YETI Holdings, Inc. (NYSE: YETI) reported Q1 EPS of $0.08, $0.06 better than the analyst estimate of $0.02. Revenue for the quarter came in at $155.4 million versus the consensus estimate of $143.17 million.

Q1 2019 Highlights

Net sales increased 15% to $155.4 million compared with $135.3 million during the same period last year. Net sales growth benefited by approximately 400 basis points from shipments late in the quarter that were expected to ship in the second quarter.

• Direct-to-consumer (“DTC”) channel net sales increased 28% to $61.7 million, compared to $48.3 million in the prior year quarter, led by strong performance in the Drinkware category.
• Wholesale channel net sales increased 8% to $93.6 million, compared to $87.0 million in the same period last year, primarily driven by Coolers & Equipment.
• Drinkware net sales increased 20% to $91.0 million compared to $75.8 million in the prior year quarter, primarily driven by the continued expansion of our Drinkware product offerings, including the introduction of new colorways and strong demand for customization.
• Coolers & Equipment net sales increased 11% to $59.7 million, compared to $53.7 million in the same period last year, primarily driven by color updates across several hard and soft cooler lines, as well as the introduction of the CaminoTM Carryall bag to our wholesale channel. Net sales during the period include $1.2 million of net sales related to our Boomer 8 Dog Bowl, which was previously reported in our Other category.

Matt Reintjes, President and Chief Executive Officer, commented, “We are off to a great start in 2019 with solid growth across our product categories and distribution channels. Additionally, our ongoing focus on disciplined growth allows us to drive stronger profitability while making the investments required to expand brand and product awareness to existing and new customers. As we continue to execute our strategic plan, we are raising our full year outlook and remain excited about the tremendous opportunities ahead for the company.”

GUIDANCE:

YETI Holdings, Inc. sees FY2019 EPS of $1.02-$1.06, versus the consensus of $1.02.

• Net sales are still expected to increase between 11.5% and 13% compared to 2018, with growth across both channels and led by the DTC channel;
• Operating income as a percentage of net sales is now expected to be between 14.2% and 14.5%, reflecting margin expansion of 110 to 140 basis points, primarily driven by higher gross margin (versus the previous outlook of 13.9% and 14.4%, reflecting margin expansion of 80 to 130 basis points);
• Adjusted operating income as a percentage of net sales is now expected to be between 16.2% and 16.5%, reflecting margin expansion of 30 to 60 basis points, primarily driven by higher gross margin (versus the previous outlook of 15.9% and 16.3%, reflecting margin expansion of zero to 40 basis points);
• An effective tax rate at a more normalized level of approximately 24.5%, which remains unchanged from the previous outlook;
• Net income per diluted share is now expected to be between $0.87 and $0.90, reflecting 25% and 31% growth (versus the previous outlook of $0.84 and $0.89, reflecting 22% and 29% growth); assuming a normalized tax rate of 24.5% in 2018 (the effective tax rate for 2018 was 17%), earnings growth would be between 38% and 44% (versus the previous outlook of 34% and 42%);
• Adjusted net income per diluted share is now expected to be between $1.02 and $1.06, reflecting 13% to 17% growth (versus the previous outlook of $0.99 and $1.04, reflecting 10% to 15% growth); assuming a normalized tax rate of 24.5% in 2018 (the effective tax rate for 2018 was 17%), adjusted earnings growth would be between 21% and 26% (versus the previous outlook of 18% and 24%);
• Diluted weighted average shares outstanding of 86 million, which remains unchanged from the previous outlook;
• Adjusted EBITDA is now expected to be between $171.9 million and $176.3 million, reflecting 15% to 18% growth (versus the previous outlook of $169.0 million and $174.3 million, reflecting 13% to 17% growth);
• Capital expenditures are still expected to be between $35 million and $40 million; and
• Debt repayments of approximately $80 million and a ratio of net debt to Adjusted EBITDA of approximately 1.0 times at the end of 2019, which remains unchanged from the previous outlook, compared to 1.7 times at the end of 2018.

For earnings history and earnings-related data on YETI Holdings, Inc. (YETI) click here.