YETI Holdings, Inc (NYSE:YETI) Q1 2019 Earnings Conference Call Transcript

Nov 29, -0001 • 07:00 pm ET

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YETI Holdings, Inc (NYSE:YETI) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings. Welcome to YETI's First Quarter 2019 Earnings Conference Call. (Operator Instructions). Please note, this conference is being recorded. I will now turn the conference over to Tom Shaw, Vice President of Investor Relations. Thank you. You may begin.

Executive
Thomas D. Shaw

Good morning, everyone and thanks for joining us to discuss YETI Holdings first quarter 2019 results. Before we begin, we'd like to remind you that this conference call will include forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements.

These statements are detailed in our risk factor discussions that can be found in this morning's press release as well as our filings with the SEC, all of which can be found on our website at investors.yeti.com. We undertake no obligation to revise or update any forward-looking statements or information. During our call today, we'll also reference certain non-GAAP financial information, including adjusted items.

Reconciliations of GAAP to non-GAAP measures as well as the descriptions, limitations and rationale for using each measure can be found in the supplemental financial tables included in this morning's press release and in our filings. We use non-GAAP measures as a lead in some of our financial discussions as we believe they more accurately represent the true operational performance and underlying result of our business. Today's call will be led by Matt Reintjes, President and CEO of YETI; and Paul Carbone, CFO. Following our prepared remarks, we'll open the call for your questions.

So with that, I'll turn the call over to Matt.

Executive
Matthew J. Reintjes

Thank you, Tom, and good morning, everyone. We appreciate you taking the time to join us on our call today. As you can see from our numbers this morning, YETI is off to get a good start in fiscal 2019. First quarter revenues were up 15%, and gross margin expanded 700 basis points. We're pleased with the continued strength and balanced performance we experienced across categories and channels during the period. Our gross margin expansion demonstrates a combination of high-quality growth, brand strength and execution of our supply chain strategy.

While we continued to expand our marketing reach to drive awareness, consideration and purchase, we also meaningfully moved the bottom line forward with adjusted operating margin up 370 basis points year-over-year and 870 basis points on a two-year basis. Shifting to our product portfolio. We have sustained the momentum we generated in 2018. While I will discuss our approach to innovation in a moment, our products continued to be well reviewed by customers and recognized across both our historical media partners and increasingly broader lifestyle outlets.

For example, Outside magazine dubbed our Rambler 14-ounce mug the best mug ever made. Textbook that's WIRED Magazine named our stackable pint the best overall travel mug. Gear Patrol wrote, Who Needs Yeti's Massive New Mug? Everyone. And Conde Nast Traveler named our Rambler 26-ounce bottle as one of the best water bottles for taking on the road. Importantly, the recognition of our brand and products