Here's Why Investors Should Retain YETI Holdings Stock Now

Zacks Equity Research
4 min read

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YETI Holdings, Inc. YETI is likely to benefit from product innovation, expansion efforts and strategic partnerships. A focus on supply-chain diversification bodes well. However, the macroeconomic environment poses concerns.

Factors Driving the YETI Stock

Innovation Driving Growth: YETI’s continuous focus on innovation has been a catalyst for its success. In the second quarter, the company introduced new cooler products, including the Roadie 15, which has seen strong early demand. YETI's innovative approach extends to its Drinkware portfolio, with the launch of new products like stackable tumblers, straw mugs and even cookware. The company’s expansion into culinary products, such as cast-iron skillets, is expected to open new avenues for growth in the second half of the year and beyond.

Strong International Expansion: YETI's international growth continues to be a key driver of its overall performance. In the second quarter, international revenues surged by 34%, accounting for 17% of the company’s total business, up from 13% last year. The company's expansion into Europe and Asia is poised to boost its global footprint, with plans to enter new markets in 2025. As YETI continues to build its ambassador network and partnerships, this global diversification provides a strong foundation for sustained growth, including its recent licensing deal with the NFL.

Supply-Chain Diversification: YETI’s ability to manage supply chain challenges has resulted in significant gross margin expansion. The company is on track to deliver record-high gross margins for the full year, thanks to strategic investments and optimization efforts. Moreover, YETI's ongoing efforts to diversify its supply chain have reduced its reliance on China. The company aims to produce half of its Drinkware outside China by 2025. This diversification mitigates geopolitical risks and positions YETI to manage future tariff scenarios more effectively.

Strategic Community and Brand Building: YETI continues to build its brand through strategic partnerships and community-focused initiatives. The company’s partnerships with the U.S. Equestrian and Caddie Network have expanded its reach across diverse markets, including golf and equestrian communities. The company’s presence in global sporting events, such as the Summer Olympics, further solidifies its brand relevance and reach. Its direct-to-consumer channels, retail expansion and strong wholesale partnerships provide a balanced approach to market penetration, ensuring continued demand across categories.

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