Yeti, the American brand of coolers and drinkware and other outdoor equipment, recorded a 29 percent gain in revenues to $294.6 million, driven by strong growth in direct-to-consumer (DTC) sales, which increased by 62 percent to $150.4 million. This was led by both Coolers & Equipment and Drinkware, as the ongoing Covid-19 crisis created strong demand for outdoor recreation and leisure lifestyle products, as well as an increasing shift to online shopping, with strong traffic and conversion. Net income rocketed by 142 percent to $51.4 million.
Wholesale revenues increased by 6 percent from the year-ago quarter to $144.2 million – with sales driven by the Drinkware segment, as retailers sold through in-store inventory and ended the quarter with stocks down by double digits.
Drinkware revenues rose by 31 percent to $165.9 million, boosted by new colorways and sizes and strong customization demand. Meanwhile, Coolers & Equipment revenues surged by 27 percent to $124.2 million, thanks to strong sales of hard coolers, soft coolers, outdoor living products, cargo, and bags.
International sales climbed to their highest share of turnover so far, accounting for 7 percent of revenues, with wholesale more than doubling, while DTC e-commerce quadrupled. Performance was led by Canada, as stores there reopened, and Australia.
Overall, the gross margin jumped by 6.7 percentage points to 59.1 percent, lifted by a favorable shift in channel mix due to the increase in DTC sales, but also by product cost improvements, decreased tariffs, and lower inbound freight.
Adjusted Ebitda increased by 48 percent to $162.0 million.
The company anticipates constrained supplies for the Holiday season, as inventory in the third quarter decreased by 36 percent to $134.6 million, since Yeti reduced purchase orders to align with demand forecasts earlier in the year in the midst of the first wave of the pandemic.
In the fourth quarter, net sales are expected to grow between 15 and 16 percent, including an estimated $7 million of revenue benefit from the 53rd week. Yeti is working to support the omni-channel capabilities of wholesale partners, as demand is expected to exceed supply in the next three months due to the current inventory situation.