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Bull of the Day: YETI Holdings (YETI)

Madeleine Johnson

YETI Holdings (YETI) designs and distributes consumer products for the outdoor and recreational markets under the popular YETI brand. The company’s product line-up are made for activities like hunting, fishing, and camping, and include premium coolers, drinkware, waterproof and everyday bags, and other outdoor gear.

Q3 Earnings Better-Than-Expected

Both YETI’s top and bottom line beat the Zacks Consensus Estimate. Net sales jumped 17% year-over-year, and adjusted EPS saw growth of 24%.

Notably, the company reported direct-to-consumer sales of $92.9 million, up 31% over the prior year quarter. This double-digit growth was thanks to strong performance in both its Drinkware and Coolers & Equipment product categories.

YETI raised its fiscal 2019 guidance, and now expects EPS between $1.12 and $1.14 per share (reflecting 23% to 26% growth).

“Third-quarter results were powered by a strong new product lineup and expanding gross margins — both powerful indicators of brand health and momentum,” said CEO Matt Reintjes.

YETI is on the Rise

YETI Holdings, Inc. Price and Consensus

 

Shares of YETI are up over 100% since January compared to the S&P 500’s return of about 25.6%. Earnings estimates have been rising too, and YETI is a Zacks Rank #1 (Strong Buy) pick right now.

For the current fiscal year, eight analysts have revised their bottom line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has moved up five cents from $1.09 to $1.14; earnings could see about 25% growth compared to the prior year period. 2020 looks pretty strong too, with earnings and revenue expected to see double-digit year-over-year growth.

YETI currently trades around 28X its forward full-year earnings estimates, above the broader Consumer Discretionary Market (18.8X).

In addition to generating growth in key product divisions, YETI has been able to successfully navigate new tariffs, changing their supply chain to regions other than China. Plus, the company is actually profitable, making it one of the few buzzy IPOs from 2018 to be so. If you’re an investor searching for a broader consumer stock to add to your portfolio, make sure to keep YETI on your shortlist.

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