YETI (NYSE:YETI) lowered its full-year sales growth outlook after reporting stronger third-quarter profit, citing uneven demand and a more deal-driven consumer heading into the holiday shopping season.
The maker of coolers and drinkware now expects adjusted sales growth of approximately 6% in fiscal 2026, down from its prior forecast of 7% to 8%. The company said demand moderated in early fourth quarter, particularly in the United States and Canada.
“Our cautious view of the near-term environment is appropriate right now,” Chair and CEO Matt Reintjes said on the earnings call, while adding that the company remained confident in its longer-term opportunity.
Profit Growth Outpaces Sales
Third-quarter adjusted sales rose 6% to approximately $518 million. Adjusted net income increased 35% to about $67 million, while adjusted earnings per diluted share climbed 49% to $0.91 from $0.61 a year earlier. CFO Scott Bomar said the earnings-per-share increase also benefited from a lower share count following repurchases.
Adjusted gross margin expanded 310 basis points to 59%. Lower net tariff costs accounted for approximately 200 basis points of that improvement, while pricing and lower inbound freight costs contributed to the rest, partially offset by higher commodity-related product costs. Adjusted operating margin rose to 17.4% from 13.7%.
Drinkware adjusted sales increased 8% to $284 million, while coolers and equipment rose 4% to $224 million. Reintjes said pressure from a concentrated group of drinkware products reduced the category’s growth by approximately 500 basis points in the quarter. YETI continues to expect a roughly 600-basis-point effect for the full year, with those comparisons largely resetting as it enters 2027.
Wholesale Strength Contrasts With Direct Sales
Wholesale sales rose 19% to approximately $237 million, supported by growth in the United States, Europe and Australia. Adjusted direct-to-consumer sales fell 3% to about $281 million, reflecting lower sales through YETI’s U.S. e-commerce and Amazon Marketplace businesses.
Bomar said the timing of Amazon Prime Day, which shifted from the third quarter last year to the second quarter this year, weighed on direct sales. Excluding that shift, he said, direct-to-consumer sales would have been approximately flat. YETI expects the channel to return to growth in the fourth quarter.
Reintjes said U.S. website traffic remained under pressure, though conversion improved. Corporate sales returned to strong growth, helped by improving inbound demand and larger average orders.
International sales rose 19% to approximately $119 million and represented 23% of adjusted sales, up from 21% a year earlier. Europe and Australia were key contributors, while sales declined in Canada. YETI recently opened its first brand stores in Japan and Korea and launched an initial digital marketplace presence in China.
Outlook and Cost Pressures
YETI now expects international sales growth in the mid-teens for the full year, compared with its previous forecast of high teens to 20%. Bomar attributed the revision primarily to a more cautious outlook for Canada. The company maintained its adjusted gross margin forecast of approximately 57.5% to 58% and adjusted operating margin forecast of about 14.9%.
Adjusted earnings per diluted share are expected to be $2.90 to $2.95, representing growth of approximately 16% to 18%. The outlook excludes adjustments related to 2023 product recalls. YETI increased its recall reserve in the third quarter after redemption rates exceeded its forecast, Bomar said.
The company expects consumers to remain deal-focused during the holiday season. Reintjes said YETI’s promotional approach remains consistent with past years and that higher-priced products are under the most pressure. Bomar said promotional activity was not a driver of the company’s gross margin outlook.
While YETI did not provide formal 2027 guidance, Bomar said the company expects to perform within its long-term growth framework. He noted that it would no longer face the comparison with a 53rd week in 2025 or the same pressure from trend-driven drinkware products. He also cited continuing cost pressures from materials and fuel, as well as some additional tariff pressure.
YETI’s Project Upcycle productivity program has more than 50 active projects, with early wins expected to benefit 2027, management said. Through the first nine months of 2026, the company generated approximately $72 million in free cash flow and repurchased about $150 million of shares.
About YETI (NYSE:YETI)
YETI Holdings, Inc. designs, markets and distributes premium outdoor products. Founded in 2006 by brothers Roy and Ryan Seiders, the company is headquartered in Austin, Texas. Its product lineup includes hard and soft coolers, insulated drinkware, bags, outdoor and camping equipment, and related accessories. YETI sells through its website, company-operated stores and a network of retail partners. The company serves customers in the United States and international markets, including Canada, Europe, Australia and parts of Asia.
