YETI (NYSE:YETI) Soars 11.58% As it Exceeds Q1 Expectations

YETI (NYSE: YETI ) reported better-than-expected Q1 CY2024 results, with revenue up 12.7% YoY to $341.4 million. The company made a non-GAAP profit of $0.34 per share, improving from its $0.18 per share in the same quarter last year. YETI's Q1 CY2024 highlights included a balanced, double-digit growth across both wholesale and direct-to-consumer channels, as well as Drinkware and Coolers & Equipment categories. The international sales mix reached a record 19%, and domestic growth re-accelerated. Profitability continued to show strength with both adjusted gross margin and adjusted operating margin expanding nearly 450 basis points during the period.

YETI specializes in durable outdoor goods, including coolers, drinkware, and other gear tailored to adventure enthusiasts. Its long-term performance can give signals about business quality, but its recent history shows the business has slowed as its annualized revenue growth of 7.9% over the last two years is below its five-year trend. This quarter, YETI reported robust year-on-year revenue growth of 12.7%, and its $341.4 million of revenue exceeded Wall Street's estimates by 2.4%. Looking ahead, Wall Street expects sales to grow 8% over the next 12 months, a deceleration from this quarter.

YETI's free cash flow margin has averaged 8.4% over the last two years, subpar for a consumer discretionary business. In Q1, YETI burned through $114.3 million of cash, equivalent to a negative 33.5% margin, reducing its cash burn by 101% YoY. Analysts predict that YETI's cash profitability will fall over the next year, with their consensus estimates implying its LTM free cash flow margin of 10.5% will decrease to 7.9%.

Technical Outlook
YETI stock is up 11% on Thursday's Market trading forming an Upside-gap due to the earnings result with a Relative Strength Index (RSI) of 60 which is slightly overbought.