YETI Holdings, Inc. (YETI)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws and should be read in conjunction with the disclosures we make concerning risks and other factors that may affect our business and operating results, including those described in more detail in Part I “Item 1A. Risk Factors” included in our Annual Report on Form 10-K for the year ended January 3, 2026. The information contained in this section should also be read in conjunction with our consolidated financial statements and related notes and the information contained elsewhere in this Report. See also “Cautionary Note Regarding Forward-Looking Statements” immediately prior to Part I, Item 1 in this Quarterly Report on Form 10-Q.

The terms “we,” “us,” “our,” “YETI,” and “the Company” as used herein, and unless otherwise stated or indicated by context, refer to YETI Holdings, Inc. and its subsidiaries.

Business Overview

Headquartered in Austin, Texas, YETI is a global designer, retailer, and distributor of innovative outdoor products. From coolers and drinkware to bags and apparel, YETI products are built to meet the unique and varying needs of diverse outdoor pursuits, whether in the remote wilderness, at the beach, or anywhere life takes you. By consistently delivering high-performing, exceptional products, we have built a strong following of brand loyalists throughout the world, ranging from serious outdoor enthusiasts to individuals who simply value products of uncompromising quality and design. We have an unwavering commitment to outdoor and recreation communities, and we are relentless in our pursuit of building superior products for people to confidently enjoy life outdoors and beyond.

We distribute our products through a balanced omni-channel platform, consisting of our wholesale and direct-to-consumer (“DTC”) channels. In our wholesale channel, we sell our products through select national and regional accounts and an assemblage of independent retail partners throughout the United States, Canada, Australia, New Zealand, the United Kingdom, Europe, and Japan, among others. We carefully evaluate and select retail partners that have an image and approach that are consistent with our premium brand and pricing. Our domestic national and regional specialty retailers include Dick’s Sporting Goods, REI, Academy Sports + Outdoors, Bass Pro Shops, Ace Hardware, Scheels, and Tractor Supply Company. In our international regions, our notable retailers include FGL Sports and SportChek in Canada, BCF and Rebel in Australia, and GO Outdoors in the United Kingdom. We sell our products in our DTC channel to customers through our websites and YETI Authorized on the Amazon Marketplace, as well as in our retail stores. Additionally, we offer customized products with licensed marks and original artwork primarily through our DTC channel, including our corporate sales channel, on our websites, and at select retail stores. Our corporate sales program offers customized products to corporate customers for a wide-range of events and activities and in certain instances may also offer products to re-sell.

Product Introductions and Updates

During the first quarter of 2026, within our Drinkware category, we expanded our bottles and mugs offerings with the launch of a new size of the Rambler Travel Bottle and the introduction of the redesigned Straw Mug 2.0 in two sizes. We continued to broaden our coffeeware and barware offerings with the launch of the Rambler Ceramic Stackable Lowball and the Rambler Ceramic Wine Tumbler. In our Coolers & Equipment category, we expanded our pursuit bags offerings with the introduction of the Skala Collection of Hiking Packs in eight sizes. Within our soft cooler bags offerings, we further expanded the Daytrip Collection with the launch of the Insulated Snack Box in two sizes and the Insulated Box. We also introduced new seasonal colorways across our Drinkware and Coolers & Equipment categories.

During the second quarter of 2026, within our Drinkware category, we introduced the new Rambler Water Bottle with Flip Chug Cap in two sizes. We also expanded our cookware and barware lineup with the launch of the Carbon Steel Skillet in two sizes and the introduction of the Rambler Beverage Tub. In our Coolers & Equipment category, we expanded our hard cooler offerings with the launch of the Roadie 8 and added the Insulated Backpack and a new size of the Insulated Tote Bag to our Daytrip Collection of soft cooler bags. Within our bags portfolio, we further expanded the Camino Collection with the launch of the Camino Zip Carryall Tote in two sizes. We also expanded our outdoor living offerings with the introduction of the Trailhead Field Chair and introduced new seasonal colorways across our Drinkware and Coolers & Equipment categories.

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Macroeconomic Conditions

Our business is exposed to and impacted by macroeconomic factors, including but not limited to uncertainty surrounding inflationary pressures, consumer confidence and purchasing behaviors, foreign currency exchange rate fluctuations, geopolitical conflicts such as the ongoing conflicts in the Middle East, and government actions and policies, including changes in interest rates and tax rates. In 2026, we have experienced inflationary pressures in certain costs, such as distribution and fulfillment, and expect such pressures to continue. The ultimate impact of macroeconomic factors on our business and results of operations for 2026 remains uncertain.

During 2025, the U.S. government implemented incremental tariffs on imports from many countries where our products are produced, including under the International Emergency Economic Powers Act (“IEEPA”). As a result, the cost to import our products into the U.S. increased, which has had a material negative impact on our gross margins and results of operations. In February 2026, the U.S. Supreme Court found unlawful the tariffs imposed under the IEEPA. Notwithstanding this decision, tariffs remain a core part of the Administration’s trade policy. If current tariff levels persist or worsen, we expect they will continue to have a negative impact on our gross margins and results of operations.

IEEPA Tariff Refunds

In April 2026, following the Supreme Court’s ruling, the U.S. Customs and Border Protection launched its Consolidated Administration and Processing of Entries portal and commenced a phased process to accept claims for potential refunds of IEEPA tariffs previously paid. We paid approximately $66.5 million in tariffs under the IEEPA. The IEEPA tariff refunds are subject to taxes and other adjustments and may cause us to incur additional costs.

During the second quarter of 2026, we concluded that recovery of tariffs under the IEEPA was probable. The total net benefit of the IEEPA tariff refund was $45.6 million for the second quarter of 2026, consisting of a $42.6 million net benefit recognized as a reduction of cost of goods sold and $2.9 million of interest income. We also recognized additional IEEPA tariff refunds of $10.0 million as a reduction of the carrying value of inventory for IEEPA tariffs previously capitalized as cost of inventory.

During the second quarter of 2026, we received cash refund payments totaling $0.7 million for IEEPA tariffs. As of July 4, 2026, our outstanding receivables included $65.8 million of IEEPA tariffs and $2.9 million of interest. Subsequent to July 4, 2026, we received cash refund payments of $16.2 million for IEEPA tariffs and $0.9 million for interest.

General

Components of Our Results of Operations

Net Sales. Net sales are comprised of wholesale channel sales to our retail partners and sales through our DTC channel. Net sales in both channels reflect the impact of product returns as well as discounts for certain sales programs or promotions.

We discuss the net sales of our products in our two primary categories: Coolers & Equipment and Drinkware. Our Coolers & Equipment category includes hard coolers, soft coolers, bags, outdoor equipment, and cargo, as well as accessories and replacement parts for these products. Our Drinkware category is primarily composed of our stainless-steel drinkware products and related accessories. In addition, our Other category is primarily comprised of ice substitutes and YETI-branded gear, such as shirts, hats, and other miscellaneous products.

Gross profit. Gross profit reflects net sales less cost of goods sold, which primarily includes the purchase cost of our products from our third-party contract manufacturers, inbound freight and duties, product quality testing and inspection costs, depreciation expense of our molds, tooling, and equipment, and the cost of customizing products. We calculate gross margin as gross profit divided by net sales. Our DTC channel generally generates higher gross margin than our wholesale channel due to differentiated pricing between these channels.

Selling, general, and administrative expenses. Selling, general, and administrative (“SG&A”) expenses consist primarily of marketing costs, employee compensation and benefits costs, including non-cash stock-based compensation, distribution and fulfillment costs, depreciation and amortization expense, and general and administrative expenses. Our distribution and fulfillment costs include costs of our third-party warehousing and logistics operations, outbound freight costs, costs of operating on third-party DTC marketplaces, and credit card processing fees. Certain distribution and fulfillment costs will vary as they are dependent on our sales volume and our channel mix. Our DTC channel variable SG&A costs are generally higher as a percentage of net sales than our wholesale channel distribution costs.

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Fiscal Year. We have a 52- or 53-week fiscal year that ends on the Saturday closest in proximity to December 31, such that each quarterly period will be 13 weeks in length, except during a 53-week year when the fourth quarter will be 14 weeks. Our fiscal year ending January 2, 2027 (“2026”) is a 52-week period. The first quarter of our fiscal year 2026 ended on April 4, 2026, the second quarter ended on July 4, 2026, and the third quarter ends on October 3, 2026. Our fiscal year ended January 3, 2026 (“2025”) was a 53-week period. Unless otherwise stated, references to particular years, quarters, months and periods refer to our fiscal years and the associated quarters, months, and periods of those fiscal years. The unaudited condensed consolidated financial results presented herein represent the three and six months ended July 4, 2026 and June 28, 2025.

Results of Operations

The discussion below should be read in conjunction with the following table and our unaudited condensed consolidated financial statements and related notes contained elsewhere in this Quarterly Report on Form 10-Q. The following table sets forth selected statement of operations data, and their corresponding percentage of net sales, for the periods indicated (dollars in thousands):

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis contains forward-looking statements within the meaning of the federal securities laws, and should be read in conjunction with the disclosures we make concerning risks and other factors that may affect our business and operating results, including those set forth in Part I, Item 1A, “Risk Factors” of this Report. The information contained in this section should also be read in conjunction with our consolidated financial statements and related notes and the information contained elsewhere in this Report. See also “Forward-Looking Statements” immediately prior to Part I, Item 1, “Business” in this Report. A discussion of our results of operations and cash flows for the year ended December 28, 2024 compared to the year ended December 30, 2023 are included in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the year ended December 28, 2024, which was filed with the SEC on February 24, 2025.

Business Overview

Headquartered in Austin, Texas, YETI is a global designer, retailer, and distributor of innovative outdoor products. From coolers and drinkware to bags and apparel, YETI products are built to meet the unique and varying needs of diverse outdoor pursuits, whether in the remote wilderness, at the beach, or anywhere life takes you. By consistently delivering high-performing, exceptional products, we have built a strong following of brand loyalists throughout the world, ranging from serious outdoor enthusiasts to individuals who simply value products of uncompromising quality and design. We have an unwavering commitment to outdoor and recreation communities, and we are relentless in our pursuit of building superior products for people to confidently enjoy life outdoors and beyond.

We distribute our products through a balanced omni-channel platform, consisting of our wholesale and direct-to-consumer (“DTC”) channels. In our wholesale channel, we sell our products through select national and regional accounts and an assemblage of independent retail partners throughout the United States, Canada, Australia, New Zealand, the United Kingdom, Europe, and Japan, among others. We carefully evaluate and select retail partners that have an image and approach that are consistent with our premium brand and pricing. Our national and regional specialty retailers in the United States include Dick’s Sporting Goods, REI, Academy Sports + Outdoors, Bass Pro Shops, Ace Hardware, Scheels, and Tractor Supply Company. In our international regions, our notable retailers include FGL Sports and SportChek in Canada, BCF and Rebel in Australia, and GO Outdoors in the United Kingdom. We sell our products in our DTC channel to customers on our websites, through YETI Authorized on the Amazon Marketplace, as well as in our retail stores. Additionally, we offer customized products with licensed marks and original artwork primarily to our DTC channel, through our corporate sales program, on our websites, and at select retail stores, as well as certain wholesale partners. Our corporate sales program offers customized products to corporate customers for a wide-range of events and activities, and in certain instances may also offer products to re-sell.

Product Introductions and Updates

During the first quarter of 2025, we expanded our bag offerings with the launch of the new Ranchero backpack in two sizes and introduced new seasonal colorways across our Drinkware and Coolers & Equipment categories.

During the second quarter of 2025, we expanded our bottles and jugs offerings with the launch of the new Rambler Travel Bottle in two sizes and introduced the redesigned and improved Rambler Jug in two sizes. We continued the expansion of our tableware offerings with the launch of the new Rambler Insulated Bowls in six sizes and expanded our cookware offerings with the launch of a new size of the Cast Iron Skillet. In our Coolers & Equipment category, we expanded our hard cooler offerings with the redesigned Roadie 24, and expanded our outdoor living offerings with the launch of the new Hondo Beach Chair and a limited release of the Can Crusher. We continued the expansion of our bag offerings with the launch of the new Cayo backpack in two sizes and two new sizes of the Ranchero backpack. In our soft cooler bags offerings, we expanded the Daytrip Collection with the launch of the launch of the new Daytrip Lunchboxes in two sizes, the Daytrip Lunch Bag, and the Daytrip Tote Bag. We also introduced new seasonal colorways across our Drinkware and Coolers & Equipment categories.

During the third quarter of 2025, we expanded our coffeeware offerings with the launch of the Rambler Ceramic Mug Collection in two sizes, and introduced a new size of the Rambler Travel Bottle within our bottles offerings. We continued the expansion of our container offerings with the launch of the new Rambler Food Jars in two sizes. In our Coolers & Equipment category, we expanded our bags offerings with the introduction of a new size of the Cayo backpack. We also introduced new seasonal colorways across our Drinkware and Coolers & Equipment categories.

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During the fourth quarter of 2025, we expanded our bottles and jugs offerings with the launch of the Yonder Shaker Bottle in two sizes, the Silo Jug with Straw Cap in two sizes, and the Silo Jug with Chug Cap. We continued expansion of our mugs and tumbler offerings with the launch of the Rambler Travel Straw Mug in three sizes, the Rambler Junior Tumbler with Silicone Straw, and we introduced a new size of the Rambler Ceramic Stackable Cup within our coffeeware offerings. We also introduced a new size of the Rambler Food Jar within our containers offerings. We continued the expansion of our cookware offerings with the launch of the new Cast Iron Ranch Pan and a limited release of the new Carbon Steel Pan. In our Coolers & Equipment category, we expanded our outdoor living and cargo offerings with the introduction of the YETI Fire Pit and a smaller format LoadOut GoBox.

Acquisition

During the third quarter of 2025, we acquired certain assets, including designs, tooling, and intellectual property, related to the Helimix branded shaker bottle for $38.0 million in cash (“Helimix Acquisition”). During the fourth quarter of 2025, we showcased our speed-to-market with the launch of our Yonder Shaker Bottle, further advancing YETI’s expansion into the sport, health and wellness categories. This product launch was made possible, in part, by the Helimix Acquisition.

Macroeconomic Conditions

Our business is exposed to and impacted by macroeconomic factors, including but not limited to uncertainty surrounding inflationary pressures, consumer confidence and purchasing behaviors, foreign currency exchange rate fluctuations, geopolitical conflicts, and government actions and policies, including changes in interest rates, tax rates, and tariff rates. We experienced a challenging macroeconomic and consumer spending environment in 2025 that adversely impacted our results of operations. The impact of such conditions on us for 2026 remains uncertain.

During 2025, the U.S. government implemented incremental tariffs on imports from many countries. Most of our products are produced in countries that were subject to these tariffs. As a result, the cost to import our products into the United States increased. During 2025, we pursued a number of strategic options to mitigate the impact of tariffs. For example, in response to the elevated tariffs on imports from China announced in early 2025, we accelerated the diversification of our Drinkware manufacturing to additional countries beyond China. As a result, a majority of our Drinkware manufacturing capacity is now outside of China. However, these accelerated diversification efforts caused short-term supply chain disruptions in 2025, which impacted our ability to source certain products. These disruptions caused inventory constraints that adversely impacted sales in 2025.

On February 20, 2026, the U.S. Supreme Court invalidated tariffs imposed under the International Emergency Economic Power Act (the “IEEPA Decision”). There remains significant uncertainty regarding the implementation of the IEEPA Decision, including the processes that will govern refund claims, the timing of any potential refunds, and the ultimate amounts, if any, that we may recover. In addition, immediately following the IEEPA Decision, the U.S. government initiated new tariffs under alternative authorities, resulting in continued tariff exposure for many of our products. There remains significant uncertainty regarding the duration and scope of these newly initiated tariffs, whether the U.S. government will pursue additional trade actions or impose further tariffs, and the impact of such conditions on our business. Similar to our strategy in 2025, we will strive to mitigate the impact of tariffs by managing operating expenses, working capital and cash; negotiating with suppliers; evaluating pricing strategies; leveraging tariff exemptions where possible; and pursuing other supply chain optimization activities. However, the ultimate impact of tariffs on our business and results of operations in 2026 remains uncertain.

General

Components of Our Results of Operations

Net Sales. Net sales are comprised of wholesale channel sales to our retail partners and sales through our DTC channel. Net sales in both channels reflect the impact of product returns as well as discounts for certain sales programs or promotions.

We discuss the net sales of our products in our two primary categories: Coolers & Equipment and Drinkware. Our Coolers & Equipment category includes hard coolers, soft coolers, bags, outdoor equipment, and cargo, as well as accessories and replacement parts for these products. Our Drinkware category is primarily composed of our stainless-steel drinkware products and related accessories. In addition, our Other category is primarily comprised of ice substitutes and YETI-branded gear, such as shirts, hats, and other miscellaneous products.

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Gross profit. Gross profit reflects net sales less cost of goods sold, which primarily includes the purchase cost of our products from our third-party contract manufacturers, inbound freight and duties, product receiving testing and inspection costs, depreciation expense of our molds, tooling, and equipment, and the cost of customizing products. We calculate gross margin as gross profit divided by net sales. Our DTC channel generally generates higher gross margin than our wholesale channel due to differentiated pricing between these channels.

Selling, general, and administrative expenses. Selling, general, and administrative (“SG&A”) expenses consist primarily of marketing costs, employee compensation and benefits costs, including non-cash stock-based compensation, distribution and fulfillment costs, depreciation and amortization expense, and general corporate infrastructure expenses. Our distribution and fulfillment costs include costs of our third-party warehousing and logistics operations, outbound freight costs, costs of operating on third-party DTC marketplaces, and credit card processing fees. Certain distribution and fulfillment costs will vary as they are dependent on our sales volume and our channel mix. Our DTC channel variable SG&A costs are generally higher as a percentage of net sales than our wholesale channel distribution costs.

Fiscal Year. We have a 52- or 53-week fiscal year that ends on the Saturday closest in proximity to December 31, such that each quarterly period will be 13 weeks in length, except during a 53-week year when the fourth quarter will be 14 weeks. Our fiscal year 2025 ended on January 3, 2026 and was 53 weeks. Our fiscal years 2024 and 2023 ended on December 2

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