the bottom line.

Matthew Reintjes: Our top line and gross margin execution continues to support our long-term growth and strategic investments, while also delivering upside to the bottom line. As we move to the second half of the year, we have ample reason to be encouraged to cross product categories, channels, and geographies, while being mindful of the macroeconomic and geopolitical complexities that we expect to remain present through the year.

Matt: As we move through the second half of the year, we have ample reason to be encouraged across product categories channels and geographies.

Matt: While being mindful of the macroeconomic and geopolitical complexities that we expect to remain present through the year.

Matthew Reintjes: Our focus remains on controlling what we can and being nimble and prepared to respond effectively in a face of uncertainty. For YETI, that always begins with our approach to customer engagement and delivering uncompromising products. It also means a commitment to investment so we can efficiently and globally scale our business. This investment includes the addition of key roles in our leadership team to manage Asia and Europe. additions to our global logistics footprint and the build-out of capabilities across our regions to support our expanding product offering. Additionally, we continue to drive the strategic diversification of our global supply chain. Today, approximately 40% of our total cost of goods is tied to products sourced from China, primarily related to our Drinkware portfolio.

Matt Reintjes: Our focus remains on controlling what we can and being nimble and prepared to respond effectively in a face of uncertainty. For YETI, that always begins with our approach to customer engagement and delivering uncompromising products. It also means a commitment to investment so we can efficiently and globally scale our business, including additions to our global logistics footprint and the build-out of capabilities across our regions to support our expanding product offering. Additionally, we continue to drive the strategic diversification of our global supply.

Matt: Our focus remains on controlling what we can and being nimble and prepared to respond effectively in the face of uncertainty.

Matt: For Yeti that always begins with our approach to customer engagement and delivering uncompromising product.

Matt: It also means the commitment to investments so we can efficiently globally scale our business.

Matt: This investment includes the addition of key roles in our leadership team to manage Asia and Europe.

Matt: Additions to our global logistics footprint and the build out of capabilities across our regions to support our expanding product offering.

Matt: Additionally, we continue to drive the strategic diversification of our global supply today.

Matt Reintjes: Today, approximately 40% of our total cost of goods is tied to products sourced from China, primarily related to our Drinkware portfolio. At that time, we also indicated we had started to optimize our drinkware supply base, including process improvements and automation efforts with our partners. As a result, we expect that by the end of this year, approximately 20% of our global drinkware production capacity will be located outside of China. As we look forward to other opportunities and initiatives, we believe we can extend this program further, providing greater global scale, diversification, and reach of our supply base.

Matt: Today, approximately 40% of our total cost of goods is tied to products sourced from China, primarily related to our drink bar portfolio.

Matthew Reintjes: As we have previously discussed, we began our major supply chain transformation journey in 2018, beginning with our soft goods. At that time, we also indicated we had started to optimize our drinkware supply base, including process improvements and automation efforts with our partners. As mentioned in early 2023, we successfully proved out our model and began our first production location for drinkware outside of China. We are pleased with the quality and performance of this initiative, and by year-end 2024, we expect to bring online a second non-Chinese location for drinkware. As a result, we expect that by the end of this year, approximately 20% of our global drinkware production capacity will be located outside of China.

Matt: As we have previously discussed we began our major supply chain transformation journey in 2018, beginning with our soft goods.

Matt: At that time, we also indicated we started to optimize our drink or supply base, including process improvements automation efforts with our partners.

Matt: As mentioned in early 2023.

Matt: We successfully proved out our model and began our first production location for drink wire outside of China.

Matt: We are pleased with the quality and performance of this initiative.

Matt: By year end 2024 expect to bring online a second non China location for drink water.

Matt: As a result, we expect that by the end of this year approximately 20% of our global drink water production capacity will be located outside of China.

Matthew Reintjes: As we look forward to other opportunities and initiatives, we believe we can extend this program further, providing greater global scale, diversification, and reach of our supply base. Additionally, we expect to have the flexibility to allocate capacity to specific end markets for cost optimization. By the end of 2025, we plan that roughly half of our drink or production capacity will reside outside of China and be available to support our global growth. Going forward, we anticipate opportunities to scale this diversification even further to meet the needs of the business. This has been and will continue to be a significant priority for YETI.

Matt: As we look forward to other opportunities and initiatives. We believe we can extend this program further providing greater global scale diversification and reach of our supply base.

Matt Reintjes: Additionally, we expect to have the flexibility to allocate capacity to specific end markets for cost optimization. By the end of 2025, we plan that roughly half of our drink or production capacity will reside outside of China and be available to support our global growth. This has been and will continue to be a significant priority for YETI.

Matt: Additionally, we expect to have the flexibility to allocate capacity to specific end markets for cost optimization.

Matt: By the end of 2025, we plan that roughly half of our drink water production capacity will reside outside of China and available to support our global growth.

Matt: Going forward, we anticipate opportunity to scale. This diversification, even further to meet the needs of the business.

Matt: It has been and will continue to be a significant priority for yeti.

Matthew Reintjes: Our work here is designed to give us maximum flexibility to address a range of future global tariff scenarios and cost dynamics. To be clear, as we expressed when we started these initiatives in 2018, we will focus on making the right long-term decisions to support our growing global business while being mindful of the geopolitical landscape. Moving on, to our strategic priorities.

Matt: Our work here is designed to give us maximum flexibility to address a range of future global tariff scenarios and cost dynamics.

Matt: To be clear as we expressed when we started these initiatives in 2018, we will focus on making the right long term decisions to support our growing global business, while being mindful of the geopolitical landscape.

Matt Reintjes: Moving to our strategic priorities, a constant focus for our brand is extending our reach and broadening our access to global consumers. Many of these efforts are rooted in the communities we support. We have methodically evolved this focus while staying true to who we are across a range of varied but often connected audiences. For instance, YETI has built a deep heritage in the Western lifestyle.

Matt Reintjes: Yeah, hi Alex. Thanks for the question.

Matt: Moving to our strategic priorities, our constant focus for our brand is extending our reach and broadening our access to global consumers.

Matthew Reintjes: A constant focus for our brand is extending our reach and broadening our access to global consumers. Many of these efforts are rooted in the communities we support. We have methodically evolved this focus while staying true to who we are across a range of varied but often connected audiences. For instance, YETI has built a deep heritage in the Western lifestyle.

Matt Reintjes: You know, we won't and kind of haven't gotten into quantifying passions, different needs, they love, they love the Cowboys, and they love the YETI brand. They love the Kansas City Chiefs, and they love the YETI brand. I think all those things are kind of why we like these types of relationships. You know, I would expect, like all of our partnerships, that it would contribute to the business and be a driver of performance.

Matt Reintjes: But the quantification is, it's really the stack up of all these things that gives us the range and the opportunity to address more consumers and more buying occasions. And back to my comment earlier, kind of be part of their lives. And that's why we like, ultimately like the NFL. Obviously, the NFL is the best.

Matt Reintjes: I mean, it's got a huge, huge following. It has a growing global following. They're now playing games, as you know, all over the world. So all those create opportunities for us that fit within our overall strategy of continuing to build this global brand.

Matt: Many of these efforts are rooted in the communities we support.

Matt: We are methodically evolve this focus while staying true to who we are across a range of very but often connected audiences.

Matthew Reintjes: A very natural extension of these pursuits is the global equestrian community, where we have thoughtfully built the foundation over the past few years. Many of these relationships start when we identify our product and use, which contributes to a natural relevance. In this case, our product was being used to address hydration, storage, organization, and thermal retention.

Matt Reintjes: A very natural extension of these pursuits is the global equestrian community, where we have thoughtfully built a foundation over the past few years. We then established the brand through partnerships with organizations such as U.S. Equestrian, supporting global competitions, and aligning with ambassadors. We've taken a similar approach in Gulf, highlighted by our recent partnership with the CADI network, including 25 CADIs across the PGA and LPGA tours, using our products on a global stage.

Matt: For instance that he has built a deep heritage and western lifestyle, a very natural extension of these pursuits as the global equestrian community, where we have thoughtfully built the foundation over the past few years.

Speaker Change: Many of these relationships start when we identify our product in us which contributes to a natural relevant.

Speaker Change: In this case product is being used to address hydration storage organization and thermal retention.

Matthew Reintjes: We then established the brand through partnerships with organizations such as U.S. Equestrian, supporting global competitions, and aligning with ambassadors. This is how we have built our 15 communities and is a key to how we establish sustainable relevance. We've taken a similar approach in Gulf, highlighted by our recent partnership with the CADI network, including 25 CADIs across the PGA and LPGA tours, using our products on a global stage. This has led to our products organically making their way into the hands of touring professionals, earning social mentions in the press, and driving broader interest across golf.

Matt: We then establish the brand through partnerships with organizations such as U S equestrian supporting global competition and aligning with ambassadors.

Speaker Change: This is how we have built our 15 communities and is a key to how we establish a sustainable relevance.

Speaker Change: We've taken a similar approach in golf highlighted by our recent partnership with the Kt network, including 25 counties across the PGA and LPGA tours.

Speaker Change: Using our products on a global stage.

Speaker Change: This has led to our products organically, making their way into the hands of touring professionals, earning social mentions and press and driving broader interest across Gulf.

Matthew Reintjes: These organic, connected approaches to community building drive high relevance with a range of new and existing customers, both at home and abroad. Our global focus extends to our ambassador network as well. In Europe, year-to-date, we have partnered with nine new ambassadors across the world in skiing, snowboarding, climbing, and culinary. Overall, international ambassadors now represent nearly 30% of our total and will continue to be a significant focus as we look to extend the brand to new regions over time. Speaking of ambassadors, we were excited to see three of ours compete in Paris at the Summer Olympics, including John John Florence and Katie Simmers in surfing and Alex Magus in sports climbing.

Speaker Change: Organic connected approaches to community building drive high relevance with a range of new and existing customers both at home and abroad.

Matt Reintjes: Our global focus extends to our ambassador network as well. In Europe, year-to-date, we have partnered with nine new ambassadors across the world of skiing, snowboarding, climbing, and culinary. Overall, international ambassadors now represent nearly 30% of our total and will continue to be a significant focus as we look to extend the brand to new regions over time. Under this agreement, fans will soon be able to purchase officially licensed YETI drinkware and coolers for all 32 NFL teams.

Speaker Change: Our global focus extends to our ambassador network as well.

Speaker Change: In Europe year to date, we have partnered with nine new ambassadors across the world the skiing snowboarding climbing and culinary overall.

Speaker Change: Overall international ambassadors now represent nearly 30% of our total.

Speaker Change: And we will continue to be a significant focus as we look to extend the brand to new regions over time.

Speaker Change: Speaking of ambassadors, we were excited to see three of ours compete in Paris at the Summer Olympics, including John John Florence, and <unk>, and surfing and Alex makers and sports climbing.

Matthew Reintjes: We are incredibly proud to partner with some of the best in what they do. REACH is further supported by our partnerships and licensing programs. We're excited to announce YETI's continued movement into sports through our newly signed licensing agreement with the NFL. Under this agreement, fans will soon be able to purchase officially licensed VNE drinkware and coolers for all 32 NFL teams.

Speaker Change: Incredibly proud to partner with some of the best in what they do.

Speaker Change: Our reach is further supported by our partnerships and licensing programs for.

Unknown Executive: Good morning, ladies and gentlemen, and welcome to the YETI Holdings 2Q24 earnings conference call, at this time, all lines are in listen only mode, following the presentation we will conduct a question and answer session. If at any time during this call, you're recording with assistance, please press our zero for the operator.

Matthew Reintjes: The NFL license has also been key to us establishing our first NFL team partnership with the Dallas Cowboys as the official cooler and drink wear of the team. Launching this season, we look forward to building out this program as we move into 2025 and beyond. These new deals build on a sports foundation that now includes three of the largest professional leagues in the U.S., in addition to a wide range of global partners.

Speaker Change: Excited to announce the Eddie's continued move into sports through our newly signed licensing agreement with the NFL.

Speaker Change: Under this agreement.

Speaker Change: <unk> will soon be able to purchase officially licensed via any drink wine coolers for all 32 NFL teams.

Speaker Change: The NFL license is ultimate key to us establishing our first NFL team partnership with the Dallas Cowboys as the official cooler and drink wear of the team.

Unknown Executive: This call is being recorded on Thursday, August 8, 2024.

Speaker Change: Launching this season, we look forward to building out this program as we move into 2025 and beyond.

Thomas Shaw: I would now like to turn the conference over to Mr. Tom Shaw, Vice President of Investor Relations. Please go ahead. Good morning, thanks for joining us to discuss YETI Holdings 2Q24 results. Please recall today would be Matt Reintjes, President and CEO and Mike McBullen, CFO. Following a prepared remarks look on the call for your questions. Before we begin, we'd like to remind you that some of the statements that we make today on this call may be considered for looking at such for-looking statements are subject to various risks and in certainties that could cause our actual results differently from these statements.

Matt Reintjes: These new deals build on a sports foundation that now includes three of the largest pro leagues in the U.S., in addition to a wide range of global partners. To extend awareness and consideration, we leverage our strong heritage in the category with a range of media placements across linear and streaming TV, online channels, and a focus on live sports, including the Family Cup playoffs and CrossFit games. Overall, despite some of the persistent narrative in the market around higher ticket spending, we saw our cooler category performance build throughout the quarter and ultimately exceed our expectations, which we believe will set us up well for the back half of the year.

Speaker Change: These new deals billed on a sports foundation that now includes three of the largest <unk> in the U S. In addition to a wide range of global partnerships.

Matthew Reintjes: Looking at innovation, we reinforce our leadership position in coolers this quarter as our full range of soft coolers is in market, and we deliver on the previously mentioned innovation in hard coolers. To extend awareness and consideration, we leverage our strong heritage in the category with a range of media placements across linear and streaming TV, online channels, and a focus on live sports, including the Family Cup playoffs and CrossFit Games. Integrating our product campaigns and brand audience.

Speaker Change: Looking at innovation, we reinforced our leadership position in coolers this quarter as our full range of soft coolers as end market and we delivered on the previously mentioned innovation hard coolers.

Speaker Change: To extend awareness and consideration we leveraged our strong heritage in the category with a range of media placements across linear and streaming television online channels.

Speaker Change: And a focus on live sports, including the Stanley Cup playoffs across it games integrating our product campaigns and brand audiences.

Thomas Shaw: For more information, please refer to the risk factors detailed and are most recently filed for the hint K. We are taking obligations for advice or update any forward-looking statements made today as a result of new information, future events, or otherwise, except as required by law. What's otherwise stated are financial measures discussed on this call will be on a non-gap basis. We use non-gap measures as we believe they more accurately represent the true operational performance in underlying results of our business.

Matthew Reintjes: In conjunction with these efforts, we've prioritized education around these products, reinforcing the why and the how our products have redefined the category. We delivered these messages while bringing innovation to the hard cooler category, first with the wheeled Roadie 32 and then the personal-sized Roadie 15 later in the quarter.

Speaker Change: In conjunction with these efforts, we prioritize education around these products reinforcing the why and how our products have redefined the category.

Speaker Change: We delivered these messages, while bringing innovation to the hard cooler category.

Thomas Shaw: Recommendations of these non-gap measures to their most directly comparable gap measures are included in the press release or in the presentation post of this morning to our best relation section of our website at yETI.com.

Speaker Change: First with the wheel Rolling 32, and in the personal side roads 15 later in the quarter.

Matthew Reintjes: We are particularly excited about the most recent launch of the Roadie 15, our smallest hardcore in the lineup, featuring an attractive $200 opening price. We see strong early demand signals for this product and are working to build our supply. Overall, despite some of the persistent narrative in the market around higher ticket spending, we saw our cooler category performance build throughout the quarter and ultimately exceed our expectations, which we believe will set us up well for the back half of the year.

Speaker Change: We are particularly excited with the most recent launch of the <unk> 15, our smallest hardcore and the lineup featuring an attractive $200 opening price points.

Speaker Change: We see the strong early demand signals for this product and are working to build our supply.

Speaker Change: Overall, despite the persistent narrative in the market around higher ticket spending we saw our cooler category performance build throughout the quarter and ultimately exceed our expectations, which we believe will set us up well for the back half of the year.

Matthew Reintjes: And now, like through the call over to Matt. Thanks Tom and good morning. Yet he wrapped a great first half of 2024 showcasing the strength of our brand, our products, and our global good-a-market. As we have highlighted in the past, the second quarter includes a number of key moments including Mother's Day, Father's Day, in the return of summer, creating a perfect intersection for our brand and product. Our innovation across our portfolio in particular coolers proved to be impactful, creating what we believe will be momentum going into the second half of the year and beyond.

Matthew Reintjes: To complement our coolers, later this year, we will introduce our first food organization and storage container. These highly durable products are optimized for use within our hard cooler and soft cooler ecosystem and also as a standalone.

Speaker Change: To complement our coolers later this year, we will introduce our first food organization and storage containers.

Speaker Change: Highly durable products are optimized for use within our hard cooler and soft cooler ecosystem and also as a standalone.

Matthew Reintjes: On the equipment side, we continue to integrate the designs and talent of Mystery Ranch with the YETI team. We've established a robust, long-term roadmap for the category and are on track to launch a range of new products starting in the first quarter of 2025, roughly one year post acquisition. In drinkware, our new products continue to deliver, including our expanded stackable tumblers and straw mugs.

Speaker Change: On the equipment side, we continue to integrate the designs and talent of mystery ranch with Yeti team.

Matt Reintjes: We've established a robust, long-term roadmap for the category and are on track to launch a range of new products starting in the first quarter of 2025, roughly one year post-acquisition. This was particularly evident in the French press, which received a number of industry accolades, strong social sentiment, and excellent consumer demand. Great Products is supported by a range of impactful channels to market, leveraging a strong network of wholesale partners and extending our reach through our DTC channel.

Speaker Change: We've established a robust long term roadmap for the category and are on track to launch a range of new products starting in the first quarter of 2025, roughly one year post acquisition.

Matthew Reintjes: Complimenting our focus on coolers, we continue to drive expansion in our drink art portfolio. These efforts are seen in our wholesale cell crew, our social engagement and sentiment, and our global performance. In the quarter, we drove 9% sales growth, above expectations, and led by coolers equipment and international. We have decided to think this top line performance and showing the continued residents in strength of the brand. We delivered excellent gross margin expansion on top of significant improvement last year.

Speaker Change: And drink, where our new products continue to deliver including our expanded stackable tumblers and Starbucks.

Matthew Reintjes: We're also seeing strong receptivity to new additions that are highlighting the opportunity in the broader food and beverage space. This was particularly evident with the French press, which received a number of industry accolades, strong social sentiment, and excellent consumer demand. Our category expansion will continue in the second half of the year, starting with the introduction of our first line of cookware products. As planned, we will introduce three sizes of YETI cast iron skillets later this month, which will initially be available in our YETI direct channels, with prices ranging from $150 to $250.

Speaker Change: We're also seeing strong receptivity to new additions that are highlighting the opportunity in the broader food and beverage space.

Speaker Change: This was particularly evident with the French press, which received a number of industry accolades strong social sentiment and excellent consumer demand.

Speaker Change: Our category expansion will continue in the second half of the year, starting with the introduction of our first line of cookware products as planned we will introduce three sizes of Yeti cast Iron Skillet later, this month, which will initially be available in our yeti direct channels with prices ranging from $150 to $250.

Matthew Reintjes: I would like to thank our team for managing and neutralizing the ongoing risks in the dynamic supply chain environment. We anticipate that the end result of these efforts, and then momentum we are seeing, put us on pace to deliver record high gross margins for the full year. Our top line and gross margin execution continues to support our long term growth and strategic investments, while also delivering upside to the bottom line. As we move to the second half of the year, we have ample reason to be encouraged across product categories, channels and geographies.

Matthew Reintjes: We believe this will be the best cast iron in the world, opening the door for broader opportunities in the cookware and culinary space going forward. Importantly, any expansion will fit within the YETI ecosystem and ethos of leading products built with durability, performance, and design. Great Products is supported by a range of impactful channels to market, leveraging a strong network of wholesale partners and extending our reach through our DTC channel, although excluding the impact of gift cards on our DTC business. Our second quarter results demonstrate the balanced strength of these channels. As expected, we saw the full impact of the gift card comparison in our e-commerce.

Speaker Change: We believe this will be the best cast iron in the world opening the door for broader opportunities in the cookware culinary space going forward.

Speaker Change: Importantly, any expansion will fit within the yeti ecosystem and ethos of leading products fit with durability performance and design.

Speaker Change: Great product is supported by a range of impactful channels to market leveraging a strong network of wholesale partners and extending our reach through our DTC channels.

Matthew Reintjes: We'll be mindful of the macroeconomic and geopolitical complexities that we expect to remain present through the year. Our focus remains on controlling what we can, and being nimble and prepared to respond effectively in a face of uncertainty. For YETI, that always begins with our approach to customer engagement and delivering uncompromising product. It also means a commitment to investment so we can efficiently and globally scale our business. This investment includes the addition of key roles in our leadership team to manage Asia and Europe, additions to our global logistics footprint, and the build out of capabilities across our regions to support our expanding product offering.

Speaker Change: Excluding the impact of gift cards on our DTC business, our second quarter results demonstrate the balanced strength of these channels.

Matt Reintjes: Excluding the impact of gift cards on our DTC business, our second quarter results demonstrated the balanced strength of these channels. Within our retail stores, we're focused on delivering an unparalleled customer experience. We added our 21st YETI retail store outside of Kansas City during the second quarter.

Speaker Change: As expected we saw the full impact of the gift card comparison in our E Commerce business.

Matthew Reintjes: In the quarter, we were pleased by the positive trend we saw in average order value in units per transaction, as we expect consumers to continue to be discerning with their purchase. Our Amazon marketplace continues to provide reach, driving strong growth across Drinkware and C&E. Growth in corporate sales included the emergence of our international business and positive order volume in our U.S. business, even though we continue to see signs of caution in corporate spending. Within our retail stores, we're focused on delivering an unparalleled customer experience. We added our 21st YETI retail store outside of Kansas City during the second quarter.

Speaker Change: In the quarter, we were pleased by the positive trend we saw on average order value and units per transaction as we expect consumers to continue to be discerning with their purchases.

Speaker Change: Our Amazon marketplace continues to provide reach driving strong growth across <unk> and <unk> growth.

Matthew Reintjes: Additionally, we continue to drive the strategic diversification of our global supply. Today, the approximate 40% of our total cost of goods is tied to product sourcing China, primarily related to our drinkware portfolio. As we have previously discussed, we began our major supply chain transformation journey in 2018, beginning with our soft goods. At that time, we also indicated we started to optimize our drinkware supply base, including process improvements and automation efforts with our partners.

Speaker Change: Growth in corporate sales included the emergence of our international business and positive order volume in our U S business, even though we continue to see signs of caution and corporate spending.

Speaker Change: Within our retail stores, we're focused on delivering an unparalleled customer experience.

Speaker Change: We added our 'twenty, one yeti retail store outside of Kansas City during the second quarter we.

Matthew Reintjes: We remain on track to reach 24 locations by the end of the year, and we are incredibly excited to announce today's grand opening of our first Canadian store in Calgary. In our wholesale channel, we saw balanced, positive demand across our categories, highlighting the brand's strong positioning and consideration for the summer buying season. And we've maintained healthy inventory levels across the channel. As we have highlighted in recent quarters, we continue to build our brand experience with our existing customers.

Speaker Change: We remain on track to reach 24 locations by the end of the year and we are incredibly excited to announce today's grand opening of our first Canadian store in Calgary.

Speaker Change: In our wholesale channel, we saw balanced positive demand across our categories highlighting the brand's strong positioning in consideration for the summer buying season.

Matthew Reintjes: As mentioned in early 2023, we successfully proved out our model and began our first production location for drinkware outside of China. We are pleased with the quality and performance of this initiative, and by year in 2024, expect to bring online a second non-China location for drinkware. As a result, we expect that by the end of this year, approximately 20% of our global drinkware production capacity will be located outside of China. As we look forward to other opportunities and initiatives, we believe we can extend this program further, providing greater global scale, diversification, and reach of our supply base.

Speaker Change: We've maintained healthy inventory levels across the channel.

Speaker Change: As we have highlighted in recent quarters, we continued to build our brand experience with our existing accounts.

Matthew Reintjes: Partner with new accounts globally and explore new wholesale opportunities that match our broadening range of product categories. Our international growth continues to showcase the relevance and opportunity for YETI. It also reinforces that our growth and brand playbook travels. International revenues for the period increased 34% to reach 17% of our total business, continuing to ramp from a 13% mix last year and 11% during the 2022 period.

Speaker Change: Thoughtfully partner with new accounts globally, and explore new wholesale opportunities that match, our broadening range of product categories.

Speaker Change: Our international growth continues to showcase the relevance and opportunity for yeti.

Matt Reintjes: Our international growth continues to showcase the relevance and opportunity for YETI. It also reinforces that our growth and brand playbook travels. And second, we're excited to add Martin Verjeen as our new Managing Director of the EMEA region. With his focus on building our brand in Europe and driving productivity, we are incredibly excited about this edition as we look to scale what is still a relatively untapped opportunity. To extend our momentum, we remain focused on meeting the needs of the urban customer, an area where we still see meaningful opportunity. This was amplified with both the Canadian and American teams in the Stanley Cup Finals. All while investing in the incredible growth opportunities we see globally.

Speaker Change: It also reinforces that our growth in brand playbook travel.

Speaker Change: International revenues for the period increased 34% to reach 17% of our total business.

Matthew Reintjes: Additionally, we expect to have the flexibility to allocate capacity to specific and markets for cost optimization. By the end of 2025, we plan that roughly half of our drinkware production capacity will reside outside of China and available to support our global growth. Going forward, we anticipate opportunity to scale this diversification even further to meet the needs of the business. It has been and will continue to be a significant priority for Yeti.

Speaker Change: Continuing to ramp from a 13% mix last year and 11% during the 2022 period.

Matthew Reintjes: We're incredibly bullish on this opportunity, particularly as European growth inflects and as we begin our approach to Asia in 2025. Providing a little more color on our existing regions, Europe posted strong gains across channels. We also made several important foundational improvements during the quarter. First, we successfully completed the transition of R3PL in the UK, following similar work in the Netherlands last year.

Speaker Change: We're incredibly bullish on this opportunity, particularly as Europe growth in flex as we began our approach to Asia in 2025.

Speaker Change: Providing a little more color on our existing regions Europe posted strong gains across channels.

Speaker Change: We also made several important foundational improvements during the quarter first we successfully completed the transition of our <unk> in the U K following similar work in the Netherlands last year.

Matthew Reintjes: Both facilities are operational and providing a more efficient network for our service for our customers. And second, we're excited to add Martin Verjeen as our new Managing Director of the EMEA region. With his focus on building our brand in Europe and driving productivity, we are incredibly excited with this edition as we look to scale what is still a relatively untapped opportunity. Our Australian business continues to outperform expectations with stirring across channels.

Speaker Change: Both facilities are operational in providing a more efficient network to our service our customers.

Speaker Change: And second we're excited to add Martin Virgin as our new managing director of the EMEA region.

Speaker Change: His focus on building our brand in Europe, and driving productivity. We are incredibly excited with this addition, as we look to scale what is still a relatively untapped opportunity.

Matthew Reintjes: Moving to our strategic priorities, a constant focus for our brand is extending our reach and broadening our access to global consumers. Many of these efforts are rooted in the communities we support. We have methodically evolved this focus while staying true to who we are across a range of varied but often connected audiences. For instance, Yeti has built a deep heritage in Western lifestyle. A very natural extension of these pursuits is the global equestrian community where we have thoughtfully built the foundation over the past few years.

Speaker Change: Our Australian business continues to outperform expectations with strength across channels.

Matthew Reintjes: To extend our momentum, we remain focused on meeting the needs of the urban customer, an area where we still see meaningful opportunity. The key step here is the recent debut of a store test with Rebel Sports, the leading premium sports retailer in the market.

Speaker Change: To extend our momentum we remain focused on meeting the needs of the urban customer an area, where we still see meaningful opportunity.

Speaker Change: A key step here is the recent debut of its store tests with rebel sports the leading premium sports retailer in the market.

Matthew Reintjes: Customization is another opportunity for both e-commerce and corporate sales. In Canada, we continue to drive the reach of our omni-channel and expanded product offerings to match the U.S. Additionally, we are finding opportunities to share impactful brand spend across North America. As mentioned, we ran a brand campaign that showcased YETI around the boards throughout the Stanley Cup playoffs, with a combination of brand and product marketing highlighting our NHL license. This was amplified with both the Canadian and American teams in the Stanley Cup Finals.

Speaker Change: Optimization is another opportunity for both e-commerce and corporate sales.

Speaker Change: In Canada, we continued to drive the reach of our omni channel and expanded product offerings to match the U S.

Matthew Reintjes: Many of these relationships start when we identify our product and use, which contributes to a natural relevance. In this case, product was being used to address hydration, storage, organization, and thermal retention. We then establish a variant through partnerships with organizations such as U.S, equestrian supporting global competitions and aligning with ambassadors. This is how we have built our 15 communities and is a key to how we establish sustainable relevance. We've taken a similar approaching golf, highlighted by our recent partnership with the Caddy Network, including 25 Caddies across the PGA and LPGA tours, using our products on a global stage.

Speaker Change: Additionally, we are finding opportunities to share impactful brand spend across North America.

Speaker Change: As mentioned, we ran a brand campaign showcased yeti around the boards throughout the Stanley Cup playoffs.

Speaker Change: With a combination of brand and product marketing highlighting our NHL license.

Speaker Change: This was amplified with both the Canadian and American team in the Stanley Cup finals.

Matthew Reintjes: While the wholesale environment in Canada remains challenging, we were encouraged by the sell-through performance at our largest account. Similar to Australia, we are also making progress with scaling our customization. Including our e-commerce capabilities and the growing traction of our corporate sales. As I look at our accomplishments for the first half of the year and the immense opportunity in front of us, I'm proud of our team and their ability to drive the YETI brand and deliver strong and profitable growth.

Speaker Change: While the wholesale environment in Canada remains challenging we're encouraged by the sell through performance at our largest accounts.

Speaker Change: Similar to Australia, we're also making progress scaling our customization business, including our e-commerce capabilities and the growing traction of our corporate sales.

Matthew Reintjes: This is led to our products organically making their way into the hands of touring professionals, earning social mentions and press and driving broader interest across golf. These organic connected approaches to community building drive high relevance with a range of new and existing customers, both at home and abroad. Our global focus extends to our ambassador network as well and you're up here today. We have partnered with nine new ambassadors across the world of skiing, snowboarding, climbing and culinary.

Speaker Change: As I look at our accomplishments for the first half of the year and the immense opportunity in front of US are proud of our team and their ability to drive the yeti brand and deliver strong and profitable growth.

Matthew Reintjes: Given the ongoing and considerable challenges in the market, we remain highly focused on managing our P&L and the strength of our balance sheet, all while investing in the incredible growth opportunities we see globally. Now, I would like to turn the call over to Mike to discuss our results and updated outlook.

Speaker Change: The ongoing and considerable challenges in the market.

Speaker Change: Remain highly focused on managing our P&L and the strength of our balance sheet.

Speaker Change: All while investing in the incredible growth opportunity, we see globally.

Matthew Reintjes: Overall, international ambassadors now represent nearly 30% of our total and will continue to be a significant focus as we look to extend the brand to new regions over time. Speaking of ambassadors, we were excited to see three of ours compete in Paris at the summer Olympics, including John John Florence and Katie Stone, who are our customers in surfing and Alex Megus in sports climbing. We are incredibly proud to partner with some of the best in what they do.

Speaker Change: Now I would like to turn the call over to Mike to discuss our results and updated outlook.

Michael McMullen: Thanks, Matt, and good morning, everyone. Before we start, I would like to provide a quick overview of several items contained in our second quarter gap numbers that impacted both the year-ago and current period results. I'll then review our non-GAAP performance for the period and close with an update to our fiscal 2024 outlook. We then look forward to taking your questions for the balance of the call.

Mike Mcfarlane: Thanks, Matt and good morning, everyone to start I would like to provide a quick overview of several items contained in our second quarter GAAP numbers that impacted both the year ago and current period results.

Mike McMullen: Thanks, Matt, and good morning, everyone. Before we start, I would like to provide a quick overview of several items contained in our second quarter gap numbers that impacted both the year ago and current period results. This update and other period costs reduced prior year gap sales by $24.5 million. By comparison, no adjustments were made to the recall reserve in this year's second quarter.

Matt Reintjes: And then just my follow-up question is, can you just provide any commentary on the sort of Amazon Prime Day in July, maybe versus last year, and do you plan to participate in any more Prime events as you move through the year?

Matt Reintjes: We've been pretty consistent in how we approach promotional periods. The types of products are typically a way for us to sort of build demand in a moment with colors that have been from prior seasons or first-generation products that we've moved to new generations, so nothing's really changed there. And then, you know, in terms of the future, we'll have to see how the year goes. Again, we don't want to get too deep in our commentary.

Mike Mcfarlane: I will then review our non-GAAP performance for the period and close with an update to our fiscal 2020 for outlook.

Speaker Change: We then look forward to taking your questions for the balance of the call.

Matthew Reintjes: Our reach is further supported by our partnerships in licensing programs. We're excited to announce yet he's continued movement of sports through our newly signed licensing agreement with the NFL. Under this agreement, fans will soon be able to purchase officially licensed yet any drinkware and coolers for all 32 NFL teams. The NFL license is ultimately key to us establishing our first NFL team partnership with the Dallas Cowboys as the official cooler and drinkware of the team, launching the season to look forward to building up this program as we move into 2025 and beyond.

Michael McMullen: I'll start with two call-outs that impacted our gap results. First, last year's second quarter included several adjustments to our recall reserve. This reserve was initially established in Q4 of 2022 and then updated in Q2 of 2023 to better reflect actual consumer recall activity. This update and other period costs reduced prior year gap sales by $24.5 million. Produced a prior year gap cost of goods sold by $5.1 million and reduced prior year GAAP SG&A expense by $10.7 million. By comparison, no adjustments were made to the recall reserve in this year's second quarter.

Speaker Change: I'll start with two callouts that impacted our GAAP results.

Speaker Change: First last year's second quarter included several adjustments to our recall reserve.

Speaker Change: This reserve was initially established in Q4 of 2022, and then updated Q2 of 2023 to better reflect actual consumer recall activity.

Speaker Change: This update and other period costs reduced prior year GAAP sales by $24 5 million produced prior year GAAP cost of goods sold by $5 1 million.

Matthew Reintjes: These new deals build on a sports foundation that now includes three of the largest pro leagues in the US in addition to a wide range global partnerships. Looking at innovation, we reinforce our leadership position in coolers this quarter as our full range of soft coolers is in market and we delivered on the previously mentioned innovation and hard coolers. To extend awareness and consideration, we leverage our strong heritage in the category with a range of media placements across linear and streaming TV, online channels, and a focus on live sports, including a family cup playoffs and crossfit games.

Speaker Change: That reduced prior year, GAAP SG&A expense by $10 7 million.

Speaker Change: By comparison, no adjustments were made to the recall reserve in this year's second quarter.

Michael McMullen: Second, our GAAP results this quarter include transition costs associated with the two acquisitions that we made earlier this year, and primarily the impact of purchase accounting on our gross margin. As per our historical reporting practices, the impact of these and other non-recurring items is excluded from our non-GAAP results. All of the results that I will discuss on today's call will be on a non-GAAP basis to better focus on the operational performance of the business.

Speaker Change: Second our GAAP results. This quarter include transition costs associated with the two acquisitions that we made earlier this year.

Speaker Change: Primarily the impact of purchase accounting on our gross margins.

Speaker Change: As per our historical reporting practices the impact of these and other nonrecurring items are excluded from our non-GAAP results.

Matthew Reintjes: Integrating our product campaigns and brand audience. In conjunction with these efforts, we prioritize education around these products, reinforcing the why and the how our products have redefined the category. We delivered these messages while bringing innovations to the hard cooler category. First, with the wheeled roadie 32 and in the personal side roadie 15 later in the quarter. We are particularly excited with the most recent launch of the roadie 15 are smallest hard cool in the lineup featuring an attractive $200 opening price point.

Speaker Change: All of the results that I will discuss on today's call will be on a non-GAAP basis to better focus on the operational performance of the business.

Mike McMullen: Now, moving on to the details of the quarter. And second, this quarter also includes contributions from Mystery Ranch. We are pleased with the integration of our two acquisitions, and they remain on track to deliver approximately 200 basis points of top-line growth for YETI in 2024. But we were very pleased with the initial performance of the new ROTI 32 and ROTI 15. Within our equipment categories, the YETI bags business continues to perform well, with our Sidekick and Tenga product lines exceeding our expectations. Finally, and as indicated, Mystery Ranch products continue to perform in line with our expectations.

Michael McMullen: Now, moving on to the details of the quarter, second quarter sales increased 9% to $464 million. This was above our expectations and was led by our performance in coolers and equipment and our international business. There were two underlying dynamics in our growth rate this quarter that I wanted to specifically mention. First, this quarter's year-over-year growth includes a nearly 300 basis point net headwind from gift card redemption, with $12.5 million redeemed last Q2 compared to just $2.3 million redeemed this quarter. And second, this quarter also includes contributions from Mystery Ranch.

Speaker Change: Now moving on to the details of the quarter.

Speaker Change: Second quarter sales increased 9% to $464 million. This was above our expectations and was led by our performance in coolers <unk> equipment and our international business.

Speaker Change: There were two compare dynamics in our growth rate this quarter that I wanted to specifically mentioned.

Matthew Reintjes: We see the strong early demand signals for this product and are working to build our supply. Overall, despite some of the persistent narrative of the market around higher ticket spending, we saw a cooler category performed build throughout the quarter and ultimately exceed our expectations. Which we believe will set us up well for the back half of the year. To complement our coolers later this year, we will introduce our first food organization and storage containers.

Speaker Change: First this quarter's year over year growth includes a nearly 300 basis point net headwind from gift card redemptions with $12 5 million redeemed last Q2 compared to just $2 3 million redeemed this quarter.

Speaker Change: And second this quarter also includes the contributions from mystery Ranch.

Michael McMullen: We are pleased with the integration of our two acquisitions, and they remain on track to deliver approximately 200 basis points of top-line growth for YETI in 2024. In reviewing our categories, coolers and equipment sales increased 14% to $206 million. We had a strong quarter and cooler, supported by the combined initiatives and growing momentum that Matt outlined. Soft coolers outperformed our expectations, with the complete line of M-Series backpacks and coats fully in stock across the market following last year's recall.

Speaker Change: We are pleased with the integration of our two acquisitions and they remain on track to deliver approximately 200 basis points of topline growth for yeti in 2024.

Matthew Reintjes: These highly durable products are optimized for use within our hard cooler and soft cooler ecosystem and also as a standalone. On the equipment side, we continue to integrate the designs and talent of mystery ranch with the Yeti. We established a robust long-term roadmap for the category and are on track to launch a range of new products starting in the first quarter of 2025, roughly one year post acquisition. In drinkware, our new products continue to deliver, including our expanded stackable tumblers and straw mugs.

Speaker Change: Reviewing our categories coolers, <unk> equipment sales increased 14% to $206 million we.

Speaker Change: We had a strong quarter in coolers supported by the combined initiatives and growing momentum that Matt outlined.

Speaker Change: Soft coolers outperformed our expectations with a complete line of N series backpacks and toads fully in stock across the market following last year's recall.

Matthew Reintjes: We're also seeing strong receptivity to new additions that are highlighting the opportunity in the broader food and beverage space. This was particularly evident with the French press which received a number of industry accolades. This is strong social sentiment and excellent consumer demand. Our category expansion will continue in the second half of the year, starting with the introduction of our first line of cookware products. As planned, we will introduce three sizes of YETI Catharine skilllets later this month, which will initially be available in our YETI direct channels with prices ranging from $150 to $250.

Michael McMullen: Our hard cooler business faced a tough comparison given the benefit it experienced last year from not having soft coolers in the market heading into the peak summer season, but we were very pleased with the initial performance of the new Rody 32 and Rody 15. Further supporting our optimism for coolers in the back half of the year. Additionally, within our equipment categories, the YETI bags business continues to perform well, with our Sidekick and Tenga product lines exceeding our expectations. In addition, our Camino tote bags continue to grow nicely as the awareness of this fantastic product line builds. Finally, and as indicated, Mystery Ranch products continue to perform in line with our expectations.

Speaker Change: Our hard cooler business faced a tough comparison, given the benefit it experienced last year from not having soft coolers in the market heading into the peak summer season.

Speaker Change: But we were very pleased with the initial performance of the new Roadie 32, and <unk> 15 further supporting our optimism for coolers in the back half of the year.

Speaker Change: Within our equipment categories. The yeti bags business continues to perform well with our sidekick and tango product lines exceeding our expectations.

Matthew Reintjes: We believe this will be the best cast iron in the world opening the door for broader opportunities in the cookware and culinary space going forward. Importantly, any expansion will fit within the YETI ecosystem and ethos of leading products built with durability, performance, and design. Great product is supported by a range of impactful channels to market, leveraging a strong network of wholesome partners and extending our reach through our DTC channel. Excluding the impact of gift cards on our DTC business, our second quarter results demonstrate the balanced strength of these channels.

Speaker Change: In addition, our comino tote bags continued to grow nicely as the awareness of this fantastic product line and builds.

Speaker Change: Finally, and as indicated mystery ranch products continue to perform in line with our expectations.

Michael McMullen: Drinkware sales increased 6% to $247 million, which was generally in line with expectations. Category growth continues to be supported by the overall breadth of our product assortment, the strong success of new innovations launched over the past year, and the contribution from our international business. Our growing lineup of tabletop and barware options was also a highlight in Q2. As Matt mentioned, the French press is off to a fantastic start since launch, and we are seeing good demand for several other products in our portfolio, such as our new Rambler 16 stackable cup and our new Rambler 14 stackable mug.

Speaker Change: <unk> sales increased 6% to $247 million, which was generally in line with expectations.

Speaker Change: Category growth continues to be supported by the overall breadth of our product assortment. The strong success of new innovation launched over the past year and the contribution from our international business.

Matthew Reintjes: As expected, we saw the full impact of the gift card comparison in our e-commerce business. In the quarter, we were pleased by the positive trend we saw on average order value and units per transaction, as we expect consumers to continue to be discerning with their purchase. Our Amazon marketplace continues to provide reach, driving strong growth across drinkware and C&E. Growth in corporate sales included the emergence of our international business and positive order volume in our US business, even though we continue to see signs of caution in corporate spending.

Speaker Change: Our growing lineup of tabletop and borrower options was also a highlight in Q2 as Matt mentioned, the French press is off to a fantastic start since launch and we are seeing good attachment for several other products in our portfolio such as our new Rambler 16, Stackable Cup and our new Rambler 14 Stackable Margaret.

Michael McMullen: As a reminder, all of these products launched within the last 12 months. In addition, our limited flask and shot glass releases were a success, selling out in less than a week. We plan to have both products back in stock later in the third quarter. From a channel perspective, wholesale sales increased 11% to $213 million, driven by growth in both C&E and Drinkware. We saw growth on a sell-through basis across both categories as well. Inventory in the channel remains healthy and is well-positioned to support demand for the back half of the year.

Speaker Change: As a reminder, all of these products launched within the last 12 months.

Speaker Change: In addition, our limited flask and Shotglass releases, where our success selling out in less than a week we.

Speaker Change: We plan to have both products back in stock later in the third quarter.

Matthew Reintjes: Within our retail stores, we're focused on delivering an unparalleled customer experience. We added our 21st YETI retail store outside of Kansas City during the second quarter. We were made on track to reach 24 locations by the end of the year, and we were incredibly excited to announce today's grand opening of our first Canadian store in Calvary. In our wholesale channel, we saw balanced positive demand across our categories, highlighting the brand's strong positioning and consideration for the summer buying season, and we've maintained healthy inventory levels across the channel.

Speaker Change: From a channel perspective wholesale sales increased 11% to $213 million driven by growth in both <unk> and drink Ware.

Speaker Change: We saw growth on a sell through basis across both categories as well.

Speaker Change: Inventory in the channel remains healthy and is well positioned to support demand for the back half of the year.

Michael McMullen: Direct-to-consumer sales grew 7% to $250 million, also with solid growth in both C&E and Drinkware. All of our D2C channels posted growth in the quarter, led by our Amazon business. We were also pleased with the growth of e-commerce, especially considering it absorbed the entire gift card impact. Excluding the headwind from gift cards, total D2C growth was approximately 12%. Outside the U.S., sales grew 34 percent to 77 million, driven by strong growth in Europe and Australia.

Speaker Change: Direct to consumer sales grew 7% to $250 million.

Speaker Change: Also with solid growth in both Sydney and drink Ware.

Matthew Reintjes: As we have highlighted in recent quarters, we continue to build our brand experience with our existing accounts, thoughtfully partner with new accounts globally, and explore new wholesale opportunities that match our broadening range of product categories. Our international growth continues to showcase the relevance and opportunity for YETI. It also reinforces that our growth and brand playbook travel. International revenues for the period increased 34% to reach 17% of our total business, continuing to ramp from a 13% mix last year and 11% during the 2022 period.

Speaker Change: All of our DTC channels posted growth in the quarter led by our Amazon business.

Speaker Change: We were also pleased with the growth of e-commerce, especially considering it absorbed the entire gift card impact.

Speaker Change: Excluding the headwind from gift cards total DTC growth was approximately 12%.

Speaker Change: Outside the U S sales grew 34% to $77 million driven by strong growth in Europe and Australia.

Michael McMullen: We continue to be very pleased with the results and the momentum that we are seeing internationally and expect to continue investing to drive brand awareness, build out our local teams, and establish the infrastructure needed to support what we believe is a significant opportunity for growth. Moving on to margins, gross profit increased 14% to $268 million, or 57.7% of sales, compared to 54.9% in the same period last year. Negative drivers of this 280 basis point increase include 320 basis points from lower inbound freight and 90 basis points from lower product cost.

Speaker Change: We continue to be very pleased with the results and the momentum that we're seeing internationally and expect to continue investing to drive brand awareness.

Matthew Reintjes: We're incredibly bullish on this opportunity, particularly as Europe grows influx as we begin our approach to Asia in 2025. Providing a little more color on our existing regions, Europe posted strong gains across the channel. We also made several important foundational improvements during the quarter. First, we successfully completed the transition of our 3PL in the UK, following similar work in the Netherlands last year. Both facilities are operational and providing a more efficient network to our service our customers.

Speaker Change: <unk> out our local teams and established the infrastructure needed to support what we believe is a significant opportunity for growth.

Mike McMullen: We plan to have both products back in stock later in the third quarter. Moving on to margins, gross profit increased 14% to $268 million, or 57.7% of sales, compared to 54.9% in the same period last year. These gains were partially offset by 50 basis points from strategic price decreases on certain hard coolers that we implemented during the first quarter and 80 basis points from a combination of other smaller empowerments. Non-variable expenses increased 80 basis points as a percent of sales, primarily driven by higher employee costs.

Michael McMullen: These gains were partially offset by 50 basis points from strategic price decreases on certain hard coolers that we implemented during the first quarter and 80 basis points from a combination of other smaller impacts. SG&A expenses for the quarter increased 12% to $188 million, or 40.5% of sales, compared to 39.1% in the same period last year. Non-variable expenses increased 80 basis points as a percent of sales, primarily driven by higher employee costs.

Speaker Change: Moving on to margins gross profit increased 14% to $268 million or <unk> 57, 7% of sales compared to 54, 9% in the same period last year.

Speaker Change: Positive drivers of this 280 basis point increase include.

Speaker Change: 320 basis points from lower inbound freight and 90 basis points from lower product costs.

Matthew Reintjes: In second, we're excited to add Martin Virginia as our new managing director of the Amia region. With his focus on building our brand in Europe and driving productivity, we are incredibly excited with this addition as we look to scale what is still at relatively untapped opportunity. Our Australian business continues to outperform expectations with throwing across channels. To extend our momentum, we remain focused on meeting the needs of the urban customer, an area where we still see meaningful opportunity.

Speaker Change: These gains were partially offset by 50 basis points from strategic price decreases on certain hard coolers that we implemented during the first quarter.

Speaker Change: And 80 basis points from a combination of other smaller impacts.

Speaker Change: SG&A expenses for the quarter increased 12% to $188 million or 45% of sales compared to 39, 1% in the same period last year.

Matthew Reintjes: The key step here is the recent debut of a store test with rebel sports, the leading premium sports retailer in the market. Customization is another opportunity for both e-commerce and corporate sales. In Canada, we continue to drive the reach of our Army Channel and expanded product offerings to match the US. Additionally, we are finding opportunities to share impactful brand spend across North America. As mentioned, we ran a brand campaign that showcased YETI around the boards throughout the Stanley Cup playoffs, with a combination of brand and product marketing, highlighting RNHL lights.

Speaker Change: Non variable expenses increased 80 basis points as a percent of sales primarily driven by higher employee costs.

Michael McMullen: Variable expenses increased 60 basis points as a percent of sales, primarily driven by our Amazon channel. Looking forward, we do expect to get some modest leverage on our variable costs in the second half of this year. Operating income increased 19% to $80 million, or 17.3% of sales, an increase of 160 basis points over the 15.7% that we reported in the prior year period. Net income increased 20 percent to $60 million, or $0.70 per diluted share, compared to $0.57 in the prior year period. Turning to our balance sheet, we ended the quarter with $213 million in cash compared to $223 million in the year-ago period.

Speaker Change: Variable expenses increased 60 basis points as a percent of sales primarily driven by our Amazon channels.

Speaker Change: Looking forward, we do expect to get some modest leverage on our variable costs in the second half of this year.

Speaker Change: Operating income increased 19% to $80 million or 17, 3% of sales an increase of 160 basis points over the 15, 7% that we reported in the prior year period.

Matthew Reintjes: This was amplified with both the Canadian and American team in the Stanley Cup finals. While the wholesale environment in Canada remains challenging, we were encouraged by its sell-through performance at our large accounts. Similar to Australia, we are also making progress scaling our customization business, including our e-commerce capabilities and the growing traction of our corporate sales.

Speaker Change: Net income increased 20% to $60 million or <unk> 70 per diluted share compared to <unk> 57 in the prior year period.

Speaker Change: Turning to our balance sheet, we ended the quarter with $213 million in cash compared to $223 million in the year ago period.

Michael McMullen: Inventory increased 17% year over year to $378 million, primarily driven by the return of our full lineup of soft coolers, as well as inventory from our acquisition of Mystery Ranch. We continue to expect year-in-inventory growth to be in the range of sales growth. So, as we indicated last quarter, growth on a quarter-to-quarter basis can fluctuate based on the timing of wholesale channel shipments and product launches. Total debt, excluding unamortized deferred financing fees and finance leases, was $80 million compared to $84 million at the end of last year's second quarter.

Speaker Change: Inventory increased 17% year over year to $378 million, primarily driven by the return of our full lineup of soft coolers as well as inventory from our acquisition of Mystery Ranch.

Matthew Reintjes: That look at our accomplishments for the first half of the year and the immense opportunity in front of us on proud of our team and their ability to drive the YETI brand and deliver strong and profitable growth. Given the ongoing and considerable challenges in the market, we remain highly focused on managing our P&L and the strength of our balance sheet, all while investing in the incredible growth opportunity we see globally.

Speaker Change: We continue to expect year end inventory growth to be in the range of sales growth.

Speaker Change: So as we indicated last quarter growth on a quarter to quarter basis can fluctuate based on the timing of wholesale channel shipments and product launches.

Michael McMullen: Now, I would like to turn the call over to Mike to discuss our results in updated outlook. Thanks, Matt, and good morning, everyone. To start, I would like to provide a quick overview of several items contained in our second quarter gap numbers that impacted both the year ago and current period results.

Speaker Change: Total debt, excluding unamortized deferred financing fees and finance leases was $80 million compared to $84 million at the end of last year's second quarter.

Michael McMullen: Now turning to our fiscal 2024 outlook, we now expect 4-year sales to increase between 8% and 10% compared to fiscal 2023's adjusted net sales, which is up from our prior outlook of between 7% and 9% top-line growth. This range continues to include a contribution of approximately 200 basis points from our Q1 acquisition, but also includes a headwind of approximately 150 basis points from gift cards. Our expectations for the back half of the year are relatively unchanged, and we expect growth to be balanced across the third and fourth quarters. We continue to take what we would call a prudently conservative approach in our demand planning for the second half of the year.

Speaker Change: Now turning to our fiscal 2020 for outlook.

Mike McMullen: We now expect 4-year sales to increase between 8% and 10% compared to fiscal 2023's adjusted net sales, which is up from our prior outlook of between 7% and 9% top-line growth. This range continues to include a contribution of approximately 200 basis points from our Q1 acquisition. Our expectations for the back half of the year are relatively unchanged, and we expect growth to be balanced across the third and fourth quarters. By category, we continue to expect coolers and equipment to outpace drinkware, supported by strong performance in soft coolers, recent innovation in hard coolers, and the incremental sales of Mystery Ranch products.

Speaker Change: Now expect full year sales to increase between 8% and 10% compared to fiscal 2020 Three's adjusted net sales, which is up from our prior outlook of between 7% and 9% topline growth. This.

Michael McMullen: I'll then review our non-gap performance for the period and close with an update to our fiscal 2024 outlook. We then look forward to taking your questions for the balance of the call. I'll start with two callouts that impacted our gap results. First, last year's second quarter included several adjustments to our recall reserve. This reserve was initially established in Q4 of 2022 and then updated to Q2 of 2023 to better reflect actual consumer recall activity.

Speaker Change: This range continues to include a contribution of approximately 200 basis points from our Q1 acquisitions.

Speaker Change: That also includes a headwind of approximately 150 basis points from gift cards.

Speaker Change: Our expectations for the back half of the year are relatively unchanged and we expect growth to be balanced across the third and fourth quarters.

Michael McMullen: This update and other period costs reduced prior year gap sales by 24.5 million, reduced prior year gap cost of goods sold by 5.1 million, and reduced prior year gap SG&A expense by 10.7 million. By comparison, no adjustments were made to the recall reserve in this year's second quarter. Second, our gap results this quarter include transition costs associated with the two acquisitions that we made earlier this year. Primarily the impact of purchase accounting on our gross markets.

Speaker Change: We continue to take what we would call a prudently conservative approach in our demand planning for the second half of the year.

Speaker Change: We are updating several elements of our outlook as we look across channels categories and geographies by channel. We now expect slightly higher performance from our wholesale channel versus DTC, given our performance in Q2, and our expectation for continued sell in and sell through strength in the second half of the year.

Michael McMullen: We are updating several elements of our Outlook as we look across channels, categories, and geographies. By channel, we now expect slightly higher performance from our wholesale channel versus D2C, given our performance in Q2 and our expectation for continued sell-in and sell-through strength in the second half of the year. By category, we continue to expect coolers and equipment to outpace drinkware, supported by strong performance in soft coolers, recent innovation in hard coolers, and the incremental sales of Mystery Ranch products.

Speaker Change: By category, we continue to expect coolers and equipment to outpace strength were supported by strong performance in soft coolers recent innovation in hard coolers and the incremental sales of mystery ranch products.

Michael McMullen: As per our historical reporting practices, the impact of these and other non-recurring items are excluded from our non-gap results. All of the results that I will discuss on today's call will be on a non-gap basis to better focus on the operational performance of the business.

Michael McMullen: Finally, we now expect international growth to approach 30% with domestic growth holding in the mid-single-digit range. Based on our strong Q2 performance, we are increasing our 2024 gross margin target to approximately 58.5%, from our prior target of approximately 58% and versus 56.9% last year. Over the last six quarters, we have realized significant benefits and gross margin from the post-pandemic drop in inbound freight rates. Given we have now come to much of the benefits from these lower freight costs, we continue to expect our second half gross margins to be approximately flat as compared to the prior year period.

Speaker Change: Finally, we now expect international growth to approach, 30% with domestic growth holding in the mid single digit range.

Speaker Change: And our strong Q2 performance, we are increasing our 2020 for gross margin target to approximately 58, 5%.

Michael McMullen: Now moving on to the details of the quarter. Second quarter sales increased 9% to 464 million. This was above our expectations and was led by our performance and coolers and equipment and our international business.

Speaker Change: From our prior target of approximately 58% in.

Speaker Change: And versus 56, 9% last year.

Speaker Change: Over the last six quarters, we have realized significant benefits in gross margin from the post pandemic drop in inbound freight rates.

Michael McMullen: There were two compare dynamics in our growth rate this quarter that I wanted to specifically mention. First, this quarter's year over year growth includes a nearly 300 basis point net headwind from gift card redemption with 12.5 million redeem last Q2 compared to just 2.3 million redeemed this quarter. And second, this quarter also includes the contributions from mystery ranch. We are pleased with the integration of our two acquisitions and they remain on track to deliver approximately 200 basis points of top line growth for YETI in 2024.

Mike McMullen: Given we have now achieved much of the benefit from these lower freight costs, we continue to expect our second-half gross margins to be approximately flat as compared to the prior year period. However, we believe these costs will be transitory and manageable within our P&L, which is allowing us to flow through the upside in our Q2 gross margins to the full year outline. With continued gross margin traction, we are investing a portion of these incremental gains into SG&A across a number of initiatives to support our global expansion efforts, with similar growth rates expected in both the 3rd and 4th quarters.

Speaker Change: Given we have now come to much of the benefit from these lower freight costs. We continue to expect our second half gross margins to be approximately flat as compared to the prior year period.

Speaker Change: Also I want to mention a relatively new dynamic in the market as it relates to inbound freight costs.

Michael McMullen: Also, I want to mention a relatively new dynamic in the market as it relates to inbound break costs. While most of our projected capacity is under contract, we are seeing peak season surcharges on inbound freight shipments earlier in the year than we have seen in prior years and at higher levels.

Speaker Change: While most of our projected capacity is under contract.

Speaker Change: Are seeing peak season surcharges on inbound freight shipments earlier in the year than we have seen in prior years and at higher levels.

Michael McMullen: However, we believe these costs will be transitory and manageable within our P&L, which is allowing us to flow through the upside in our Q2 gross margins to the full year outline. With continued gross margin traction, we are investing a portion of these incremental gains into SG&A across a number of initiatives to support our global expansion efforts. As a result, we now expect to grow full-year SG&A slightly above the high end of our sales range, with similar growth rates expected in both the 3rd and 4th quarters.

Speaker Change: However, we believe these costs will be transitory and manageable within our P&L, which is allowing us to flow through the upside in our Q2 gross margins to the full year outlook.

Michael McMullen: Reviewing our categories, cooler than equipment sales increased 14% to 206 million. We had a strong quarter and cooler supported by the combined initiatives and growing momentum that met outlined. Soft coolers outperformed our expectations with the complete line of in series backpacks and totes fully in stock across the market following last year's recall. Our hard cooler business faced a tough comparison given the benefit it experienced last year from not having soft coolers in the market heading into the peak summer season.

Speaker Change: With continued gross margin traction we are investing a portion of these incremental gains into SG&A across a number of initiatives to support our global expansion efforts.

Speaker Change: As a result, we now expect to grow full year SG&A slightly above the high end of our sales range with similar growth rates expected in both the third and fourth quarters.

Michael McMullen: But we were very pleased with the initial performance of the new rowdy 32 and rowdy 15 further supporting our optimism for coolers in the back half of the year. Within our equipment categories, the YETI bags business continues to perform well with our sidekick and tango product lines exceeding our expectations. In addition, our Camino tote bags continue to grow nicely as the awareness of this fantastic product line builds. Finally, and as indicated, mystery ranch products continue to perform in line with our expectations.

Speaker Change: We now expect adjusted operating margin of approximately 16, 5% at the high end of our prior outlook of between 16% and 16, 5% and compared to 15, 6% in fiscal 2023.

Mike McMullen: We now expect an adjusted operating margin of approximately 16.5 percent, at the high end of our prior outlook of between 16 and 16.5 percent, and compared to 15.6% in fiscal 2023, while balancing both M&A opportunities and the remaining $200 million share repurchase authorization. Heading into the back half of the year, we will remain consistent in our focus, delivering strong earnings growth while also investing in our business to take advantage of what we believe is a tremendous opportunity in front of us and generating strong free cash flow, which will allow us to create further value for our shareholders. Now, I'd like to turn the call back over to the operator to take your questions.

Michael McMullen: We now expect an adjusted operating margin of approximately 16.5 percent, at the high end of our prior outlook of between 16 and 16.5 percent, and compared to 15.6% in fiscal 2023. Below the operating line, we expect an effective tax rate of approximately 25.2% for the year, slightly above the 24.8% rate in 2023, and 4-year diluted shares outstanding of approximately $86 million, reflecting the $100 million accelerated share repurchase that was fully executed in April. And we now expect adjusted earnings per diluted share to increase 16% to 18% to between $2.61 and $2.65. The budget was prepared at $2.25 in fiscal 2023.

Speaker Change: Below the operating line, we expect an effective tax rate of approximately 25, 2% for the year slightly above the 24, 8% rate in 2023 and full year diluted shares outstanding of approximately $86 million, reflecting the $100 million accelerated share repurchase that was.

Michael McMullen: Think we're sales increased 6% to 247 million, which was generally in line with expectations. Category growth continues to be supported by the overall breadth of our product assortment. The strong success of new innovation launched over the past year and the contribution from our international business. Our growing lineup of tabletop and borrower options was also highlighting Q2. As Matt mentioned, the French press is off to a fantastic start since launch. And we are seeing good attachment for several other products in our portfolio, such as our new Ramler 16 stackable cup and our new Ramler 14 stackable mug.

Speaker Change: Fully executed in April.

Speaker Change: And we now expect adjusted earnings per diluted share to increased 16% to 18% to between $2 61.

Speaker Change: And $2 65.

Speaker Change: Compared to $2 25 in fiscal 2023.

Michael McMullen: As for cash, we now expect full-year capital expenditures of between $50 million and $60 million and free cash flow of between $150 million and $200 million. Going forward, we will remain opportunistic with our capital allocation strategy. Balancing both M&A opportunities and the remaining $200 million share repurchase authorization, this was another great quarter for YETI. Our execution in the first half led to strong top and bottom line performance, which supported our confidence in raising our outlets for the year.

Speaker Change: As for cash we now expect full year capital expenditures of between $50 million and $60 million and free cash flow of between $150 million and $200 million.

Speaker Change: Going forward, we will remain opportunistic with our capital allocation approach.

Speaker Change: Balancing both M&A opportunities and the remaining $200 million share repurchase authorization.

Michael McMullen: As a reminder, all of these products launched within the last 12 months. In addition, our limited flask and shot glass releases were a success, selling out in less than a week. We plan to have both products back in stock later in the third quarter. From a channel perspective, wholesale sales increased 11% to 213 million, driven by growth in both C&E and drinkware. We saw growth on a self-drew basis across both categories as well.

Speaker Change: This was another great quarter for Yeti.

Speaker Change: Our execution in the first half led to strong top and bottom line performance.

Speaker Change: Which supported our confidence in raising our outlook for the year.

Michael McMullen: Heading into the back half of the year, we will remain consistent in our focus, driving growth through product innovation, international expansion, and our powerful omni-channel model. Delivering strong earnings growth while also investing in our business to take advantage of what we believe is a tremendous opportunity in front of us and generating strong free cash flow, which will allow us to create further value for our shareholders. Most importantly, we will remain focused on growing and strengthening the incredible YETI brand. Now, I'd like to turn the call back over to the operator to take your questions.

Speaker Change: Heading into the back half of the year, we will remain consistent in our focus.

Speaker Change: Giving growth through product innovation international expansion and our powerful omni channel model <unk>.

Speaker Change: Delivering strong earnings growth, while also investing in our business.

Michael McMullen: Inventory in the channel remains healthy and is well positioned to support demand for the back half of the year. Direct to consumer sales grew 7% to 250 million, also with solid growth in both C&E and drinkware. All of our D to C channels posted growth in the quarter led by our Amazon business. We were also pleased with the growth of e-commerce, especially considering it absorbed the entire gift card impact. Excluding the headwind from gift cards, total D to C growth was approximately 12%.

Speaker Change: <unk> advantage of what we believe is a tremendous opportunity in front of us and generating.

Speaker Change: <unk> strong free cash flow, which will allow us to create further value for our shareholders.

Speaker Change: Most importantly, we will remain focused on growing and strengthening the incredible yeti brand.

Speaker Change: Now I'd like to turn the call back over to the operator to take your questions.

Speaker Change: Thank you ladies.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number on your touchtone phone. You will hear a prompt if your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the 2. If you're using a speakerphone, please lift the handset before pressing any button. One moment, please, for your first question. Our first question will be from Brooke Roach.

Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.

Michael McMullen: Outside the US, sales grew 34% to 77 million, driven by strong growth in Europe and Australia. We continue to be very pleased with the results and the momentum that we are seeing internationally and expect to continue investing to drive brand awareness, fill out our local teams, and establish the infrastructure needed to support what we believe is a significant opportunity for growth.

Speaker Change: Do you have a question. Please press the star followed by the one on your Touchtone phone.

Speaker Change: Here's a problem you're head has been rates.

Speaker Change: Should you wish to decline from the polling process. Please press the star followed by the two.

Operator: If you're using a speakerphone, please lift the handset before pressing it.

Speaker Change: We are using a speaker phone please lift the handset before pressing any keith.

Speaker Change: One moment. Please for your first question.

Speaker Change: Our first question will be coming from Brookfield.

Michael McMullen: Moving on to margins, growth profit increased 14% to 268 million or 57.7% of sales compared to 54.9% in the same period last year. Positive drivers of this 280 basis point increase include 320 basis points from lower end bound trade and 90 basis points from lower product costs. These gains were partially offset by 50 basis points from strategic price decreases on certain hard coolers that we implemented during the first quarter and 80 basis points from a combination of other smaller impacts.

Brookfield: Good morning, and thank you so much for taking our question Matt you spoke in the prepared remarks about sales momentum for coolers building throughout the quarter. We've heard a lot of comments recently from a variety of sources, suggesting a choppy or Max macro backdrop I'm, hoping you can give us an update on how youre seeing current demand trends for the yeti brand in.

Brooke Roach: Good morning, and thank you so much for taking our question. Matt, you spoke in your prepared remarks about sales momentum for coolers building throughout the quarter. We've heard a lot of comments recently from a variety of sources suggesting a choppier macro backdrop. I'm hoping you can give us an update on how you're seeing current demand trends for the YETI brand in the U.S. across each of your key categories as you head into the back-to-school season. And then, as you look forward, what gives you confidence in sustained momentum this year and into 2025?

Speaker Change: The U S across each of your key categories as you head into the back to school season, and then as you look forward what gives you confidence that sustained momentum and holiday and into 2025.

Matthew Reintjes: Brooke, thanks. Thanks for the question. Yeah, I'd say a few things.

Speaker Change: Brook. Thanks, Thanks for the question, Yes, I'd say a few things as we look at.

Michael McMullen: SNA expenses for the quarter increased 12% to 188 million or 40.5% of sales compared to 39.1% in the same period last year. Non-variable expenses increased 80 basis points as a percent of sales, primarily driven by higher employee costs. Variable expenses increased 60 basis points as a percent of sales, primarily driven by our Amazon channel. Looking forward, we do expect to get some modest leverage on our variable costs in the second half of this year.

Brook: The market as we said around coolers.

Brook: We really like what we saw in coolers in Q2 and the performance as we had both soft coolers in hard coolers solely in the market. We had introduced innovation and really gave a consumer choice and giving choice not only cross form factor, but across price points, which I think is an important thing as we think about.

Speaker Change: Both the individual use in the giftable nature of our products in Q2, and importantly, as we go into that Q4, our gift giving season, we saw positive wholesale trends.

Matthew Reintjes: You know, as we look at the market, as we said, around coolers, we really like what we saw in coolers in Q2 and the performance as we had both soft coolers and hard coolers fully in the market. We introduced innovation and really gave the consumer choice and gave them choice, not only across form factors but across price points, which I think is an important thing as we think about both the individual use and the giftable nature of our products in Q2, and You know, we saw positive wholesale trends.

Michael McMullen: Operating income increased 19% to 80 million or 17.3% of sales and increase of 160 basis points over the 15.7% that we reported in the prior year period. Net income increased 20% to 60 million or 70 cents per diluted share compared to 57 cents in the prior year period. Turning to our balance sheet, we ended the quarter with 213 million in cash compared to 223 million in the year-ago period. Inventory increased 17% year-to-378 million, primarily driven by the return of our full line-up of soft coolers as well as inventory from our acquisition of mystery ranch.

Speaker Change: Importantly, our inventory, we think is really good shape.

Speaker Change: In the U S market in and around the World and we see that innovation continues to work and when you support the innovation with with strong brand strong crop marketing.

Speaker Change: We really like the uptake that we're seeing so we feel good about where the business is positioned recognizing that it is a choppy market and as I said in my remarks, and we said for multiple quarters being higher price point items are going to continue to be in focus.

Matthew Reintjes: You know, importantly, our inventory is in really good shape in the U.S. market and around the world, and we see that innovation continues to work. And when you support the innovation with strong brands and strong product marketing, we really like the uptake that we're seeing. So, we feel good about where the business is positioned, recognizing that it is a choppier market. And as I said in my remarks, and we've said for multiple quarters, we think higher price point items are going to continue to be in focus.

Matthew Reintjes: So, we're really trying to drive consideration and purchase over traffic. If traffic slows down, then we want to drive value, we want to drive engagement, and we want to put products in front of consumers that they want.

Speaker Change: So we're really trying to drive.

Speaker Change: Consideration and purchase.

Speaker Change: Over over traffic if traffic slows down then we want to drive we want to drive value want to drive engagement and one of our products in front of consumers that they want and Thats, where the innovation and brand plan I would say, we're seeing that same.

Michael McMullen: We continue to expect year-and-inventory growth to be in the range of sales growth. So as we indicated last quarter, growth on a quarter to quarter basis can fluctuate based on the timing of wholesale channel shipments and product launches. Total debt excluding unamortized deferred financing fees and finance leases was 80 million compared to 84 million at the end of last year's second quarter.

Matthew Reintjes: And that's where innovation and branding play in. I would say we're seeing that same opportunity globally. In the global markets where we're newer, we're really seeing great consumer adoption, we're seeing great brand interest, we're seeing great interest across the range of the portfolio. In our more established international markets, they're really continuing to hit their stride, and I think that's what led to a strong quarter overall for Yeti, but really a particularly strong international quarter.

Speaker Change: Opportunity globally in the global markets, where we are newer.

Speaker Change: We're really seeing great consumer adoption, we're seeing great brand interest, we're seeing great interest across the range of the portfolio and in our more established international markets. They are really continuing to hit their stride and I think thats what leads to a strong quarter overall for you, Eddie but really a particularly strong international quarter.

Michael McMullen: Now turning to our fiscal 2024 outlook, we now expect four year sales to increase between 8% and 10%, compared to fiscal 2023's adjusted net sales, which is up from our prior outlook up between 7% and 9% top line growth. This range continues to include a contribution of approximately 200 basis points from our Q1 acquisitions, but also includes a headwind of approximately 150 basis points from gift cards. Our expectations for the back half of the year are relatively unchanged and we expect growth to be balanced across the third and fourth quarters.

Mike Mcfarlane: Great. Thanks, and then maybe for Mike with Yeti now on track to achieve an all time high gross margin rate of 58, 5% can you provide your thoughts on the opportunity you see ahead for gross margins from here what are the puts and takes in second half gross margins that we should be mindful of and what is the sustainable long term rate for the company.

Brooke Roach: Great, thanks. And then maybe for Mike, with YETI now on track to achieve an all-time high gross margin rate of 58.5%, can you provide your thoughts on the opportunity you see ahead for gross margins from here? What are the puts and takes in second-half gross margins that we should be mindful of? And what is the sustainable long-term rate for the company?

Michael McMullen: Great, thanks. And then maybe for Mike, with YETI now on track to achieve an all-time high gross margin rate of 58.5%, can you provide your thoughts on the opportunity you see ahead for gross margins from here? What are the puts and takes in second-half gross margins that we should be mindful of? And what is the sustainable long-term rate for the company?

Mike Mcfarlane: Hey, Brett good morning. Thanks. Thanks for the question. So we were obviously really pleased with gross margins in Q2 expanded 280 basis points versus the prior year.

Michael McMullen: Hey Brooke, good morning. Thanks. Thanks for the question. So we were obviously really pleased with gross margins in Q2, which expanded 280 basis points versus the prior year, the primary driver within Q2 being inbound transportation costs. But we also saw benefits and product costs, as well. I would say for the second half, as we get into the second quarter, you'll see gross margins much more in line with the prior year, which is really consistent with what we said last quarter.

Mike McMullen: Hey Brooke, good morning. Thanks. Thanks for the question. So we were obviously really pleased with gross margins in Q2, which expanded 280 basis points versus the prior year, the primary driver in Q2 being inbound transportation costs, but we also also saw benefits and product costs, as well. I would say for the second half, as we get into the – you'll see gross margins much more in line with the prior year, which is really consistent with what we said last quarter.

Michael McMullen: We continue to take what we would call a prudently conservative approach in our demand planning for the second half of the year. We are updating several elements of our outlook as we look across channels, categories, and geographies. By channel, we now expect slightly higher performance from our wholesale channel versus D2C, given our performance in Q2 and our expectation for a continued sell-in and sell-through string in the second half of the year.

Speaker Change: The primary driver within Q2 being inbound transportation costs, but we also also so saw benefits and product costs.

Mike Mcfarlane: As well.

Speaker Change: I would say for the.

Mike Mcfarlane: For the second half as we get into the.

Mike Mcfarlane: You'll see gross margins much more in line with the prior year, which is really consistent with what we said last quarter.

Mike Mcfarlane: Yes.

Michael McMullen: But, you know, if you look at what we did in Q2, that led to our ability to take gross margins up by 50 basis points for the year from 58 to 58.5. There are a few things happening in the market that we wanted to address. There's a narrative there around transportation costs.

Mike Mcfarlane: Which but if you look at what we did in Q2 that led to our ability to take gross margins up by 50 basis points for the year from 58% to 58, 5%.

Michael McMullen: By category, we continue to expect coolers and equipment to outpace drinkware, supported by strong performance and soft coolers, recent innovation in hard coolers, and the incremental sales of mystery ranch products. Finally, we now expect international growth to approach 30 percent with domestic growth holding in the mid-single digit range. In our strong Q2 performance, we are increasing our 2024 gross margin target to approximately 58.5 percent up from our prior target of approximately 58 percent and versus 56.9 percent last year.

Mike Mcfarlane: There are a few things happening in the market that we wanted to to address it's a narrative there around transportation costs.

Michael McMullen: But even with those, we think we can manage those within our P&L, given some opportunities and other line items. And, you know, still be able to increase gross margins for the year to 58.5, which would be an increase of 160 basis points versus last year. As we go forward now, we want to be careful.

Mike Mcfarlane: But even with those we think we can we can manage those within our P&L given some opportunities in other line items.

Mike Mcfarlane: And still be able to increase gross margins for the year to 58, five which would be an increase of 160 basis points versus last year.

Michael McMullen: We're not giving guidance for 2025 here today, but we still believe we have opportunities within gross margins as we look forward. I think there are some opportunities in the sales mix. We did take the hard cooler pricing actions this year, which were in place for the majority of this year.

Mike Mcfarlane: As we go forward now we want to be careful we're not giving guidance for.

Michael McMullen: Over the last six quarters, we have realized significant benefits in gross margin from the post-pandemic drop in inbound freight rates. Given we have now come to much of the benefit from these lower freight costs, we continue to expect our second half gross margins to be approximately flat as compared to the prior year period. Also, I want to mention a relatively new dynamic in the market as it relates to inbound freight costs.

Mike Mcfarlane: For 2025 here today, but.

Mike Mcfarlane: We still believe we have opportunities within gross margins as we look forward.

Speaker Change: I think there is some some opportunities and sales mix.

Mike Mcfarlane: We did take the hard cooler pricing actions this year, which.

Michael McMullen: While most of our projected capacity is under contract, we are seeing peak season surcharges on inbound freight shipments earlier in the year than we have seen in prior years and at higher levels. However, we believe these costs will be transitory and manageable within our PNL, which is allowing us to flow through the upside in our Q2 gross margins to the full year outlook. With continued gross margin traction, we are investing a portion of these incremental gains into SGNA across a number of initiatives to support our global expansion efforts.

Mike Mcfarlane: Were in place for the majority of this year.

Michael McMullen: We think there are opportunities to optimize other line items. And I think, stepping back, we have incredibly strong gross margins, and we have more levers to pull as we go forward. Now, you could see some sensitivity to sales mix going forward, whether that be product mix, channel mix of international while the regions are building, et cetera. But we still believe we have opportunities to drive up margins over time with that sort of variable out there.

Mike Mcfarlane: There's opportunities to optimize other line items.

Mike Mcfarlane: I think stepping back we have incredibly strong gross margins and we have more levers to pull as we go forward.

Mike Mcfarlane: You could see some sensitivity to the sales mix going forward, whether that would be product mix channel mix of international while the regions are building et cetera.

Mike Mcfarlane: But we still believe we have opportunities to.

Mike Mcfarlane: Two to drive up margins over time.

Mike Mcfarlane: With that sort of variable out there and I think the other important thing is we're going to continue to manage gross margin and SG&A together to drive up operating margins over time, which is really what our priority is going to be going forward.

Michael McMullen: And I think the other important thing is that we're going to continue to manage gross margin and SG&A together to drive up operating margins over time, which is really what our priority is going to be going forward.

Michael McMullen: As a result, we now expect to grow full year SGNA slightly above a high end of our sales range with similar growth rates expected in both the third and fourth quarters. We now expect adjusted operating margin of approximately 16.5 percent at the high end of our prior outlook of between 16 and 16.5 percent and compared to 15.6 percent in fiscal 2023. Below the operating line, we expect an effective tax rate of approximately 25.2 percent for the year here, slightly above the 24.8 percent rate in 2023 and full year deluded shares outstanding of approximately 86 million, reflecting the $100 million accelerated share repurchased that was fully executed in April.

Speaker Change: Great. Thanks, so much I'll pass it on.

Brooke Roach: Great. Thanks so much. I'll pass it on.

Mike Mcfarlane: Next question in line will be coming from Morgan Alexander.

Megan Alexander: The next question on the line will be coming from Megan Alexander.

Morgan Alexander: Hey, good morning, Thanks, so much for taking our questions.

Matt Reintjes: Hey, good morning. Thanks so much for taking our questions. Maybe just to follow up on Brooke's first question there, on cooler demand, obviously some positive trends you're seeing, but can you comment on whether sell-through was positive either in the quarter or exiting the quarter? And then maybe more broadly, can you comment just on what you saw from a sell-through perspective around some of those key moments like Mother's Day and Father's Day and how that compared to maybe the lull periods in between and just how that informs your embedded expectations as we look to the back half?

Matthew Reintjes: Hey, good morning. Thanks so much for taking our questions. Maybe just to follow up on Brooke's first question there, on cooler demand, obviously some positive trends you're seeing, but can you comment on whether sell-through was positive either in the quarter or exiting the quarter? And then maybe more broadly, can you comment just on what you saw from a sell-through perspective around some of those key moments like Mother's Day and Father's Day and how that compared to maybe the lull periods in between and just how that informs your embedded expectations as we look to the back half?

Morgan Alexander: Maybe just a follow up on <unk> first question there on the cooler demand obviously, some positive trends, we're seeing but can you comment on whether sell through was positive either in the quarter or exiting the quarter and then maybe.

Speaker Change: More broadly can you comment just on what you saw from a sell through perspective around some of those key moments like mother's day and father's.

Mike Mcfarlane: Fathers day, and how that compared to maybe the lull periods in between and just how that informs your embedded expectations as we look to the back half.

Michael McMullen: And we now expect adjusted earnings per diluted share to increase 16% to 18% to between $2.61 and $2.65 compared to $2.25 in fiscal 2023. As for cash, we now expect full-year capital expenditures of between 50 million and 60 million and free cash flow of between 150 million and 200 million. Going forward, we will remain opportunistic with our capital allocation approach, balancing both M&A opportunities and the remaining $200 million share repurchased authorization.

Mike Mcfarlane: Megan Yes couple of things I'd say there.

Matt Reintjes: Megan, there are a couple of things I'd say there. We did see positive sell-through on coolers and equipment, and we mentioned that on the call. I feel great about where those products are positioned, and the assortment we have. As I said, getting our soft cooler lineup, plus our hard cooler lineup, plus the introduction of our opening price point wheeled cooler with our RODE 32, and then the introduction of our RODE 15 personal-sized opening price point cooler really is a great – was a big contributor to Q2, but also a great setup for the rest of the year.

Matthew Reintjes: Megan, you know, a couple of things I'd say there. We did see positive sell-through on coolers and equipment, and we mentioned that on the call. I feel great about where those products are positioned, and the assortment we have. As I said, getting our soft cooler lineup, plus our hard cooler lineup, plus the introduction of our opening price point, wheeled cooler with our ROTY32 and then the introduction of our ROTY15 kind of personal-sized opening price point cooler really is a great – was a big contributor to Q2, but also a great setup for the rest of the year.

Megan: We did see positive sell through in coolers and <unk>.

Speaker Change: <unk> and <unk>.

Speaker Change: To that on the call I do feel great about where those products are positioned the assortment, we have as I said getting getting our soft cooler lineup plus our hard cooler lineup plus the introduction of our opening price point wheeled cooler with our <unk> 32, and then the introduction of our.

Speaker Change: Wrote 15 kind of personal sized opening price point cooler, we really use agree was a big contributor to Q2, but also a great setup for the rest for the rest of the year.

Michael McMullen: This was another great quarter for YETI. Our execution in the first half led to strong top and bottom line performance which supported our confidence in raising our outlet for the year. Heading into the back half of the year, we will remain consistent in our focus. Driving growth through product innovation, international expansion, and our powerful omnichannel model, delivering strong earnings growth while also investing in our business to take advantage of what we believe is a tremendous opportunity in front of us in generating strong pre-cash flow which will allow us to create further value for our shareholders. Most importantly, we will remain focused on growing and strengthening the incredible YETI brand.

Matt Reintjes: As we focus on driving demand, I think, as I said, the consumer is going to be more discerning. I think higher price points are going to be in focus, and so the desirability of our product as a gift-giving item we saw continue to play out in Q2, and we would expect that that to be a big part of our Q4 performance. I think the thing that's harder for your question about the low moments and the holidays is just the cadence of how we introduce products.

Matthew Reintjes: You know, as we focus on driving demand, I think, as I said, the consumer is going to be more discerning. I think higher price points are going to be in focus. And so the desirability of our product as a gift-giving item, we saw continue to play out in Q2, and we would expect that that will be a big part of our Q4 performance. I think the thing that's harder to your question about the low moments and the holidays is just the cadence of how we introduce the product.

Speaker Change: As we focus on driving demand I think as I said I think the consumer is going to be more discerning I think higher price points are going to be in focus.

Speaker Change: And so the desirability of our products as as a gift giving item.

Speaker Change: We saw continued to play out in Q2, and we would expect that that will be a big part of our Q4 performance I think the thing that's harder to your question of the low moments and the holidays is just the cadence of how we introduce product as I said on the call. We saw strong demand for our <unk> 15, we're building.

Matt Reintjes: As I said on the call, we saw strong demand for our RODE 15. We're building supply, so we're still building into our kind of full assortment from a capacity and from an inventory perspective there. So, I think all those are opportunities. We feel good about delivering a strong 2024, and we feel good about the way we've set up the back half of the year, but we're also prepared for a range of outcomes. There are a lot of things in the market that are outside of our control, so we focus on the things we can control, which is the brand, the product, consumer demand, and really strong channels to market.

Matthew Reintjes: As I said on the call, we saw strong demand for our ROTY15. We're building supply, so we're still building into our kind of full assortment from a capacity and from an inventory perspective there. So I think all those are opportunities. You know, we feel good about delivering a strong 2024 and we feel good about the way we've set up the back half of the year, but we're also prepared for a range of outcomes. You know, there are a lot of things in the market that are outside of our control, so we focus on the things we can control, which is the brand, the product, consumer demand, and really strong channels to market.

Speaker Change: So we're still building into.

Speaker Change: Our kind of full full assortment.

Unknown Executive: Now I'd like to turn the call back over to the operator to take your questions. Thank you.

Speaker Change: From a capacity and from an inventory perspective, there. So I think all those are all those are opportunities.

Speaker Change: We feel good about it.

Unknown Executive: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt if your hand has been raised.

Speaker Change: Delivering a strong 2024, and we feel good about the way we set up the back half of the year, but we're also prepared for a range of outcomes. There's a lot of there's a lot of things in the market.

Speaker Change: Better outside of our control. So we focus on the things, we can which brands product consumer demand and really strong channels to market.

Unknown Executive: Should you wish to decline from the polling process, please press the star followed by the two. If you're using a speaker phone, please lift the hand set before pressing any key. One moment please for your first question.

Speaker Change: Got it that's really helpful and.

Matthew Reintjes: Got it. That's really helpful. And, you know, maybe the bigger picture, I guess, if you take out the gift card lap from last year, you've had two straight quarters of kind of a return to underlying double digit growth. International seems to be accelerating. So, you know, does the performance and what you're seeing give you some improved confidence that you can get back to that, you know, low double digit top line

Speaker Change: Maybe then big picture I guess, if you take out the gift gift card lap from last year, you've had two straight quarters of kind of a return to underlying double digit growth international seems to be accelerating so does.

Brooke Roach: Our first question will be coming from Brooke Roach. Good morning, and thank you so much for taking our question. Matt, you spoke in the prepared remarks about sales momentum for coolers building throughout the quarter. We've heard a lot of comments recently from a variety of sources suggesting a chopier macro backdrop. I'm hoping you can give us an update on how you're seeing current demand trends for the YETI brand in the US across each of your key categories as you head into the back to school season.

Speaker Change: The performance and what you are seeing gives you that improves confidence that you can get back to that low double digit top line algo.

Megan Alexander: You know, I think the things that you laid out are the things that we're seeing in the business, which is internationals doing what we have said we believe it would do, which is create an incredible opportunity for scaling this brand globally, that there's still strong relevance and resonance with our coolers and equipment business, and that the innovation, diversification, and reach of our drinkware portfolio continues to unlock opportunities for us. So, you know, that return to double-digit growth is, as you said, if you can take out the noise of the gift cards. That's where we are today.

Speaker Change: Well I think the things that you laid out are the things that we're seeing in the business, which is <unk>.

Speaker Change: International's doing what we have said we believed it would do which is create an incredible opportunity for scaling this brand globally.

Brooke Roach: And then if you look forward, what gives you confidence to sustain the momentum in holiday and into 2025? Thanks. Thanks for the question. Yeah, I see a few things. You know, as we look at the market, as we said around coolers, we really like what we saw in coolers in Q2 and the performance as we had both soft coolers and hard coolers falling in the market. We had introduced innovation and really gave the consumer choice and gave them choice not only across foreign factor but across price points, which I think is an important thing is we think about both the individual use and the giftable nature of our products in Q2 and importantly as we go into that queue for a gift giving season.

Speaker Change: There is still strong relevance in residents with our coolers <unk> equipment business and that the innovation diversification and reach of our drink or portfolio continues to unlock opportunity for us so that that return to double digit growth is as you said if you can take out the noise of the gift cards.

Speaker Change: Where we are today.

Megan Alexander: I think if you kind of roll through the year, that sort of plays out. And that's really our focus, how do we keep driving outsized demand for what we think is an incredible product portfolio and a growing product portfolio with a lot of consumer adoption still out there in front of us.

Speaker Change: I think if you kind of roll through roll through the year.

Speaker Change: Lays out and Thats really our focus is how do we keep driving.

Matt Reintjes: Outsized demand for what we think is an incredible product portfolio and a growing product portfolio, with a lot of consumer adoption still out there in front of us.

Speaker Change: Outsized demand for what we think is an incredible product portfolio and our growing product portfolio with a lot of consumer adoption still out there in front of us.

Brooke Roach: You know, we saw positive wholesale trends, you know, importantly our inventory. We think it's really good shape in the US market and around the world. And that we see that innovation continues to work and when you support the innovation with strong brands, strong product marketing. We really like the uptake that we're seeing. So we feel good about where the business is positioned. And recognizing that it is a choppy market. And as I said in my remarks and we said for multiple quarters, we think higher price point items are going to continue to be in focus.

Megan Alexander: Awesome. Thank you so much.

Speaker Change: Awesome. Thank you so much.

Megan Alexander: Awesome. Thank you so much.

Speaker Change: Next question is coming from Randy <unk>.

Randal Konik: The next question is coming from Randy Konik.

Randy: Yes, Thanks, a lot guys and good morning.

Randal Konik: Yeah, thanks a lot, guys. And good morning.

Randy: I guess, Matt why don't want to kind of think about and talk through is when do you go about innovation I think in the past over the years.

Speaker Change: About usage occasion.

Speaker Change: And portability.

Speaker Change: As kind of key tenants score for innovation.

Brooke Roach: So we're really trying to drive consideration and purchase over traffic. If traffic slows down, then we want to drive, we want to drive value. We want to drive engagement. We want to put products in front of consumers that they want and that's where the innovation and brand play in. I would say we're seeing that same opportunity globally in the global markets where we're newer. We're really seeing great consumer adoption. We're seeing great brand interest.

Matthew Reintjes: I guess, Matt, what I want to kind of think about and talk through is the way you go about innovation. I think in the past, over the years, we've talked about usage occasion and portability as kind of key tenets for innovation. You know, you talked on the call about the success of the French press. You talked in the press release about launching cookware later in the year. So, are you thinking more of a holistic dynamic of both, everybody thinks of YETI as outside the home around campfires and the great outdoors, but also kind of attacking inside the home as well? Maybe you could give us your thought process around the more recent innovation and then going forward, and maybe kind of elaborate on how you think about the cookware category opportunity going forward. Thanks.

Speaker Change: <unk> talked on the call about the success of the French Cross you talked in the press release.

Randy: Launching cookware.

Randy: Later in the year. So are you thinking more of it.

Matt Reintjes: I guess, Matt, what I want to kind of think about and talk through is the way you go about innovation. I think in the past, over the years, we've talked about usage occasion and portability as kind of key tenants for innovation. You know, you talked on the call about the success of the French press. You talked in the press release about launching cookware later in the year. So are you thinking more of a holistic dynamic of both, you know, everybody thinks of YETI as outside the home, around campfires and in the great outdoors, but also kind of attacking inside the home as well? Maybe kind of give us your thought process around the more recent innovation and then going forward, and maybe kind of elaborate on how you think about the cookware category opportunity going forward. Thanks.

Speaker Change: Our holistic dynamic both.

Speaker Change: Everybody thinks of Yeti is outside the home around campfires in the great outdoors, but also kind of more attacking inside the home as well maybe kind of give us your thought process around.

Speaker Change: The more recent innovation and then going forward and maybe kind of elaborate on how you think about the cookware category opportunity going forward. Thanks.

Brooke Roach: We're seeing great interest across the range of portfolio. In our more established international markets, they're really continuing to hit their stride. And I think that's what leads to a strong quarter overall for Yeti, but really a particularly strong international quarter. Great. Thanks. And then maybe from Mike, with YETI now on track to achieve an all-time high gross margin rate at 58.5%. Can you provide your thoughts on the opportunity you see ahead for gross margins from here?

Randy: Thanks, Randy Good morning, I would say a few things.

Matthew Reintjes: Thanks, Randy. Good morning. You know, I would like to say a few things.

Matt Reintjes: Thanks, Randy. Good morning. You know, I would like to say a few things.

Speaker Change: As we think about our product innovation and our product expansion.

Speaker Change: Outdoor DNA has absolutely been central to what.

Speaker Change: What we do as part of the reason, we put the level of durability performance and then ultimately design into our product and we make we make products that from a durability and performance can stand up to.

Brooke Roach: What are the putthin takes in second half gross margins that we should be mindful of? And what is the sustainable long-term rate for the company? Hey, Brooke. Good morning. Thanks for the question. So we were obviously really pleased with gross margins in Q2, expanded 280 basis points versus the prior year. The primary driver within Q2 being inbound transportation costs. But we also saw benefits in product costs as well. I would say for the second half, as we get into the, you'll see gross margins much more in line with the prior year, which is really consistent with what we said last quarter.

Matthew Reintjes: You know, as we think about our product innovation and our product expansion, outdoor DNA is absolutely central to what we do. It's part of the reason we put the level of durability, performance, and then ultimately design into our products. And we make products that, from a durability and performance point of view, can stand up to drops and knocks and being outdoors, but the design that we think is, is, is portable and transferable between inside and outside.

Speaker Change: Drops and Knox.

Speaker Change: And being outdoors, but design that we think is.

Speaker Change: Is portable and transferable between inside and outside.

Speaker Change: Funny enough the French press one of the audiences that was most demanding the French press for some of our most extreme ambassadors.

Speaker Change: Because that's how they prepared coffee around the campsite.

Speaker Change: It's a spectacular product to use in the home too and so I think that that idea of one of the things that yeti as always I believe done well from a product perspective is incredible range and versatility. So I wouldn't I wouldn't say, it's a change of strategy, it's really at.

Matthew Reintjes: Funny enough, the French press, one of the audiences that was most demanding of the French press for some of our most extreme ambassadors because that's how they prepared coffee around the campsite, but it's a spectacular product to use in the home too. And so I think that one of the things that YETI has always, I believe, done well from a product perspective is its incredible range and versatility. So I wouldn't, I wouldn't say it's a change of strategy.

Brooke Roach: Which, but, you know, if you look at what we did in Q2, that led to our ability to take gross margins up by 50 basis points for the year, from 58 to 58.5. There are a few things happening in the market that we wanted to address. It's a narrative there around transportation costs. But even with those, we think we can manage those within our P&L, given some opportunities in other line items.

Speaker Change: At the end of the day, we want to be a brand that stays with the consumer throughout their daily journey, we don't want to be a pick up and put down brand and the way you fill that in as you continue to connect these products so that we touch consumers.

Matthew Reintjes: It's really, at the end of the day; we want to be a brand that stays with a consumer throughout their daily journey. We don't want to be a pick-up and put-down brand. And the way you fill that in is you continue to connect these products so that we touch consumers at more and more moments throughout their daily life. And that could be a cup that stays with you all day, or it could be how you start your day and how you end your day.

Speaker Change: More and more moments throughout their daily life that could be a cup that stays with you all day or it could be how you start your day and how you and your day and it maybe multiple yeti products along the way.

Brooke Roach: And, you know, still be able to increase gross margins for the year to 58.5, which would be an increase of 160 basis points versus last year. As we go forward now, we want to be careful. We're not giving guidance for 2025 here today. But, you know, we still believe we have opportunities within gross margins as we look forward. There's, I think there's some opportunities in sales mix. You know, we did take the heart cooler pricing actions this year, which we're in place for the majority of this year.

Matthew Reintjes: And it may be multiple YETI products along the way. So a French press to a backpack to a cooler at night is kind of a little bit of that ecosystem around the consumer. So I think you'll always see us have an outdoor angle. The cookware does, The cast iron is a brilliant live fire, an amazing kind of campfire over a grill type product. But I think as consumers will get to see it in the home, it's a spectacular product inside the home and on the range. So I think as you think about us continuing to organically build out our product portfolio and sort of keep pushing those boundaries, I think that's sort of the ethos that we have.

Speaker Change: <unk>, a French press to a backpack to a cooler at night as kind of a.

Speaker Change: A little bit of that ecosystem around the consumer so I think you'll always see us have a have an outdoor angle. The cookware does the cast iron is a brilliant live fire.

Speaker Change: Amazing campfire over a grill type product.

Speaker Change: But I think as consumers will get to see it in the home, it's a spectacular products inside the home and on the range. So I think as you think about us continuing to.

Speaker Change: Organically build out our product portfolio and sort of keep pushing those edges.

Speaker Change: I think thats sort of the the ethos that we have.

Brooke Roach: We think there's opportunities to optimize other line items. And I think stepping back, you know, we have incredibly strong gross margins and we have more levers to pull as we go forward. Now, you could see some sensitivity to sales mix going forward, whether that be product mix, channel mix of international, while the regions are building, etc. But we still believe we have opportunities to drive up margins over time, you know, with that sort of variable out there.

Super helpful and last question.

Randal Konik: Super helpful. And last question.

Speaker Change: On international you're obviously firing away on all cylinders, but you've also kind of made some key strategic hires to lead.

Matthew Reintjes: Just on international, you're obviously firing away on all cylinders, but you've also kind of made some key strategic hires to lead those regions. Maybe talk a little bit further about those leaders, some of the teams they're looking to build out. And kind of because it feels like the international business, already strong, can kind of kick into a kind of higher gear over time. Just maybe give us some perspective there on the hires and how you think they are going to go about their strategy for building out these opportunities internationally. Thanks, guys.

Speaker Change: Those regions, maybe talk a little bit further about those leaders so no change there.

Speaker Change: Looking to build out and kind of because it feels like international already strong can kind of kick into us kind of a higher gear over time.

Speaker Change: Maybe give us some perspective, there on the hires and how you're thinking I'm going to go about their strategy I'll start with building out these opportunities internationally. Thanks guys.

Brooke Roach: And I think the other important thing is we're going to continue to manage gross margin and nationality together to drive up operating margins over time, which is really what our priority is going to be going forward. Great. Thanks so much. I'll pass it on.

Matthew Reintjes: Yeah, thanks. I think in our most established markets, Canada, and Australia, we have incredible teams with strong leaders and strong leadership teams that continue to drive the opportunity in those markets. You know, Europe in the Middle East is a newer market for us, but as we called out on the call, it's really hitting some growth inflection.

Speaker Change: Yeah I.

Speaker Change: I think in our in our most established markets, Canada, Australia, we have incredible teams with strong leaders and strong leadership teams that that continue to drive the opportunity in those markets Europe and the middle East is a newer market for us.

Megan Alexander: Next question online will be coming from Megan Alexander. Hey, good morning. Thanks so much for taking our questions. Maybe just to follow up on Brooks first question there on the cooler demand. Obviously some positive trends you're seeing, but can you comment on whether a cell through was positive either in the quarter or exiting the quarter? And then maybe more broadly, can you comment just on what you saw from a cell through perspective around some of those key moments like Mother's Day and Father's Day and how that compared to maybe the low periods in between and just how that informs your embedded expectations as we look to the back half.

Speaker Change: But as we called out on the call, it's really hitting hitting some growth inflection, we're seeing really strong consumer receptivity.

Matthew Reintjes: We're seeing really strong consumer receptivity, and we're seeing a lot of what I would call look-alike to how we saw the U.S. market, the Canadian market, and the Australian market develop. Partnerships, consumer events, signing up ambassadors, building out diverse retail and wholesale partners, and a strong DTC business. And so the addition of Martin in Europe is really to kind of continue that and to continue to scale that business and build upon the strong team that we have in Europe today.

Speaker Change: We're seeing a lot of what I would call look alike to how we saw the U S market the Canadian market in Australia market develop.

Speaker Change: Partnerships consumer events, signing up Embassador is building out diverse retail and wholesale partners, our strong DTC business and so the addition of the addition of Martin in Europe is really to kind of continue that into continue to scale that business.

Speaker Change: Build upon the strong team that we have in Europe today, but as you know well I mean Europe is many many unique markets and so how we address each of those markets was one of the things that attracted us to Martin is a lot of experience building growing scaling businesses throughout Europe.

Matthew Reintjes: But, as you know, Europe has many, many unique markets. And so how we address each of those markets was one of the things that attracted us to Martin. He has a lot of experience building, growing, and scaling businesses throughout Europe and is a great fit for YETI. As we go to, as we go to Asia, which is really underdeveloped there, we have, as we indicated in the past, we have a small partnership in Japan through a retailer, but bringing Naoji on board gave us the opportunity to really think differently, not only about the opportunity in Japan but, secondarily, about the opportunity throughout the rest of Asia.

Megan Alexander: You know, a couple of things I'd say there. We did see positive self-rule in coolers, in equipment. And we fished that on the call. I feel great about where those products are positioned, the assortment we have. As I said, getting getting our soft cooler lineup plus our hard cooler lineup plus the introduction of our opening price point, wheeled cooler, with our roadie 32. And then the end introduction of our roadie 15 kind of personal sized opening price point cooler, really is a great, what was a big contributor to Q2 but also a great setup for the rest for the rest of the year.

Matt Reintjes: And a great a great fit for you Eddie.

Eddie: As we go to as we go to Asia.

Speaker Change: Really underdeveloped there we have.

Speaker Change: Indicated in the past we have a small partnership in in Japan through through retailer.

Speaker Change: But bringing <unk> onboard gave us the opportunity to really think differently not only about the opportunity in Japan, but secondarily the opportunity throughout the rest of Asia. So I think youll see the same thing that I've talked about in Europe is going to start to build that team we're going to build are great.

Matthew Reintjes: So I think you'll see the same thing that I talked about in Europe, which is we're going to start to build that team. We're going to build our great range of partners to go to market, build up our direct piece of the business, and then build the brand through awareness, partnerships, ambassadors, event activations. And so we're really excited for the multi-year opportunity that International is for YETI.

Megan Alexander: You know, as we focus on on driving demand, I think as I said, and the consumer is going to be more discerning, I think higher price points are going to be in focus. And so the desirability of our product as a gift giving item, we saw continue to play out in Q2 and we would expect that that will be a big part of our Q4 performance. I think the thing that's harder to your question of the low moments in the holidays is just the cadence of how we introduced product.

Speaker Change: Great range of partners to go to market buildup or direct piece.

Speaker Change: Piece of the business.

Speaker Change: And then build build the brand through.

Speaker Change: Awareness partnerships ambassadors.

Speaker Change: Event Activations and so.

Speaker Change: We're really excited for the multiyear opportunity to international is for Yeti.

Speaker Change: Super helpful. Thanks, guys.

Randal Konik: Super helpful. Thanks, guys.

Brian: Thanks, Brian.

Speaker Change: Next in line will be coming from Brian Mcnamee here.

Brian McNamara: Next in line will be coming from Brian McNamara.

Megan Alexander: As I said on the call, we're still strong demand for our roadie 15, we're building supply, so we're still building into our kind of full, full assortment from a capacity and from an inventory perspective there. So I think all those are opportunities, you know, we feel good about delivering a strong 2024 and we feel good about the way we set up the back half of the year. But we're also prepared for a range of outcomes, you know, there's a lot of, there's a lot of things in the market that are outside of our control.

Madison County: Good morning, This is Madison County on for Brian Thanks for taking our question.

Madison Kellinan: Good morning, this is Madison Kellinan on for Brian. Thanks for taking your question. Would you mind commenting on the competitive dynamics you're seeing in drinkware, particularly from emerging players like Stanley and more recently, Walla? Is this simply a rising tide continuing to lift all boats, or are you seeing any competitive pressures there? Thanks.

Speaker Change: Would you mind, commenting on the competitive dynamics, you're seeing in <unk>, particularly from emerging players like Stanley and more recently a wala is this simply a rising tide containing lifts all boats or are you seeing any.

Speaker Change: Your question Sir.

Matt Reintjes: Thanks Madison for the question I would say a couple of things.

Matthew Reintjes: Thanks, Madison, for the question. I would say a couple things. When we've said this previously, I think things that bring attention to categories that we're in and bring maybe casual participants or newer participants or newer owners in that category, we think, in total, are actually good. We have immense confidence in our product portfolio, our ability to build our brand, and create desirability in our consumers. And so I think the fact that the drinkware category, in particular the hydration element of the Drinkware category, has gotten a lot of attention.

Speaker Change: When we said it previously I think things that bring attention to categories that we're in.

Megan Alexander: So we focused on the things we can, which brand products, consumer demand, and really strong channels to market. Got it, that's really helpful. And you know, maybe then big picture, I guess if you take out the gift card lap from last year, you've had two straight quarters of kind of a return to underlying double digit growth. International seems to be accelerating. So, you know, does the performance and what you're seeing give you some improved confidence that you can get back to that, you know, low double digit top line algo.

Speaker Change: And bring maybe casual participants or newer participants newer owners in that category. We think in total is actually good.

Speaker Change: And immense confidence in our product portfolio, our ability to build our brands to create desirability and our consumers and so I think the fact that the drink wear in particular hydration.

Speaker Change: Element of the drink category. He has got a lot of attention. We think is actually great.

Matthew Reintjes: We think it's actually great. It supports both the portfolio we have today and the product portfolio going forward. I would also say that between the range of consumers that we address across demographics, the range of channels we have to market both our amazing wholesale partners and our D2C business and the reach we have through the marketplaces, we think we're really well positioned to continue to capitalize on both the opportunity that's in drinkware and hydration, but also importantly, as that market gets a lot of attention, we are actually continuing to diversify our drinkware and beverage And so we like our strategy, we like where it's going, we like the growth it's delivering, we like the scale we have, and we're excited about the innovation we have coming.

Speaker Change: And supports both the portfolio, we have today and the product portfolio going forward I would also say.

Megan Alexander: Now, you know, I think the things that you laid out are the things that we're seeing in the business, which is internationals doing what we have said, we believe it would do, which is creating incredible opportunity for scaling this brand globally. That there's still strong relevance and resonance with our coolers and equipment business and that the innovation diversification and reach of our drink or portfolio. Continues to unlock opportunity for us. So, you know, that that return to double digit growth is, as you said, if you can take out the noise of the gift cards, that's where we are today.

Matt Reintjes: Between the range of consumers that we address across demographics that range of channels, we have to market both.

Speaker Change: Our amazing wholesale partners and our DTC business.

Speaker Change: The reach we have through the marketplaces, we think we're really well positioned to continue to capitalize on.

Speaker Change: Both the opportunity that's in drink Ware and hydration, but also importantly, as that market gets a lot of attention, but we are actually continuing to diversify our drink ware and drink wear and food and beverage type offerings and so we like our strategy, we like where its going we like the growth is delivering well.

Megan Alexander: I think if you kind of roll through roll through the year, that sort of plays out and and that's really our focus is how do we keep driving. We're seeing outsized demand for what we think is an incredible product portfolio and a growing product portfolio with a lot of consumer adoption still out there in front of us. Awesome. Thank you so much.

Matt Reintjes: The scale, we have and we're excited about the innovation we have coming.

Speaker Change: Great and then just a similar question on coolers.

Madison Kellinan: And then just a similar question on coolers. Ninja just debuted their cooler offering at a similar price point to the new entry-level Roadie 15. This brand has a strong history of gaining share when entering new categories. Is there any concern there regarding potential share loss? Thanks.

Speaker Change: And then just debuted at air cooler offering a similar price point to that.

Speaker Change: A new NGL already 15.

Randy Konik: Next question is coming from Randy Conan. Yeah, thanks a lot guys, and good morning. I guess Matt what I want to kind of think about and talk through is the way you go about innovation. I think in the past over the years, we've talked about East education and portability as kind of key tenants for innovation. Yeah, you've talked on the call about the success of the French press. You've talked in the press release about launching cookware.

Brian: This is Brian and I have a stronghold serious gaining Sharon hearing in your categories is there any concern there regarding potential share loss.

Matt Reintjes: Thanks, Patrick could you could you repeat the front end of that question I think I missed the who you were asking about.

Matthew Reintjes: Thanks, Madison. Could you please repeat the front end of that question? I think I missed who you were asking about.

Madison Kellinan: The Ninja, new Ninja Coolers, Shark Ninja. Okay. Okay.

Speaker Change: The Ninja.

Matt Reintjes: Nicole there secondly, yes, okay. Okay.

Matthew Reintjes: Okay, yeah, I think there are a few things we think about when we think about our strategy for coolers. The relationship between our hard coolers and our soft coolers, and then the buildup we have in hard coolers. Really, in the same philosophy I talked about earlier, we really focus on durability, performance, and design. And standing behind those 3 things. Our products need to be able to handle the kind of environments in which our products get used.

Speaker Change: I think theres, a few things as we think about our strategy and coolers.

Matt Reintjes: The relationship between our hard coolers, our soft coolers and then the buildup, we have hard coolers really and it's the same philosophy I talked about earlier, we really focus on durability performance design and standing behind those those three things our products need to be able to handle the kind of.

Randy Konik: So, are you thinking more of a holistic dynamic of both, you know, out everybody thinks of YETI is outside the home, around campfires and in the great outdoors, but also kind of more attacking inside the home as well. Maybe kind of give us your thought process around, you know, the more recent innovation and then going forward and maybe kind of elaborate on how you think about the cookware category opportunity going forward.

Randy Konik: Thanks. Thanks, Randy. Good morning. You know, I would say a few things, you know, is we think about our product innovation and our product expansion. Outdoor DNA is absolutely been central to what we do. It's part of the reason we put the level of durability, performance, and then ultimately design into our product. And we make we make products that from a durability and performance can stand up to drops and knocks and being outdoors.

Speaker Change: Environments in which.

Matthew Reintjes: And so I think when you, you know, look at the market, largely, that is a market that we have sustained and really established a leadership position in, and we continue to do that. Through time, we've seen products come onto the market at various price points with maybe a different consumer value proposition around some of those items or around some of those features. I think for us, it's continuing to do what YETI does, which is put a great product in front of consumers, continue to drive that desirability, and continue to drive that demand. And I think Q2 showed what's possible and what happens when we do that. Great, thanks.

Matt Reintjes: Our products get used and so I think when you.

Speaker Change: Look at the market.

Speaker Change: Largely that is a market that we have.

Speaker Change: Sustained and really established the leadership position and we continue to do that.

Speaker Change: Through time, we've seen.

Speaker Change: Products come onto the market at various price points with with maybe a different consumer value prop around around some of those those items are around some of those features.

Speaker Change: I think for us its continuing to do what yet he does which is put great products in front of consumers continue to drive that desirability.

Speaker Change: Can you drive that demand and I think Q2 showed.

Randy Konik: But design that we think is is is portable and transferable between inside and outside. Funny enough, the French press, one of the audiences that was most demanding the French press for some of our most extreme ambassadors because that's how they prepared coffee around campsite. But it's a spectacular product to use in the home too. And so I think that that idea of one of the things that YETI has always believed done well from a product perspective is incredible range and versatility.

Speaker Change: Sure what's possible and what we what happens when we do that.

Speaker Change: Great. Thanks, so much.

Madison Kellinan: Great, thanks so much.

Speaker Change: Next question will be coming from Alex Perry.

Alex Perry: The next question will be coming from Alex Perry.

Speaker Change: Hi, Thanks for taking my questions here.

Alex Perry: Hi, thanks for taking my questions here. Just on the NFL license for drinkware, how significant do you think this could be? Can you give us any case studies on when you rolled out other professional leagues in terms of the sales uplift that you saw? And just sort of remind us about the timing of the NFL license rollout thing.

Speaker Change: On the NFL licensed future inquiries, how significant do you think this could be.

Speaker Change: Can you give us any case studies and when you rolled out other professional leagues in terms of sales uplift that you saw and just sort of remind us on the timing of the <unk>.

Randy Konik: So I wouldn't I wouldn't say it's a change of strategy. It's really at the end of the day, we want to be a brand stays with a consumer throughout their daily journey. We don't want to be a pickup and put down brand. And the way you fill that in is you continue to connect these products so that we touch consumers at more and more moments throughout their daily life. And that could be a cup of stays with you all day, or it could be how you start your day and how you end your day.

Randy Konik: And it may be multiple YETI products along the way. So a French press to a backpack to a cooler at night is kind of a little bit of that ecosystem around the consumer. So I think you'll always see us have an outdoor angle the cookware does the cast iron is a brilliant live fire amazing kind of campfire over a grill type product. But I think as consumers will get to see it in the home, it's a spectacular product inside the home and on the range.

Speaker Change: <unk> license rollout thanks.

Matt Reintjes: Yeah, Hi, Alex Thanks for the question.

Matthew Reintjes: Yeah, hi Alex. Thanks for the question.

Speaker Change: We won't kind of havent gotten into quantifying.

Alex Perry: You know, we won't and kind of haven't gotten into quantifying the magnitude of the various partnerships that we have; what we do know well is the way to execute those most effectively, so that you ultimately get consumers what they want, but also that you build broad relationships that are more than just a licensing deal. I think that's one of the hallmarks of getting this umbrella NFL deal done, and then the specific deal with the Dallas Cowboys gives us a chance to continue to kind of broaden and deepen that relationship.

Speaker Change: The magnitude of the various partnerships that we have.

Speaker Change: What we do know well is the way to execute those most effectively so that you get ultimately get to consumers what they want but also that you build.

Speaker Change: Broad relationships that are more than just more than just a licensing deal and I think thats one of the hallmarks of of getting this umbrella NFL deal done and then the specific deal with the Cowboys the Dallas Cowboys gives.

Matt Reintjes: Gives us a chance to continue to kind of broaden and deepen that relationship.

Speaker Change: We think we think these are important and they are important to do a variety of them because you reach consumers that have different.

Randy Konik: So I think as you think about us continuing to organically build out our product portfolio and sort of keep pushing those edges, you know, I think that's sort of the ethos that we have. Super helpful last question.

Speaker Change: Passions different needs they love us they love.

Alex Perry: We think these are important, and it's important to do a variety of them because you reach consumers that have different needs, passions, different needs. They love the Cowboys, and they love the YETI brand. They love the Kansas City Chiefs, and they love the YETI brand. I think all those things are kind of why we like these types of relationships. You know, I would expect, like all of our partnerships, that it would contribute to the business and be a driver of performance.

Speaker Change: The Cowboys and they loved the Yeti brand they love the Kansas City Chiefs and they loved the Yeti brand I think all of those things are.

Speaker Change: It's kind of why we like why we like these these types of relationships.

Randy Konik: Just on international you're obviously firing an away and also there's. But you've also kind of made some key strategic hires to lead those regions, maybe talk a little bit further about those leaders. Some of the teams they're looking to build out and kind of because it feels like international already strong can kind of kick into a kind of a higher gear over time.

Speaker Change: I would expect.

Speaker Change: Like all of our partnerships that it's two to contribute to the business and be a be a driver of performance, but the quantification is it's really the stack up of all of these things that gives us the range and and the opportunity to address more consumers and more buying occasions and back to my.

Alex Perry: But the quantification is, it's really the stack up of all these things that gives us the range and the opportunity to address more consumers and more buying occasions. And back to my comment earlier, kind of be part of their lives. And that's why we liked, ultimately liked the NFL. Obviously, the NFL is the best.

Randy Konik: Just maybe give us some perspective there on your the hires and how you think they're going to go about their strategy for the building out these opportunities international. Thank you. Yeah, thanks. I think in our most established markets, Canada, Australia, we have incredible teams with strong leaders and strong leadership teams that continue to drive the opportunity in those markets. You know, Europe is in the Middle East is a newer market for us, but as we call it out on the call, it's really hitting some growth inflection.

Matthew Reintjes: I mean, it's got a huge, huge following. It has a growing global following. They're now playing games, as you know, all over the world. So all those create opportunities for us that fit within our overall strategy of continuing to build this global brand.

Speaker Change: Comment earlier kind of be part of their life and that's why we like ultimately like the NFL, obviously the NFL the NFL has.

Speaker Change: It's a huge huge followership it is a growing global followership.

Speaker Change: They are now playing games as you know all over the world. So all of those create opportunities for us that fits within our overall strategy of continuing to build this global brand.

Speaker Change: Incredibly helpful. And then just my follow up is can you just provide any commentary on.

Alex Perry: And then just my follow-up question is, can you just provide any commentary on the sort of Amazon Prime Day in July, maybe versus last year, and do you plan to participate in any more Prime events as you move through the year?

Randy Konik: We're seeing really strong consumer receptivity. And we're seeing a lot of what I would call look alike to how we saw the US market, the Canadian marketing, Australian market, develop partnerships, consumer events, signing up ambassadors, building out diverse retail and wholesale partners, strong DCC business. And so the addition of the addition of Martin in Europe is really to kind of continue that and to continue to scale that business and build upon the strong team that we have in Europe today.

Speaker Change: Sort of Amazon Prime day in July maybe versus last year, and you plan to participate in anymore private events as you move through the year. Thanks.

Matt Reintjes: Hey, Alex it's Mike. Thanks for the question, so don't want to get into.

Michael McMullen: Hey Alex, it's Mike. Thanks for the question. So I don't want to, you know, get into current quarter commentary too deeply. But, you know, obviously, in our remarks, we talked about Amazon having a good Q2. It's had, you know, several quarters in a row of good performance, and I feel like Amazon provides a lot of reach for us, allows us to reach new consumers that prefer to shop on Amazon. I would say we've been pretty consistent in how we approach promotional periods.

Speaker Change: Current quarter common.

Speaker Change: Commentary too deeply but obviously in.

Speaker Change: In our remarks, we talked about Amazon had a good Q2, it's had several quarters in a row of good performance.

Randy Konik: But as you know, well, I mean, Europe is many, many unique markets. And so how we address each of those markets was one of the things that attracted us to Martin is a lot of experience building, growing, scaling businesses throughout Europe and a great fit for YETI. As we go to, as we go to Asia, really underdeveloped there. We have, we've indicated in the past, we have a small partnership in Japan through retailer.

Speaker Change: Feel like Amazon provides a lot of reach for us allows us to reach new consumers that prefer to shop on Amazon.

Matt Reintjes: I would say.

Matt Reintjes: We've been pretty consistent in how we.

Speaker Change: Approach promotional periods.

Michael McMullen: The types of products are typically a way for us to sort of build demand in a moment with colors that have been from prior seasons or first-generation products that we've moved to new generations, so nothing's really changed there. And then, in terms of the future, we'll have to see how the year goes. Again, we don't want to get too deep in our commentary on that.

Speaker Change: The types of products is typically a way for us to sort of build demand in a moment with with colors that with colors that are that have a.

Speaker Change: From prior seasons or or first generation products that we've moved to a new generation. So.

Randy Konik: But bringing NeoGeon board gave us the opportunity to really think differently not only about the opportunity in Japan, but secondarily the opportunity throughout the rest of Asia. So I think you'll see the same thing that I talked about in Europe is we're going to start to build that team. We're going to build our great range of partners to go to market build up our direct piece of business and then build build the brand through awareness partnerships ambassadors event activations. And so we're really excited for the multi year opportunity that international is for YETI. Super helpful.

Speaker Change: Nothing has really changed there.

Speaker Change: And then in terms of the future will have to see how the year goes again don't want to get too deep in our commentary on.

Randy Konik: Thanks, guys. Thanks very much.

Michael McMullen: How we're seeing demand in Q3 or the rest of the year, we're just, or the second half of the year, we're focused on hitting the outlook that we provided today, which we raised, obviously, and we feel really good about. Perfect. Incredibly helpful. Best of luck going forward.

Speaker Change: Now, we're seeing demand in Q3 or the rest half of the year, where just our the second half of the year, we're focused on hitting the outlook that we provided today, which.

Speaker Change: We raised obviously and we feel really good about.

Speaker Change: Perfect incredibly helpful Best of luck going forward.

Alex Perry: Thanks, Alex.

Speaker Change: Next in line will be coming from Peter Benedict.

Peter Benedict: Next in line will be coming from Peter Benedict.

Peter Benedict: Hey, good morning, guys. Thanks. Thanks for taking the question. Congratulations on that NFL deal. I must say, though, it does pain me to see the Dallas Cowboys partnership.

Speaker Change: Hi, Good morning, guys. Thanks, Thanks for taking the question.

Brian McNamara: Next in line will be coming from Brian McNamere.

Speaker Change: Congratulations on that NFL deal I must say, though it does pain me to see the Dallas Cowboy partnership I guess I understand it but.

Matt Reintjes: Congratulations on that NFL deal, I must say, though it does pain me to see the Dallas Cowboy Partnership. I guess I can understand it.

Madison Carolyn: Good morning. This is Madison, Carolyn on for Brian. Thanks for taking your question. Would you mind commenting on the competitive benefits you're seeing in drinkware, particularly from emerging players like Stanley and more recently Walla. Is this simply a rising tide containing the list of all boats or are you seeing any competitive pressures there? Thanks. Thanks Madison for the question. I would say a couple things. When we said this previously, I think things that bring attention to categories that were in and bring maybe casual participants or newer participants or newer owners in that category.

Speaker Change: One hertz.

Matthew Reintjes: I guess I understand it, but that one hurts. Thinking about the evolving macro, I'm kind of curious how you could alter your marketing approach in the back half of the year if things do get tougher, maybe than you anticipate them. Do you just message differently? Do you adjust the promotional cadence? It looks like the innovation price points are coming in at, I think, relatively attractive within your range. So I'd be curious how you would maybe pivot the business in the event that things are on the tougher side. That's my first question.

Speaker Change: Thinking about the <unk>.

Speaker Change: Evolving macro.

Speaker Change: Kind of curious how high you could alter your marketing approach in the back half of the year, if things do get tougher maybe than you envision them.

Speaker Change: Message differently do you.

Speaker Change: Or just the promotional cadence.

Speaker Change: It looks like the the innovation price points are coming in at I think relatively attractive within your within your range.

Speaker Change: So just kind of curious how you would maybe pivot the business in the event that things are on the tougher side. That's my first question.

Madison Carolyn: We think in total is actually good. We have a immense confidence in our product portfolio, our ability to build our brand to create desire ability in our consumers. And so I think the fact that the drinkware in particular hydration element of the drinkware category has got a lot of attention. We think is actually great in supports both the portfolio we have today and the product portfolio going forward. I would also say between the range of consumers that we address across demographics.

Matt Reintjes: Good morning, Peter and thanks for that.

Matthew Reintjes: Good morning, Peter, and thanks for that. You'll note I mentioned the Kansas City Chiefs just as I had to put my own balance back into that equation. So I appreciate your concern for the NFL license. What I would say on the macro level is that we have a lot of practice when there is disruption. How do we change our marketing to make sure we stay in front of the consumer? And that, you know, whether that was kind of the March 2020 period and disruption that created, and we had to shift our marketing away from some strategies that were more Active in person engaged and became more digital in nature. I think, and I say that because one of the benefits of having built.

Matt Reintjes: Youll note I mentioned, the Kansas City Chiefs, just as a.

Speaker Change: Medicare put my own my imbalance back to that equation. So I appreciate your concern for the for the NFL license.

Speaker Change: What I would say on that.

Speaker Change: The macro.

Speaker Change: This is we have a lot of practice at when there is disruption how do we change our marketing to make sure we stay in front of the consumer.

Speaker Change: Whether that was kind of the March 2020 period, and disruption that created and we had to shift our marketing.

Madison Carolyn: The range of channels we have to market both our amazing wholesale partners and our D to C business in the reach we have through the marketplaces. We think we're really well positioned to continue to capitalize on both the opportunity that's in drinkware and hydration, but also importantly as that market gets a lot of attention. We are actually continued to diversify our drinkware and drinkware and food and beverage type offerings. And so we like our strategy. We like where it's going. We like the growth it's delivering. We like the scale we have and we're excited about the innovation we have coming.

Speaker Change: Way from some some strategies that will more act.

Madison Carolyn: Great.

Matt Reintjes: They were active in person, engaged, and became more digital in nature. I think, and I say that because one of the benefits of having built what I believe is the best kind of in-house marketing, creative, talent, and content team out there is that they can pivot really quickly and address a changing consumer dynamic. So if the world were to get rocky in the back half of the year and it became a battle for consumer attention and demand, I think performance marketing comes into play, how we balance brand spend versus product spend, and how we position different parts of our portfolio in front of the consumer, depending upon what the appetite is.

Speaker Change: Active in person engaged and became more digital in nature I think.

Matt Reintjes: And I say that because one of the benefits of having built.

Matthew Reintjes: What I believe is the best kind of in-house marketing, creative, and talent content team out there is that they can pivot really quickly and address a change in consumer dynamics. So, if the world were to get rocky in the back half of the year, and it became a battle for consumer attention and demand, I think performance marketing comes into play. How we balance brand spend versus product spend, and how we position different parts of our portfolio in front of the consumer, depending upon what the appetite is.

Matt Reintjes: What I believe is the best kind of in house marketing creative talent content team out there is that they can pivot really quickly and address changing consumer dynamics.

Speaker Change: If the World War, II, where to get Rocky in the back half of the year.

Matt Reintjes: And it became a battle floor for consumer attention and demand I think performance marketing comes into play.

Madison Carolyn: And then just have a similar question on coolers. Mrs. Just debuted at their cooler offering a similar price point to the new entry-level Rody 15. This point has a strong history of gaining share when entering new categories. Is there any concern there regarding potential share loss? Thanks. Thanks, Madison. Could you repeat the front into that question? I think I amiss the who you were asking about. The Ninja Coolers. Okay. Yeah. You know, I think there's a few things.

Matt Reintjes: How we balanced brand spend versus product spend how.

Matt Reintjes: How we position different parts of our portfolio in front of the consumer depending upon what's what the appetite is.

Matthew Reintjes: I think the other thing is how we lean into those gifting times of the year. At the end of the day, our product portfolio from a gifting perspective has really approachable price points, and they're also highly desired. And so you get that great combination between them. 30 or 35 dollar drinks where, or 200 or 250 or 300 dollar coolers, but you get an incredible outsized value for that for that gift on the recipient side.

Matt Reintjes: The other thing is how we lean into those gifting times a year.

Matt Reintjes: I think the other thing is how we lean into those gifting times of the year. At the end of the day, our product portfolio from a gifting perspective has really approachable price points, and they're also highly desired. And so you get that great combination between $30 or $35 drinkware or $200 or $250 or $300 cooler, but you get an incredible outsized value for that gift on the recipient side. And so all those dynamics we can play into, but we're also playing a long game, which is we want to continue to invest in this business and in this brand.

Matt Reintjes: At the end of the day, our product portfolio from a gifting perspective.

Matt Reintjes: Really approachable price points and they're also highly desired and so you get that great combination between.

Matt Reintjes: At 30, or $35 drink wear or 200, or 250 or $300 cooler, but you get an incredible outsized.

Madison Carolyn: Is we think about our strategy in coolers. The relationship between our hard coolers and soft coolers and then the build-up we have in hard coolers. Really, and it's the same philosophy I talked about earlier. We really focus on durability, performance, design and standing behind those three things. Our products need to be able to handle the kind of environments in which our products are used. And so I think when you look at the market, largely that is a market that we have sustained and really established the leadership position.

Matt Reintjes: Value for that for that gift on the recipient side and so all of those dynamics, we can play into but we're also playing a long game, which is we want to continue to invest in this business and this brand we want to continue to grow.

Peter Benedict: So, all those dynamics we can play into, but we're also playing a long game, which is we want to continue to invest in this business and this brand. We want to continue to grow awareness beyond beyond the moment in time. So, I think what you would see us do is really look at balancing the momentary, more traffic-driven activities with the support for the brand over the long term.

Matt Reintjes: We want to continue to grow awareness beyond the moment in time. So I think what you would see us do is really look at balancing the momentary, more traffic-driven activities with the support of the brand over the long term.

Matt Reintjes: <unk>.

Matt Reintjes: Beyond beyond the moment in time, so I think what you would see US do is really look at balancing.

Speaker Change: The <unk>.

Speaker Change: <unk> Terry more traffic more transactional driven activities with the support the brand over the long term.

Speaker Change: No that makes sense. Thanks for that Matt and then I guess the next question just is around.

Matthew Reintjes: That makes sense. Thanks for that, Matt.

Madison Carolyn: And then we continue to do that. You know, through time we've seen products come onto the market at various price points with maybe a different consumer value prop around some of those items or around some of those features. You know, I think for us it's continuing to do what Yeti does, which is put great product in front of consumers, continue to drive that desire ability, continue to drive that demand. And I think Q2 showed what's possible and what happens when we do that.

Peter Benedict: My next question is just around kind of innovation, the new products that are coming out. You mentioned the cookware. It sounds like the price points there are maybe a little below where maybe that legacy product was. I can't recall exactly, but I'm more curious about the bags.

Speaker Change: Kind of the innovation the new products are coming out you mentioned the cookware it sounds like the price points there.

Speaker Change: A little below where maybe that legacy product was I cant recall exactly but.

Speaker Change: I'm more curious around the bags.

Matthew Reintjes: I'm not sure how much I'll be willing to share, but just how are you thinking about that BAG portfolio expansion, portfolio expansion in the first part of next year, whether in terms of

Speaker Change: Launch for 2025, I'm not sure how much would be willing to share, but just how are you thinking about that bag portfolio expansion portfolio expansion.

Speaker Change: In the first part of next year, whether in terms of the range of product or where the price point is going to fall relative to what you currently have out there just kind of curious what else you're willing to share there. Thank you.

Madison Carolyn: Great, thanks so much.

Matthew Reintjes: A major product, or where the price point is going to fall, Rolex. [inaudible]

Matthew Reintjes: Thank you.

Alexander Perry: Next question will be coming from Alex Perry. Hi, thanks for taking my questions here. Just on the NFL license for drinkware, how significant do you think this could be?

Peter Benedict: Yeah, thanks, Peter. And as you mentioned, the cookware we're excited about is at a slightly different price point than the legacy product. As we introduced that, we actually moved that price point down as we worked with our suppliers to not only drive some what we think are some incredible improvements to what was already the best cookware on the market or the best cast iron on the market, but also get it to a place that we thought was a really great kind of fit within the pricing strategy and the pricing ladder at YETI.

Peter: Yes, Thanks Peter.

Speaker Change: As you mentioned the cookware. We're excited about it is it has a slightly different price point.

Matt Reintjes: And then the legacy product as.

Matt Reintjes: As we brought that we actually move that price point down as we work towards.

Alexander Perry: Can you give us any case studies and when you roll out other professional leads in terms of sales uplift that you saw and just sort of remind us on the timing of the NFL license rollout? Thanks. Hi Alex, thanks for the question. You know, we won't get a haven't gotten into quantifying the magnitude of the various partnerships that we have. What we do know well is the way to execute those most effectively so that you get ultimately get to consumers what they want, but also that you build broad relationships that are more than just a more than just a licensing deal.

Speaker Change: Our suppliers to not only drive some what we think are some incredible improvements to what was already the <unk>.

Speaker Change: <unk> on the market or the best cast aren't on the market.

Speaker Change: But also get it to get it to a place that we thought was a really.

Speaker Change: Really great kind of fit within the pricing strategy and the pricing ladder at Yeti thing about bags, we havent discussed.

Peter Benedict: The thing about bags, we haven't discussed the range and what's coming. What I would say is we're going to build on this, and we believe in the opportunity in every day. We believe in the opportunity for active outdoor. We believe in the opportunity for travel and adventure. And so I think as you watch us over time, what you're going to see is this melding of YETI plus the acquired designs and talent that we now have within the business, we're going to continue to expand that product portfolio, which will then allow us to address a wide range of price points.

Matt Reintjes: The range and what's coming what I would say is.

Speaker Change: We're going to build into this and we believe in the opportunity in every day, we believe in the opportunity inactive outdoor we believe in the opportunity in <unk> and.

Matt Reintjes: and travel and have an adventure. And so I think as you watch us over time, what you're going to see is this melding of YETI plus the acquired designs and talent that we now have within the business, we're going to continue to expand that product portfolio, which will then allow us to address a wide range of price points, but always with that idea that there is a durability and performance aspect to what we do.

Matt Reintjes: In travel and adventure and so I think as you as you watch us over time.

Alexander Perry: And I think that's one of the hallmarks of getting this umbrella NFL deal done. And then the specific deal with the Cowboys, the Dallas Cowboys gives us a chance to continue to kind of broaden and deepen that that relationship. You know, we think we think these are important in their important to do a variety of them because you reach consumers that have different passions, different needs. They love the Cowboys and they love the Yeti brand.

Matt Reintjes: What youre going to see is this melding of of Yeti plus plus.

Matt Reintjes: Plus the the acquired designs and talent that we now have within the business that we're going to continue to expand that product portfolio, which will then allow us to address a wide range of price points.

Peter Benedict: But always with that idea that there is a durability and performance aspect to what we do. And I think the idea that we're not going to go down market and have something that doesn't sort of represent YETI. But I think the breadth and the different use cases and environments we're going to address are really exciting, not just domestically but globally.

Matt Reintjes: But always with the idea that there is a durability and performance aspect to what we do and I think that idea that we're not going to go down market.

Matt Reintjes: And I think the idea that we're not going to go down market and have something that doesn't represent YETI, but I think the breadth and the different use cases and environments we're going to address are really exciting, not just domestically but globally.

Alexander Perry: They love the Kansas City Chiefs and they love the Yeti brand. I think all those things are it's kind of why we like these types of relationships. You know, I would expect like all of our partnerships that it to contribute to the business and be a driver of performance but the quantification is it's really the stack up of all these things that gives us the range and the opportunity to address more consumers and more buying occasions.

Matt Reintjes: And have something that doesn't sort of represents represent yeti, but I think the breadth and the different use cases in environments, where can address.

Matt Reintjes: When it gets really exciting not just not just domestically but globally.

Joe: All right. Sounds good. Good luck. Thanks very much.

Matthew Reintjes: All right, sounds good. Good luck. Thanks very much.

Speaker Change: Alright, it sounds good good luck, thanks very much.

Joe: And that's in line will be coming from Joe also Paolo.

Peter Benedict: And next in line will be coming from Joe Altobello.

Speaker Change: Thanks, Hey, guys. Good morning, I. Appreciate the question. So I guess first question for you, Matt you sound a lot different than you did six months ago.

Joseph Altobello: Thanks. Hey guys, good morning.

Alexander Perry: And back to my comment earlier, kind of be part of their life. And that's why we like ultimately like the NFL. Obviously the NFL is the NFL. I mean, it is a huge as huge fellowship. It has a growing global fellowship. They're now playing games as you know all over the world. So all those create opportunities for us that fits within our overall strategy of continuing to build this global brand. Incredibly helpful.

Speaker Change: With respect to cooler demand.

Speaker Change: Demand across price points I, just wanted to clarify you did not see any meaningful trade down.

Joseph Altobello: I appreciate the question. So I guess the first question for you, Matt, is: you sound a lot different than you did six months ago with respect to cooler demand and demand across price points. I just wanted to clarify that you did not see any meaningful trade down in the cooler segment. And maybe you could tease out what the impact of price and mix was on C&E revenue in the quarter.

Speaker Change: In the quarter in the core segment and maybe if you could tease out what the impact of price and mix was in C&I.

Speaker Change: Revenue in the quarter.

Alexander Perry: And then just my follow-up is, can you just provide any commentary on the sort of Amazon Prime Day in July, maybe versus last year? And you plan to participate in any more, you know, prime events as you move through the year? Thanks. Hey, Alex, it's Mike. Thanks for the question. So don't want to, you know, get into current quarter commentary too deeply. But, you know, obviously in our remarks, we talked about Amazon.

Matthew Reintjes: Yeah, Joe, thanks. Thanks for the question.

Joe: Yes, Joe Thanks for the question.

Matt Reintjes: Yeah, Joe, thanks. Thanks for the question.

Matt Reintjes: Ill.

Matthew Reintjes: And I'll hopefully address, I think what you're getting at. I am, you know, if you took sentiment today versus sentiment six months ago, it was really the difference between having our soft coolers fully stocked back in the market and what I knew was coming and what we indicated was coming in terms of innovation in our hard coolers, and really the idea that we were pretty bullish on what was coming out. But I think at that time, there was a lot of them, and there are a lot more.

Joe: Hopefully address I think what you're getting at.

Speaker Change: If you if you took sentiment today versus sentiment six months ago. It was really the difference between having.

Speaker Change: Our soft coolers fully assorted back in the market.

Matt Reintjes: Or what I knew was coming and what we indicated was coming in innovation and our hard coolers and really the idea that.

Alexander Perry: I had a good Q2. It's had, you know, several quarters in a row of good performance, you know, feel like Amazon provides a lot of reach for us, allows us to reach new consumers that prefer to shop on Amazon. You know, I would say we've been pretty consistent in how we approach promotional periods. You know, the types of products is typically a way for us to sort of build demand in a moment with colors that, with colors that are, that have from prior seasons or first generation products that we've moved to new generations.

Joe: We were we were pretty bullish on what was coming out.

Speaker Change: But I think at that time, there was a lot of there's a lot more.

Matthew Reintjes: Price point sensitivity, which we've seen some of that continue to play out, but also, we weren't fully sorted in the market in the way that we wanted. And so I think the, you know, the trade down question. I don't know if it's trade down as much as it is we put products out in front of consumers at. And, you know, we were excited, as we said, we're excited to get back to the $200 entry price point and hard coolers.

Speaker Change: Price point sensitivity, which we've seen some of that continue to play forward, but also we werent fully assorted in the market and the way in which we wanted.

Speaker Change: And so I think the.

Joe: The trade down question.

Speaker Change: I don't know if it's trade down as much as it is we put products out in front of consumers at.

Joe: Sizes functionality at price points that met what their needs were and we were excited as we said we are excited to get back to the $200.

Alexander Perry: So nothing's really changed there. And then, you know, in terms of the future, we'll have to see how the year goes. Again, don't want to get too deep in our commentary on how we're seeing demanding Q3 or the rest half of the year. We're just the second half of the year. We're focused on hitting the outlook that we provided today, which we raised obviously, and we feel really good about. Perfect, incredibly helpful. That's it. Thank you.

Speaker Change: <unk> price point in hard coolers, it's a place we had been in the past for a long time, it's been a successful price point.

Matt Reintjes: For us and I think it's a successful price point, because it matches our size or personal use.

Matt Reintjes: And I'll For us, and I think it's a successful price point because it matches a size, a personal use, and a carry ease that works really well in the market. And then building on the success we had with our wheeled coolers and bringing something that we think had a better form factor and fit at a different price point was a really attractive thing to do. So, I think any change in the last six months has really made me feel great about the lineup we have, feel great about the innovation, and forward innovation over the coming years that we have in those categories. And that's in a backdrop where we think the consumer's going to be discerning, and we're going to have to drive interest in and demand for our brand. And that's something I think we do well.

Matthew Reintjes: It's a place we have been in the past for a long time. It's been a successful price point. For us, and I think it's a successful price point because it matches a size, a personal use, and a carry ease that works really well in the market, and then building on the success we had with our wheeled coolers and bringing something that we think had a better form factor and fit at a different price point was a really attractive thing to do.

Matt Reintjes: Our carry ease that works really well in the market and then getting building on the success, we had in our wheeled coolers and bringing something that we think had a better a better form factor and fit.

Matt Reintjes: At a different price point was it was a really attractive thing to do so I think any change in the last six months is really.

Matthew Reintjes: So, I think any change in the last six months has really made me feel great about the lineup we have, feel great about the innovation, and forward innovation over the coming years that we have in those categories. And that's against a backdrop where we think the consumer is going to be discerning, and we're going to have to drive interest in and demand for our brand, and that's something I think we do well.

Peter Benedict: Next in line will be coming from Peter Benedict. Good morning, guys. Thanks. Thanks for taking the question. Congratulations on that NFL deal. I must say though, it does pain me to see the Dallas Cowboy partnership. I guess I understand it, but that one hurts.

Greg: Feel great about the lineup we have for Greg about the innovation.

Matt Reintjes: Forward innovation over the coming years that we have in those categories.

Matt Reintjes: And in that in a backdrop, where we think the consumer's going to be discerning and we're going to have to drive interest in and demand for for our brand and that's that's something I think we do well.

Peter Benedict: Thinking about the evolving macro, I'm kind of curious how you could alter your marketing approach in the back half of the year, if things do get tougher, maybe then you envision them. You just message differently. Do you adjust the promotional cadence? It looks like the innovation price points are coming in at, I think, relatively attractive within your range. I just kind of curious how you would maybe pivot the business and the event that things are on the tougher side.

Joseph Altobello: Got it. Very helpful. Maybe just to follow up on that, you mentioned cautious corporate spending. Can you elaborate on that a little bit, and how did the corporate channel do this quarter?

Speaker Change: Got it very helpful. Maybe just to follow up on that you can make some cautious corporate spending you elaborate on that a little bit and how did the corporate channel.

Matt Reintjes: This quarter.

Matt Reintjes: Okay.

Mike McMullen: Hey, Joe it's Mike so.

Michael McMullen: Hey Joe, it's Mike. So yeah, as we talked about the comments, we saw growth across all of our D2C channels, corporate sales included. You know, a few things we'd call out. One, this has really been, to date, a heavily US business, as we just didn't have the customization capabilities outside the US that you need to really grow and expand that business. But we're starting to see some momentum outside the US within corporate sales.

Mike McMullen: Yeah, as we talked about the remarks, we saw growth across all of our D2C channels, corporate sales included. You know, a few things we'd call out. One, this has really been, to date, a heavily US business, as we just didn't have the customization capabilities outside the US that you need to really grow and expand that business. But we're starting to see some momentum outside the US within corporate sales. The second thing, on the U.S. side, we were pleased with the overall order volume growth that we saw in the quarter.

Speaker Change: Yes, as we talked about the remarks, we saw growth across all of our DTC channels corporate sales included.

Mike McMullen: A few things we'd call out one this has really been to date heavily U S.

Mike McMullen: Business as we just didn't have the customization capabilities outside the U S that you need to really grow and expand that business.

Peter Benedict: That's my first question. Good morning, Peter. And thanks for that. You'll know that I mentioned the Kansas City Chiefs just as a head to put my own bounce back to that equation. So I appreciate your concern for the NFL license. What I would say on the macro, you know, this is we have a lot of practice at when there is disruption. How do we change our marketing to make sure we stay in further consumer?

Mike McMullen: But we're starting to see some momentum outside the U S within corporate sales.

Michael McMullen: The second thing, on the U.S. side, we were pleased with the overall order volume growth that we saw in the quarter. We did see some more cautious order values, but we're going to continue to try to manage that to drive overall growth, both in the U.S. and outside the U.S., and we really believe that as we launch custom capabilities in Canada, in Australia, and then eventually in Europe, the corporate sales business can be a part of the overall growth story outside the United States. I got it.

Mike McMullen: The second thing on the U S side.

Mike McMullen: We were pleased with the overall order volume growth that we saw in the quarter, we did see some more cautious order values.

Peter Benedict: And that, you know, whether that was kind of the March 2020 period and disruption that created and we had to shift our marketing away from some strategies that were more active and person engaged and became more digital in nature. I think, and I say that because one of the benefits of having built what I believe is the best kind of in-house marketing creative content team out there is that they can pivot really quickly and address a change of consumer dynamic.

Mike McMullen: We did see some more cautious order values, but we're going to continue to try to manage that to drive overall growth, both in the U.S. and outside the U.S., and we really believe that as we launch custom capabilities in Canada, in Australia, and then eventually in Europe, that corporate sales business can be a part of the overall growth story outside the United States.

Mike McMullen: But we're going to continue to try to manage that to drive overall.

Mike McMullen: Overall growth both in the U S and outside the U S and we really believe that.

Mike McMullen: As we launch custom capabilities in Canada, and Australia, and eventually Europe.

Mike McMullen: Debt.

Mike McMullen: That corporate sales business can be a part of the overall growth story outside the United States.

Speaker Change: Got it very helpful. Thank you.

Mike McMullen: Yeah.

Mike McMullen: Our final question will be coming from Jim Duffy.

Joseph Altobello: Our final question will be coming from Jim Duffy. Oh, thank you. Thanks for taking my question.

Operator: Our final question will be coming from Jim Duffy. Oh, thank you. Thanks for taking my question. I know the call's gone.

Jim Duffy: Hello. Thank you. Thanks for taking my question I know the call's gone long hope you're doing well Matt Mike.

Jim Duffy: Our final question will be coming from Jim Duffy. Oh, thank you. Thanks for taking my question. I know the call's gone.

Peter Benedict: So if the world were to get rocky in the back half of the year, and it became a battle for consumer attention and demand. And it's performance marketing comes in to play how we balance brand spend versus product spend and how we position different parts of our portfolio in front of the consumer, depending on what's what the appetite is. I think the other thing is how we lean into those gifting times a year.

Jim Duffy: Yes, I wanted to talk about newness can you help us understand the importance of newness, maybe with some metric is there a way to shape it or put context around it I don't know if theres a metric like contribution of products in the last 12 months or something similar.

Speaker Change: Which can be helpful. There.

Operator: Okay.

Peter Benedict: You know, at the end of the day, our product portfolio from a gifting perspective has really approachable price points and they're also highly desired and so you get that great combination between $30 or $35 drink wear or $200 or $250 or $300 cooler, but you get an incredible outsized value for that gift on the recipient side. And so all those dynamics we can play into, but we're also playing a long game, which is we want to continue to invest in this business and in this brand.

Operator: Hey, Jim its Mike and thanks for the question we.

Michael McMullen: Hey Jim, it's Mike, and thanks for the question. We generally have not given too much detail in terms of the contribution of new products or the mix of new products. You know, as we've gone, the only thing we've talked about, and we've been relatively consistent here is just the importance of newness. Not only for overall growth, but it also creates excitement for the business. It drives traffic that lifts the rest of the portfolio as well.

Speaker Change: We generally have not given too much detail in terms of the the contribution of new products or the mix of new products.

Speaker Change: You know as we've gone the only thing we've talked about and we've been relatively consistent here is just the importance of newness.

Matt Reintjes: You know, as we think about our product innovation and our product expansion, outdoor DNA is absolutely central to what we do. It's part of the reason we put the level of durability, performance, and then ultimately design into our products. And we make products that, from a durability and performance standpoint, can stand up to

Jim Duffy: You know, as far as we've gone, the only thing we've talked about, and we've been relatively consistent here, is just the importance of newness. In our view, though, it just speaks to the need to continue to drive excitement and growth and continue to put out new products to broaden the portfolio, both in Drinkware and C&E. But other than that, we haven't given a whole lot, too many specifics on the exact contribution from new products. Okay, great; I'll leave it at that. Clearly, you've done a great job with the new products. Thanks for taking my question.

Matt Reintjes: Last question, just on international, you're obviously firing away on all cylinders, but you've also kind of made some key strategic hires to lead those regions. Maybe talk a little bit further about those leaders, some of the teams they're looking to build out, and kind of because it feels like international, already strong, can kind of kick into a kind of higher gear over time. Just maybe give us some perspective on the hires and how you think they're going to go about their strategy for building out these opportunities internationally. Thanks, guys.

Matt Reintjes: And so the addition of Martin in Europe is really to kind of continue that and to continue to scale that business and build upon the strong team that we have in Europe today. But as you know well, I mean, Europe has many, many unique markets.

Matt Reintjes: And so how we address each of those markets was one of the things that attracted us to Martin. He has a lot of experience building, growing, and scaling businesses throughout Europe and is a great fit for YETI. As we go to Asia, which is really underdeveloped there, we have indicated in the past, we have a small partnership in Japan through a retailer, but bringing Naoji on board gave us the opportunity to really think differently, not only about the opportunity in Japan but, secondarily, about the opportunity throughout the rest of Asia.

Matt Reintjes: So I think you'll see the same thing that I talked about in Europe, which is we're going to start to build that team, we're going to build our great range of partners to go to market, build up our direct piece of the business, and then build the brand through awareness, partnerships, ambassadors, event activations. And so we're really excited for the multi-year opportunity that International is for YETI.

Matt Reintjes: Not only the overall growth, but it also creates excitement for the business it drives traffic that lifts the rest of the portfolio as well.

Michael McMullen: The one thing I will say is that the contribution from new products, as the business has grown from an overall percentage standpoint, hasn't materially changed over time. You know, in our view, though, it just speaks to the need to continue to drive excitement and growth and continue to put out new products to broaden the portfolio, both in Drinkware and C&E. But other than that, we haven't given a whole lot, too many specifics on the exact contribution from new products. Okay, great. I'll leave it at that. Clearly, you did a great job with the new products.

Matt Reintjes: The one thing I will say is that the contribution from new products as the business has grown from an overall percentage standpoint, it hasn't materially changed.

Peter Benedict: We want to continue to grow awareness beyond the moment in time. So I think what you would see us do is really look at balancing the momentary, more traffic, more transactionally driven activities with the support the brand over the long. That makes sense. Thanks for that, Matt.

Matt Reintjes: Over time.

Matt Reintjes: <unk>.

Matt Reintjes: And our view, though it just speaks to the need to continue to drive.

Matt Reintjes: Excitement and growth and continue to put out new products to broaden our portfolio both in drink wear and see any.

Matt Reintjes: But other than that we haven't given a whole lot of too much specifics on that.

Peter Benedict: And then I guess the next question just is around kind of the innovation, the new products are coming out. You mentioned the cookware. It sounds like the price points there. Maybe a little below where maybe that legacy product was. I can't recall exactly, but I'm more curious around the bags launch for 2025. Not sure how much of you want to share, but just how are you thinking about that bags? Like Portfolio Expansion, Portfolio Expansion in the first part of next year, whether in terms of the range of product or where the price point is going to fall relative to what you currently have out there.

Matt Reintjes: The exact contribution from new products.

Peter Benedict: Just kind of curious what else you're willing to share there. Thank you. Thanks, Peter. And as you mentioned, the cookware works, we're excited about it is it is a slightly different price point than than the legacy product as we brought that we actually move that price point down as we worked with our suppliers to not only drive some what we think are some incredible improvements to what was already the best cookware on the market or the best cast iron on the market.

Speaker Change: Okay, Great I'll leave it at that clearly you've done a great job with the new products. Thanks for taking my question.

Jim Duffy: Thanks for taking my question. You're welcome. Thank you, Jim.

Matt Reintjes: Thank you Jim Youre welcome. Thank you Jeff.

Matt Reintjes: Okay.

Mark <unk>: I'd now like to turn the call over back to Mr. Mark <unk> for final closing comments.

I'd now like to turn the call over back to Mr. Matt Reitchie for the final time.

Randal Konik: Super helpful. Thanks, guys.

Operator: I'd now like to turn the call over back to Mr. Matt Reitchie for his final closing comments.

Matt Reintjes: Thanks, Madison, for the question. I would say a couple things. Element of the Drinkware category has gotten a lot of attention. We think it's actually great. It supports both the portfolio we have today and the product portfolio going forward.

Speaker Change: Thanks, all for joining us look forward to speaking to you during our Q3 call.

Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.

Peter Benedict: But also get it to get it to a place that we thought was a really a really great kind of fit within the pricing strategy and the pricing ladder yet. The thing about bags, we haven't discussed the range and what's coming. What I would say is, you know, we're going to build into this and we believe in the opportunity in every day we believe in the opportunity and active outdoor. We believe in the opportunity and travel and an adventure.

Peter Benedict: And so I think as you as you watch us over time, what you're going to see is this melding of of Yeti plus plus the required designs and talent that we've now have within the business that we're going to continue to expand that product portfolio, which will then allow us to address a wide range of price points. But always with that idea that there is a durability and performance aspect to what we do and I think that idea that we're not going to go down market and have something that doesn't sort of represent represent Yeti.

Peter Benedict: But I think the breadth in the different use cases and environments we're going to address. We get really exciting, not just not just domestically, but globally. All right, sounds good. Good luck. Thanks very much. That's in line. We'll be coming from Joe out of Bello. Thanks. Hey guys. Good morning. Appreciate the question.

Joseph Altobello: So I guess first question for you Matt, you sounded a lot different than you did six months ago. You know, with respect to cooler demand and demand across price points. I just wanted to clarify, you did not see any meaningful tree down in the quarter in the quarter segment. And maybe to tease out what the impact of price and mix was in CNA revenue in the quarter. Yeah, Joe, thanks. Thanks for the question.

Joseph Altobello: And I'll hopefully address. I think what you're getting at. If you took sentiment today versus sentiment six months ago, it was really the difference between having. Our soft coolers fully assorted back in the market are what I knew was coming and what we indicated was coming in innovation in our hard coolers. And really the idea that we were pretty bullish on what was coming out. But I think at that time there was a lot of there's a lot more price point sensitivity, which we've seen some of that continued to play forward.

Joseph Altobello: But also we weren't fully assorted in the market. In the way in which we wanted. And so I think the trade down question, I don't know if it's trade down as much as it is we put products out in front of consumers at sizes, functionality, price points that met what their needs were. And we were excited as we said, we were excited to get back to the $200 entry price point and hard coolers.

Joseph Altobello: It's a place we had been in the past for a long time. It's been a successful price point for us. And I think it's a successful price point because it matches a size, a personal use, a carry ease that works really well in the market. And then getting building on the success we had in our wheeled coolers and bringing something that we think had a better a better form factor and fit at a different price point was a was a really attractive thing to do.

Joseph Altobello: So I think any change in the last six months is really go great about the lineup we have for great about the innovation, the forward innovation over the coming years that we have in those categories. And in that in a backdrop where we think the consumers going to be discerning and we're going to have to drive interest in and demand for for our brand. And that's that's something I think we do well.

Michael McMullen: Got it very helpful, maybe just to follow up on that, you mentioned cautious corporate spend you elaborate on a little bit and had the corporate channel to this quarter. Hey Joe, it's Mike. So as we talked about the remarks we saw growth across all of our D to C channels, corporate sales included. You know, a few things we'd call out one, this has really been to date heavily US business as we just didn't have the customization capabilities outside the US that you need to really grow and expand that business.

Michael McMullen: But we're starting to see some momentum outside the US within corporate sales. The second thing on the US side, we were pleased with the overall order volume growth that we saw in the quarter. We did see some more cautious order values, but you know we're going to continue to try to manage that to drive overall overall growth both in the US and outside the US. And we really believe that, you know, as we launch custom capabilities in Canada in Australia and eventually Europe, you know that that that corporate sales business can be a part of the overall growth story outside the United States. Got it very helpful. Thank you.

Jean Duffy: Our final question will be coming from Jean Duffy. Oh, thank you. Thanks for taking my question. I know the calls gone wrong. Hope you do a well, Matt and Mike.

Jean Duffy: I want to talk about newness. Can you help us understand the importance of newness? Maybe with some metrics? Is there a way to shape it or put context around it? I don't know if there's a metric like contribution of products in the last 12 months or something similar? Which can be helpful there?

Michael McMullen: Hey, Jim, it's Mike and thanks for the question. We generally have not given too much detail in terms of the contribution of new products or the mix of new products. You know, as we've gone the only thing we've talked about and we've been relatively consistent here is just the importance of newness not only over all growth, but it also creates excitement for the business that drives traffic that lifts the rest of the portfolio as well.

Michael McMullen: The one thing I will say is that the contribution from new products as the business has grown from an overall percentage standpoint, it has a materially changed over time. In our view though, it just speaks to the need to continue to drive excitement and growth and continue to put out new products to broaden the portfolio both in drinkware and C&E. But other than that, we haven't given a whole lot of too much specifics on the exact contribution from new products.

James Duffy: Okay, great. I'll leave it at that clearly. You've done a great job with the new products. Thanks for taking my question. Thank you, Jim. You're welcome. Thank you, Jim.

Matthew Reintjes: I'd now like to turn the code over back to Mr. Matt Wright for final closing comments. Thanks all for joining us to the court to speak with you during our Q3 call.

Unknown Executive: Ladies and gentlemen, these concludes your conference call for today.

Unknown Executive: We thank you for participating and ask that you please disconnect her line. Thank you.

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